RPM’s latest Greenfield Market Report showed Geelong was the worst-performing of Melbourne growth corridors, with sales dipping to just 134 lots in the June quarter, and 147 released to market.
The figures come as the median square metre rate approaches $1,100 for Armstrong Creek, Geelong and the Bellarine – higher than most of Melbourne’s greenfield corridors.
The region’s median lot price fell 2 per cent to $286,950 in the June quarter, with the lot size shrinking by 14.3 per cent to 355sqm.
RPM national managing director project marketing Luke Kelly said Geelong was feeling the impact of its land prices, which were higher per square metre than outer Melbourne.
“The 7 per cent increase in sales in the March quarter appears to be a blip with the June quarter continuing the downward trend for Geelong.”
“The fact is, many buyers have been priced out of the Geelong market, hence, why we’ve seen sales fall at a steep rate.”
“People have traditionally been compelled to move from metropolitan Melbourne to Geelong because of the value for money offered and larger lot sizes.”
“This is no longer the case and we can see that in the reduced activity.”
Mr Kelly said smaller lots had helped keep prices in reach for some buyers, but that further encouragement might be needed to bring buyers back into Geelong markets.
“We did see the median lot size shrink significantly at the same time, which has helped to keep the median price within a stable range.”
“This is good news for investors who remained a healthy 41 per cent of buyers with owner occupiers making up the remaining 59 per cent.”
“We think we’ll see more incentives come back into the market with developers out to do deals, which should help bridge the affordability gap and bring more buyers back into the market.”
Meanwhile, RPM’s figures found a recent interest rate rise cycle had unsurprisingly impacted land sales, which were 53 per cent down year-on-year.
Neighbouring markets did improve int he latest quarter, however, with the Melbourne and Geelong growth corridor overall having its first quarterly growth since September 2021.
This article references findings from our Q2 2023 Greenfield Market Report. For the full report, click here.