Bendigo greenfield land sales fell more than forty per cent during the second quarter on 2023 continuing a significant market contraction that began last year, a new report by RPM Research, Data, & Insights shows.
However, RPM’s latest Greenfield Market Report found despite the subdued sales numbers, the June quarter continued a run of price growth, with the median lot sale price up by 3.2 per cent to $275,500 – a new record price and 8.5 per cent higher than the same quarter last year.
Overall sales for the three months to 30 June were just 29 compared to 49 for the first quarter, with the median lot size shrinking to 488 square metres, which helped to lift the median price per square metre by 7.9 per cent to $534.
New supply increased again to 205 lots by the end of the quarter, which was a level not seen since the first quarter of 2020.
The result was out of step with overall sales across the Melbourne and Geelong growth corridors, which grew by 13 per cent to 2146 lots sold in the June quarter – the first increase since the September 2021 quarter.
RPM national managing director project marketing Luke Kelly said the strong median lot price would likely contribute to restrained sales activity through the second half of the year. However, the addition of new supply would also likely offset higher prices, with further incentives anticipated in the market.
“We know the Bendigo market has not seen the same degree of discounts, incentives and rebates as other markets meaning there is scope for developers to introduce those in the second half which can help drive sales activity as well as engage buyers,” Mr Kelly said.
“We can see that while the north has traditionally driven sales activity there has been a diversification of stock to other regions including the west, which offers larger lifestyle lots at a relatively lower price per square metre, which may capture a broader range of potential buyers.”
The latest Greenfield Market Report from RPM shows the first increase in sales across Melbourne and Geelong’s growth corridors since the September 2021 quarter, when sales grew to about 7850 lots.
However, sales remain 53 per cent lower year-on-ear with purchasers facing persistent affordability and serviceability challenges with interest rate increases in May and June which have significantly impacted borrowing capacity and been exacerbated by cost-of-living pressures, including a ix per cent Consumer Price Index increase in June.
Despite the considerable market challenges, the median lot price grew by 1.3 per cent to $385,000 due in large part to the average size of lots increasing to 355 square metres.
New supply slumped to its lowest level in four years with just 1853 new lots hitting the market as developers hold off releasing new supply while turnover remains low and the average days on market is above 100 days.
This article references findings from our Q2 2023 Greenfield Market Report. For the full report, click here.