Sales activity across metropolitan and regional growth corridors contracted over April, declining 24% to 980 gross lot sales.
Purchaser sentiment has been weakened by deteriorating affordability, after interest rates rose 25 basis points in each of the two preceding months, with the strain on household finances intensified by resurgent inflation. However, seasonal impacts are likely to have also exacerbated the decrease in lot sale volumes, as both school and public holidays impacted trading activity.
Share of sales in Western corridor falls below Northern and South East corridors.
Remarkably, April was only the second time in the last decade that the Western corridor’s proportion of total lot sales was below the corresponding share for the two other Melbourne regions. The Northern corridor maintained its dominant share at 27%. However, there was a notable swap, with the proportion for the South East increasing to 26% and falling to 21% for Western. Geelong’s share remained steady, accounting for 12% of total lot sales.
Rebates and incentives are supporting lot prices, which moved in the same direction as lot sizes.
Melbourne’s median lot price dipped 1.5% in April to $399,000, following a 1% reduction in its median lot size to 350sqm. Rebates and incentives remain available in the new home market, offering discounts from this headline figure, particularly on titled stock and lots to be titled by the end of the financial year. Prices in Geelong went in the opposite direction, with the median value rising 6.5% to $409,950. Some of this was attributed to the median lot size expanding by 3% to 427sqm, its largest size in over a year.