Victorian Greenfield Market Update – December 2023

The growth areas of Melbourne, Geelong, Ballarat, Bendigo, and Macedon recorded 526 gross lot sales in December. This 20% decline from November figures was due to seasonal impacts, including sales office closures. Notably, this month’s figure is 2% lower than the previous monthly low of December 2022, highlighting a persistent weakness in sentiment marked by affordability challenges and reduced borrowing capacity.

New home demand contracted significantly within the South East and Northern growth corridors of Melbourne, causing their share of total lot sales to drop to 17% and 22% respectively. While sales activity also fell in the Western growth corridor, the decline was more moderate, leading to its proportion of total sales rising to 43%. A similar occurrence was witnessed in Geelong and Ballarat, while Bendigo’s proportion of sales doubled to 3% after it was the only growth corridor to experience a monthly increase in activity.

While headline lot prices stabilised, the prevalence of rebates and incentives is masking the underlying depth of price corrections. Melbourne’s median lot price decreased by a marginal 0.5% to $385,000, with a consistent median lot size of 350sqm. In Geelong, solid median lot size growth of 15% to 442sqm led to a 3.6% increase in its median lot price to $399,000, although this resulted in a 9% decline in the median per square metre rate.