What caused the increase in property prices for the past years? property demand, increase in construction expenses, low interest rates are often pinned as the reason. The median price of land is often overlooked, but it does play a huge factor in the increase.
Cameron Kusher of RP data shows the correlation between property prices and home values as well as other factors affecting the property sector. He outlines that vacant land prices have increased from $63,000 in June 1997 to a staggering $232,000 in June of this year.
As an effect of this price increase, developers have reduced their vacant lot releases, from 690 square meters in 1997, to just 468 square meters this year.
With the data gathered from RP data, it strongly suggests that, apart from construction expenses and other factors, median selling prices of vacant lots play a huge role in property prices.
You can read more on the Property Update website.