Increasing Demand for Smaller Lots in Melbourne
Smaller conventional lots saw high demand through March, likely in response to higher residential building costs. This is highlighted by Melbourne’s median lot size diminishing by 9.9% to a record low of 353sqm with the median lot price contracting 2.4% to $365,000. Significantly, this brings Melbourne’s median per sqm price of lots sold above the $1,000 mark. In Geelong, the median lot size increased 12% to 448sqm, underpinning a sizeable 21.1% escalation in its median lot price to $445,900.
Vacant Lot Demand Stabilises
Growth areas of Melbourne, Geelong, Ballarat, Bendigo, and Macedon recorded 2,158 gross lot sales in March, 2.1% below February. Despite this reduction, new home demand remains solid at above long-term average levels. Purchaser confidence is being supported by Victoria’s ongoing economic recovery and strengthening labour market conditions, which is also assisting to withstand the headwinds of rising construction costs and cost of living pressures.
Northern Corridor Recovers
The Northern and Ballarat growth corridors experienced an increase in sales activity over March, leading to their share of total gross lot sales increasing to 26% (+4%) and 6% (+1%) respectively. This came at the expense of the Western corridor which diminished to 36% (-2%) and the South East corridor which fell to 17% (-3%).
Population Rises Strongly Across Growth Areas
It is projected that the final 2020/2021 population figures will show growth of circa 38,600 persons across Melbourne’s growth areas, and 15,700 persons in Regional Victoria. This compares to a net reduction of 44,800 persons in total for Victoria, as the temporary ban on overseas arrivals effectively stopped student and worker migration.