Rising land costs have overtaken financing to become the biggest concern for smaller developers doing projects up to $15 million in value, threatening the viability of infill housing that is crucial for cities such as Sydney and Melbourne to meet their new home targets, an industry survey shows.

The survey of 216 small and medium-sized developers – mainly of townhouses and duplexes, land subdivisions and single-home builds – showed 62.5 per cent of respondents cited land costs in their top three hurdles, nearly double the 33.7 per cent of the last survey two years ago.

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