New land sales in Melbourne’s South East Corridor have dropped 24%, as sales across Victoria fell for the sixth consecutive quarter to their lowest level in four years, our Q1 2023 Greenfield Market Report reveals. Lot sales in the South East Corridor fell to just 345 in the first quarter of 2023, representing 18% of total sales across Melbourne and Geelong’s four growth regions.
The decline was in line with a broader market drop across Melbourne and Geelong, where sales fell 9% to just 1,879, down from a high of 7,855 in Q3 2021 and consistent with the previous pre-pandemic cyclical low in Q2 2019 when 1,865 lots sold. Despite the fall, new land prices in the South East lifted to $425,000, a 5.4% increase, largely driven by an increase in the median lot size, which sat at 388sqm, an 8.4% rise.
RPM Managing Director Project Marketing, Luke Kelly, said buyers were sitting on the side line amidst rising interest rates, cost of living pressures, and building industry caution. Of the land sales recorded in Melbourne’s South East during the quarter, owner-occupiers dominated accounting for 81% of sales.
“The South East has the highest proportion of owner-occupier buyers of any of the four growth regions, with many of those purchasing for the long term,” he said.
“Desirability underpins the relatively high median sale price of $425,000, which compares to the average $380,900 across the growth regions, resulting in fewer first home buyers, which make up just 38% of owner-occupier buyers, while 42% of purchasers are couples without children.”
“During the quarter, new releases and sales halved in Cardinia, which negatively impacted the overall sales result, while the decline was more moderate in Casey, where new supply increased by 27%.”
Mr Kelly said, while headline prices held firm, buyers were able to take advantage of an increase in rebates and incentives on offer, which was saving buyers an average 5% equating to about $25,000.
He said, in a positive sign, those walking into new land estates across Melbourne and Geelong’s growth regions had already done their research and were prepared to act, with 43% making their buying decision on their first visit, an increase from 39% last quarter.
This article references findings from our Q1 2023 Greenfield Market Report. For the full report, click here.