Melbourne Land Market Snapshot – December 2022

The growth areas of Melbourne, Geelong, Ballarat, Bendigo, and Macedon recorded just 536 gross lot sales in December 2022, reflecting a 32% decline on sales activity from the previous month. Consequently, gross lot sales are now below both the previous cyclical low in April 2019, and in April 2020 when sentiment collapsed immediately following the onset of the pandemic and subsequent implementation of lockdown restrictions. While the property market headwinds of rising interest rates, cost of living expenses, and elevated construction costs continue to stifle confidence, seasonal impacts of the holiday period and reduced trading days further slowed enquiries in December.

December’s breakdown of sales activity across each growth area remained similar to the previous month. Geelong growth area was the only exception, with lot sales increasing by 2% over December, albeit from long term low levels. Nevertheless, its share of lot sales jumped to almost 10%, marking Geelong’s highest proportion since April.

Melbourne’s median lot price escalated by 1.4% over December, reaching a new high of $385,500. However, the median per sqm price edged lower, after the median lot size increased at a higher rate of 1.8% to 371sqm - its largest size since May. Conversely, the median lot size in Geelong diminished by 19% to a record low of 324sqm. Considering Geelong’s low total lot sale volumes, small changes in the composition of sales have had a significant impact on the overall median. This has resulted in a 2.6% reduction in Geelong’s median lot price to $379,000, although reflects an increase to the median per sqm price.

The 2021 Census found a significant proportion of people lived and worked within the same growth area. This proportion is around 40% for the Melbourne growth areas of South East, Northern and Western, and around 80% for the regional growth areas of Geelong, Ballarat and Bendigo. The share of people working in the Melbourne LGA (which includes the office precincts of CBD, Docklands, Southbank, and St Kilda Road) was highest in the Western growth area at 18%, falling to 13% in Northern, and 7% on South East.