Australia's land values have surged to record highs, The Guardian's Grogonomics column reports, leaving young people with diminishing hope of ever buying a home.

The latest data from the Australian Bureau of Statistics shows that residential land values have increased 18% nationally over the past year, with some capital cities seeing even steeper rises. In Sydney, land values are up 23%; in Melbourne, 19%.

This isn't just about house prices going up. It's about the fundamental component of housing - the land itself - becoming so expensive that homeownership is shifting from difficult to impossible for an entire generation.

Economist Greg Jericho breaks down the numbers: the median land value in Sydney is now $820,000. That's just the land, before you even build anything on it. For a young couple earning median wages, saving a 20% deposit on that land alone would take about 15 years - assuming they could save 20% of their after-tax income and land values didn't keep rising.

Of course, land values do keep rising. That's the entire problem.

The drivers are familiar: restrictive zoning laws, negative gearing, capital gains tax concessions, and chronic undersupply of housing. State governments have been reluctant to release land for development, particularly in well-located areas close to employment and transport. That artificial scarcity drives up prices.

Meanwhile, tax policy actively encourages property speculation. Negative gearing allows investors to offset rental losses against other income, making property investment attractive even when it's not immediately profitable. The 50% capital gains tax discount means that profits from selling investment properties are taxed at half the rate of wages.

The result is a market where investors have structural advantages over first-home buyers. When an investor can claim tax benefits that a young couple can't, the investor wins the bidding war. It's not a level playing field; it's a rigged game.

Prime Minister has promised to build more homes, with a target of 1.2 million new dwellings over five years. But . You end up building expensive homes on expensive land, which first-home buyers still can't afford.