Land values have soared across the South Coast, with prices in the Kiama LGA rising by over 50 per cent.
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The figures are from the latest annual land value report from the NSW Valuer General and reflect the value of land as at 1 July 2021.
Total land value for the South Coast of NSW increased by 30 per cent in the year to 1 July 2021 to $154.3 billion.
Residential values saw the strongest growth with a 30.3 per cent rise overall.
Land values in Kiama rose by 53.5 per cent, followed by the Shoalhaven at 49.2 per cent. Land values in Wollongong increased by 24.5 per cent and Shellharbour by 20.2 per cent.
This puts the average residential block of land, not including the value of any structure, at $652,888 in Wollongong, $490,156 in Shellharbour and a whopping $956,090 in Kiama.
According to the Valuer General, the price rises in residential land were driven by people relocating from Melbourne, Canberra and Sydney for lifestyle changes. This was also true for rural land, which attracted high demand to limited supply with properties being tightly held.
Kiama councillor Kathy Rice said that with prices as high as they are now, there is little incentive for those who wish to remain in the area to sell, leading to less houses on the market.
"People feel a bit trapped. They feel like they could sell their house for a lot more than they bought it for but they can't buy back in so people are not necessarily inclined to sell."
Kiama was only eclipsed by Byron Bay in all of NSW for residential land value rises and Ms Rice acknowledged that supply was limited in Kiama but that land could be released for housing development.
"We already have Kiama Council owned land available in Spring Creek, behind the Kiama cemetery, which is prevented from being developed by the covenants on that land until the Bombo quarry ceases operation."
Ms Rice also pointed to land releases in Gerringong and Gainsborough where construction is yet to begin. However, even when the houses are complete it is unlikely the houses will be affordable, highlighted Michele Adair of the Housing Trust.
"In the last 10 years, we have never had more supply of housing and the housing market has never been more expensive. For example in Shellharbour, West Dapto, enormous land releases and not one of those blocks of land is affordable."
The unaffordability of housing in the Illawarra has had a significant impact on local communities, with families of dual income earners in rental stress, let alone those on lower incomes.
"The number of people that are going to be homeless, and that includes whole families, people who are in full time work, is extraordinary," said Ms Adair.
"There are no homes."
To address this, Ms Rice called on developers and private landholders to work with council to set aside a greater portion of new developments for affordable housing.
For Ms Adair, the need has never been clearer for governments at all levels to subsidise housing.
"Otherwise, the community housing sector simply cannot afford to provide stock."
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