Melbourne Land Market Snapshot – September 2022

Melbourne’s median lot size diminished by 3.3% to 350sqm - the smallest area over a month. This was a result of purchasers favouring more affordable lots in the face of reduced borrowing capacity. This shift in demand to smaller lots has induced a 1.8% correction in the median lot price to $375,000. Like the previous month, Geelong’s median lot price remained static at $379,000, while its median lot size increased again, by 1.4% to 389sqm. Subsequently, the gap in median per sqm prices between Melbourne and Geelong has widened slightly over September, but remains relatively narrow from a long-term perspective.

Total gross lot sales across the growth areas of Melbourne, Geelong, Ballarat, Bendigo, and Macedon have again contracted over September, after stabilising in the previous month. Sales declined 11% to 935 lots and continued the downward trend in sales activity observed through much of 2022. While the property market headwinds of rising interest rates and increased construction costs continue to stifle purchaser sentiment, seasonal impacts including school holidays and the long weekend are also likely to have further slowed enquiries during September. Consequently, sales activity is now at its lowest level in over three years since June 2019 - excluding the first lockdown in April 2020.

The proportion of lot sales in September improved to 7.3% in Ballarat, 2.5% in Bendigo and 2.2% in Macedon, after all three regional growth areas experienced growth in sales activity over the month. While the Northern growth corridor also experienced an improvement in gross lot sales, it was minimal at less than 1%. However, this growth was sufficient to increase the Northern growth corridor's proportion of total lot sales to 29%.

The breakdown of weekly household income for those households living in a growth area at the 2021 Census, and reported as having a different address five years previous, was fairly similar across all growth areas. Of these households, approximately one-third contained a weekly household income from the $1,000 to $2,000, and another third from the $2,000 to $3,500 range. Those with a weekly household income of up to $1,000 accounted for around 20% of households in Melbourne growth areas, and 25% in regional growth areas.