Why would you say the former? Are you basing this opinion on factual data?
I guess it depends how you intend on measuring "rarity". Also why would you discount regional areas and what defines the boundaries of a capital city? It's not really a practical exercise, however... we have approximately 10% empty homes in Australia, a dropping number of people per household with an increasing number of bedrooms. We have plenty of homes for everyone...
How much investment/physical Gold is there in Australia?
The RBA has 80 tonnes of Gold. 1 metric tonne = 32,150.746 Troy ounces. So that's around 2.57 million ounces that the RBA has it could hand out (not that it would) or around 1 in every 8 people that can have a single ounce of Gold from their reserves...where else can we find some Gold?
Well we have the GOLD etf on the ASX, that represents investment bullion in Australia, I decided to check how much they have.... http://www.goldbullion.com.au/au/holdings/gb_holdings.php
Only 457,000 ounces. That does not get us much further towards a target of 1 ounce for every Australian! Further to this I don't believe this Gold is kept in Australia.
Of course we would have a lot of Gold stored by private investors, but there would be no way to accurately measure this amount.
So back to your question, which was: "what is rarer - land in australian capital cities or gold?"
Well I can't accurately answer this as the question is not defined far enough, but I would say on the basis of "Can we house everyone in Australia" vs "Can we give everyone in Australia an ounce of Gold", that being able to house everyone is much more likely and on this basis I will claim that Gold is the rarer of these two assets.
