Expect higher council rates as land values soar to almost $3 trillion

Property owners can expect to pay more for land tax and council rates, with land values across NSW surging to just shy of $3 trillion this year, despite an overall “cooling” of the market. See the full list of rises in each area.

Property owners can expect to pay more for land tax and council rates with land values across the state surging to just shy of $3 trillion this year despite an overall “cooling” of the market.

The increase – a staggering trillion more than five years ago – has been driven in part by an insatiable demand for land and limited supply in parts of Greater Sydney, according to the latest 2024 NSW Valuer General report.

While some bush towns surged in value by almost 30 per cent as priced-out locals and “tree-changers” abandoned the city, uncertainty in the coal mining sector and the cancellation of a business activation project saw values plunge in others.

Natural disasters, such as successive floods in the Hawkesbury, also subdued growth in the region.

NSW Valuer General Sally Dale said the valuations show Greater Sydney had continued to experience growth in residential land values despite the “general cooling trend” of the market.

“NSW’s combined land value has reached a record $2.98 trillion in value backed by continued demand, underpinned by increased property sale prices and driven mostly by the state’s residential markets – a testament to the resilience of the property sector in NSW despite difficult financial lending markets,” she said.

Land values in Waverley – encompassing the hot real estate spot of Bondi Beach – rose by 16.5 per cent. Picture: realestate.com.au

“The population continues to look for more affordable and available housing across western NSW due to the challenges of the metropolitan housing markets.

“ It’ll be interesting to see if this trend continues over the longer term and whether the ‘tree change’ remains a trend in the future.”

The report, obtained exclusively by The Sunday Telegraph, analysed the value of every parcel of land across NSW, including residential, rural, industrial, commercial as well as parks, forestries and mines.

The values only take into account the actual parcel of land, and do not include houses and other buildings, with property sales the most important factor considered.

The report said land values in Greater Sydney had risen by 8.5 per cent to almost $2 trillion in the year, with Woollahra and Waverley – the latter encompassing the hot real estate spot of Bondi Beach – rising by 20 per cent and 16.5 per cent respectively.

Ongoing demand versus “supply constraints” had driven the increases in the eastern suburbs, it said.

In Western Sydney, the hottest spot was Strathfield with land values soaring by 17.1 per cent as a result of its central location to the Sydney and Parramatta CBD’s transport and major retail centres.

Other hot pockets in Western Sydney included Fairfield, where land values rose 15.3 per cent, and Blacktown, which recorded a 15.1 per cent rise.

Blue Mountains, Hawkesbury and Canada Bay saw the least growth in residential values.

While there had been strong growth in some areas, overall market activity in the residential sector had been subdued due to rising interest rates, higher inflation and increased construction costs “which have impacted development feasibility”, Ms Dale said.

In regional NSW, a strong economy and a “thriving local minerals and critical minerals mining sector” put Cobar on top of the list in the bush, with residential land values rising 45.4 per cent.

The construction of the Western Sydney Airport and the Western Sydney Airport Metro Line increased industrial land values in Camden – which rose 20 per cent – and Penrith – where land increased 15.3 per cent.

The biggest surge in industrial land values were in strong regional economies in the bush such as Warrumbungle, where values soared by 92.4 per cent, followed by Gilgandra (37.6 per cent), Balranald (35.9 per cent) and Bogan (29.3 per cent)

However, industrial land values in Narrabri plunged with the completion of the Inland Rail construction stage and the announcement that the Narrabri Special Activation Precinct would not proceed.

Uncertainty in the coal-related mining sector was blamed for a 4.5 per cent decrease in land values in Singleton.

Lands and Property Minister Steve Kamper. Picture: Newswire/Gaye Gerard

Across NSW, the total combined land value rose 6.4 per cent to $2.98 trillion.

The new land values will be used by Revenue NSW to calculate land tax for the 2025 land tax year for landowners subject to land tax.

Registered land tax clients will receive their land tax assessment from January next year.

Land values are provided to local councils at least every three years for calculating council rates.

Landholders have 60 days from receiving their notice to object to their land valuation if they believe it is incorrect and can provide sales evidence to support their claim.

Lands and Property Minister Steve Kamper described the rising land values as “encouraging”

“Despite high interest rates and tough borrowing conditions, the property market has remained resilient,” he said.

“These numbers should provide the sector with confidence in the stability of the NSW property market going forward.”

INHERITING ONLY WAY INTO PROPERTY – BUT LAND TAX HITS HARD

Bondi Junction homeowner Esther Labi, 58, inherited her property from her Italian-Jewish parents who built a life for themselves in the eastern suburbs after immigrating to Australia as refugees in the 1950s.

“I’m fortunate to have inherited this house because it’s worth millions of dollars now and there’s no way I would be able to afford it otherwise,” Ms Labi said.

“I was looking to invest in a small investment property and I can tell you even that (goal) is moving further and further away.

“I have to think about my retirement soon and what I want to do, and it’s not going to be in property … you’ve got to rethink all of it (retirement plans) because property is very unaffordable.

Bondi Junction home owner Esther Labi. Picture: Sam Ruttyn

“It used to be that property was superannuation. For my parents it was, but not any more.

“It just seems all very very unaffordable and I’m glad I’ve got this place to live in because I don’t know how I would have lived in Bondi.

“My parents owned property and so that’s what we were always brought up with, the idea that you must invest in brick and mortar.

“Just save, work hard, and invest in property, that’s what people did a generation ago. I don’t know if it’s going to be like that for the next generation.”

Ms Labi also inherited an investment property in Bellevue Hill, which is hit hard by land tax.

“Paying land tax is so high on the investment property (it’s almost not worth it), and the land tax has gone up every year since then too.

“The first couple of years that I had the investment, the rent was quite low because I inherited it during Covid, so it was hardly worth keeping because it was such a bad return on investment.”

Ms Labi, who runs Woollahra retail store Storm in a D Cup, said council rates had put an additional pressure on businesses at a time when people were increasingly shopping online and abandoning physical outlets.

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