This is already the case. You can only depreciate the building value not the land portion. So single family homes have much lower depreciation since most of the value is typically in the land vs an apartment which is the opposite.
> Since for most properties the majority of the value is in the land itself
I'm not sure that's the case for the majority of the country. At-least it's not here in my greater metro area (suburbs or rural... yuppie downtown areas... perhaps, but again, downtown is not majority for most places)
It may be not true right now amid difficulty in finding labour and materials. Much like cars, the value of a used home is proportional to the cost of building a new home. When new homes are difficult to acquire, cost of used homes go up. Used cars have also increased in value lately for the same reason. This is not typical, however. These are normally depreciating assets.
Under usual market conditions, houses are headed to being on the older side and reaching the end of their effective lifetime, leaving little value left in the structure. You can renovate a home to bring it back to new-like condition, which restores value to the structure, but that cost must be maintained in the equation.
I'd think anywhere where apartments are viable to build it would be true, and of course large rural properties. Whether they make up "most properties" I'm not sure - it would surprise me if much less than half of properties in Australia were sitting on land worth more than the house itself (despite the enormous amount of undeveloped/low-value land we have!).
The land beneath a building does not deprecate, whereas the value of the building should.
Since for most properties the majority of the value is in the land itself, your basis to deprecate would be much lower, and more realistic.