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The recent property recovery has widened the gap between prices for land in capital cities and the regions, according to RP Data.
Capital city land values grew by six per cent during 2013/2014, while regional land increased by just 0.6 per cent.
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Since 1989/1990, capital city land values have climbed by 420 per cent and regional values by 394 per cent.
However, these markets began to diverge after the global economy faltered around 2008, according to RP Data national research director Tim Lawless.
“After the financial crisis there has been very little change in regional land prices while capital city prices have continued to rise,” he said.
In the same period, median lot sizes in the city have shrunk in comparison to the country – in 1990, median lot sizes in the regions were 36 per cent larger than in the cities, while today the difference is 69 per cent.
Mr Lawless said these trends were likely to continue as vacant land became scarcer within city markets and units became more common.
“The combination of smaller land lot sizes and rising prices is likely to continue,” Mr Lawless said.
“Coupled with this, we are also seeing a record-high level of dwelling approvals for units.”
[Related: Buy real estate in big cities not regions, says John Symond]
