New home demand withstands interest rate rise
Purchaser sentiment has remained largely intact despite the February interest rate rise. Gross lot sales across metropolitan and regional growth areas climbed to 1,169 lots, equating to a sizeable 41% escalation on the corresponding sales activity in the same month last year. The new home market continues to benefit from a relatively deep pool of affordable housing options. Developer rebates and incentives are also helping buyers offset the reduction in borrowing capacity following the rate rise. These supports are likely to remain important as broader cost of living pressures persist.
Share of sales activity highest in Northern corridor, surges in Ballarat
All growth corridors recorded a lift in monthly sales. The northern corridor posted the strongest growth within Melbourne, accounting for 27% of total sales and overtaking the western corridor, whose share eased to 24%. Geelong maintained a relatively high 14% share of sales from the previous month, while Ballarat’s proportion of total sales escalated to 9% as more affordable price points supported new home demand.
Melbourne’s median surpasses $400K, while affordability pressures lead to annual decline in Geelong
Melbourne’s median lot price rose 1.3% in February to $402,000. The increase was supported by a near 1% lift in median lot size to 353sqm, along with a higher share of sales occurring in the relatively more expensive south east and northern corridors. Geelong’s median lot price also rose modestly, increasing 1% to $389,000. However, it remains 4% lower year on year, with the median lot size contracting 5% to 399sqm. This suggests demand in Geelong is shifting towards smaller, more attainable product, which is boosting sales rates.