NSW Residential Land Values Decline

We Australians love real estate. We talk about it at dinner parties and BBQ's and at the pub.

In this context, I was interested to see in the Sydney Morning Herald that a steep drop in property prices in western Sydney has led to the first statewide fall in average NSW residential land values in at least a decade.

According to the NSW Valuer-General, Philip Western, residential land values across NSW have dropped by an average of 0.06 per cent. This drop occurred despite continued growth in residential land value in Regional NSW and in some parts of Sydney such as the eastern suburbs.

Mr Western said the figures were based on valuations of 2.4 million rate paying properties.

While average residential land values had declined, average prices for all land - including commercial, industrial and rural properties - had risen 1.7 per cent. Commercial, industrial and rural properties increased by 8 per cent, 10 per cent and 6 per cent, respectively, offsetting the fall in residential land.

I found the figures interesting.

To begin with, it illustrates the point - one that I have made before - that investment in regional real estate can offer better returns than the metro alternative.

It also illustrates a second point that I make, that Australia is not a single entity but instead is made up of a whole series of regions and localities displaying very different patterns. Here the Valuer-General's figures indicate some of the differences in patterns for NSW, but also conceal others in that the figures are still averages.

The only way to find the real position is through direct investigation of specific regions and the localities within those regions.