Land prices in Adelaide top Sydney

Some residential land in Adelaide has become dearer than that in Sydney, figures released by the Housing Industry Association (HIA) show.

As a result, land sales in the South Australian capital have slipped 37 per cent over the past 12 months.

With a median-sized housing block priced at $487 a square metre, Adelaide was now more costly than Sydney at $480 a square metre, but still behind Perth at $532.

HIA South Australian executive director Robert Harding said the price of land in Adelaide was a reflection of limited supply in recent years, which was a direct result of state government policies.

"That pushed up the price of land and, as we know, the price of land is a bit like the price of beer, it never comes down," Mr Harding said.

"So that bubble of price rises is still flowing through the system.

"Although we've now got more land on the market than what we had in the past, we're still suffering to some extent from that price bubble."

Mr Harding said the HIA expected house prices in Adelaide to level off, hopefully leading to an increase in construction activity.

"The problem at the moment is we're having a real struggle getting any contracts at all," he said.

"If activity were to remain like that, the industry would be in real strife.

"But what we've seen over the past 12 months is a levelling off in the price (of land).

"I would expect that levelling off to continue for a while now."

The latest figures showed the median price for a block in Adelaide falling 3.7 per cent in the March quarter to $180,000.

The figures also showed SA had Australia's three cheapest regional markets for residential land - in the north, the Murraylands and the southeast of the state.

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