Melbourne Land Market Snapshot – November 2022

Melbourne’s median lot price remained static at $380,000 over November. However, with its median lot size enlarging by 4% to 364sqm, the median per sqm price contracted by a similar rate. Geelong’s median per sqm rate also declined, with the 5.4% correction in its median lot price to $389,000 being greater than the 3.1% reduction in its median lot size to 400sqm. Stock levels increased further after relatively low new supply still managed to outpace lot absorption, providing the diminished pool of active purchasers with more choice and an ability to seek more attractive price points for vacant lots.

Total gross sales across all growth areas declined by 15% over November, falling to 792 lots. This level of sales activity is only marginally above the corresponding figure in April 2020 (when purchaser sentiment collapsed as a result of the first lockdown restrictions). This highlights the adverse impacts the consecutive interest rate rises, elevated residential construction costs, and rising cost of living pressures are having on new home demand.

A near doubling of lot sales in Cardinia Shire led to the South East corridor experiencing an increase in sales activity over November with its share of lot sales rising to 22.9%. Conversely, other Melbourne growth corridors witnessed a reduction in new home demand. Whittlesea’s decreased lot sales was the primary contributor to the higher 30% fall in sales activity across the Northern growth corridor, and its resultant proportion of lot sales diminishing to 23%. Notably, Geelong’s proportion of monthly lot sales remain at long term lows at 6.4%

At the 2021 Census, just under 50% of households (who reported a different address five years prior) in the South East, Northern and Western growth corridors contained a monthly mortgage repayment between $1,800 and $2,600. Of these households, around 25%are paying between $1,000 and $1,800 per month on their mortgage. As expected, this was the opposite in Bendigo and Ballarat given their more affordable property prices. Geelong’s monthly mortgage repayments of $1,000 to $1,800 and $1,800 to $2,600 each accounted for slightly more than one third of new households.