24410 – APN Residual Land Value (RLV) Gap™

The APN Residual Land Value (RLV) Gap™ (24410) reads how much value is left over once the cost of construction is subtracted from what a completed dwelling could sell for, expressed as a share of the land’s own value. It is a component of the APN Future Development Pipeline Index™ (24400), reading the feasibility side of whether new housing development is worth undertaking, not the pace at which prices or costs are separately moving.

It is a related but distinct measure from APN Replacement Cost Gap™ (24450), which reads the pace of change in dwelling prices against construction costs rather than a feasibility ratio against land value; the two move together only loosely (correlation of 0.35 over this node’s history).

Primary metric: Residual Land Value Feasibility Ratio, Z-Score

The ratio itself — residual value as a share of land value — reads 0.7061 at Q2 2026, standardised against this node’s own history to give the published Z-score. The ratio sits below 1 throughout the node’s history by construction; there is no threshold level built into the reading, only its movement against its own norm.

A houses-only companion figure is published alongside, not blended into this reading: 0.7385, Z −0.8855, 25.4 against the same 60 quarters.

Position: 0.0, the lowest of 60 quarters of this node’s own history — a floor reading. Because the current quarter cannot rank any lower, the Z-score itself is the more informative figure than the percentile.

All three legs are drawn from Australian Bureau of Statistics releases, standardised against APN’s 2011–2025 baseline window.

The land-value leg reconciles closely to the Australian System of National Accounts household balance sheet: dwelling values match exactly at each June reconciliation point from 2018 to 2025, and the residential share of household land sits consistently between 92 and 93.5 per cent.

At −2.3978σ, the current quarter is the tightest reading in this node’s 60-quarter full-coverage history: the value left over after construction costs, measured against land value, has never been lower on this measure. Two disclosures matter to reading this correctly. First, this ratio compares the price of the existing dwelling stock against the cost of building new dwellings — a stock-versus-flow comparison, not a like-for-like one. Second, construction cost per new dwelling moves with the mix of what’s being approved as well as with unit costs: at Q2 2026, houses were 61.3% of new units approved against this node’s own average of 58.6%, a mix tilted toward the cheaper dwelling type, so the quarter’s fall reflects rising cost per non-house unit over the rolling year, not a shift toward a more expensive mix.

The measure also shares a data channel with two other components of this branch: it correlates at 0.72 with an input used in APN Supply Chain Strain Index™ (24430), and at 0.35 with APN Replacement Cost Gap™ (24450) — related without being duplicative.

Node 24410 holds Active status. The certified Z-score is −2.3978σ (Q2 2026, N=60), the lowest in the node's full-coverage history to date.

The other components of the APN Future Development Pipeline Index™ (24400).