Purchaser sentiment remains cautious
In January, sales activity across the growth areas of Melbourne, Geelong, Ballarat, Bendigo, and Macedon rose by 8.9% to 573 gross lot sales. Despite this uptick in sales, January’s total gross lot sales remained 4.8% below the figure from the same period in 2023. While the prospect of additional interest rate rises waned (in line with the improving inflation outlook), persistent affordability challenges continued to dampen buyer confidence. As a result, prospective buyers remain cautious, awaiting further improvements in buying conditions before entering the new home market.
Sales activity lifts in South East and Northern corridors
Both the South East and Northern growth corridors witnessed significant increases in lot sales, boosting their share of the total to 26% and 33% respectively, although these proportions were still below the corresponding figure for the Western growth corridor of 38%. New home demand in regional growth areas continues to be fragile, with sales diminishing considerably in Geelong, Ballarat, and Bendigo. Notably, lots sales in Geelong were lower than in Ballarat and only accounted for 2% of total activity.
Lot prices in Melbourne continue to moderate
Melbourne’s headline lot prices eased for the second consecutive month; with the median price contracting by 0.8% to $382,000, while the median lot size remained steady at 350sqm. A growing number of unsold lots, and intense competition from the secondary market, is applying downward pressure to lot prices, with this correction significantly higher when factoring in rebates and discounts. Similarly, Geelong’s median lot price declined by 2.3% to $389,950 in response to a larger 7.8% reduction in its median lot size to 408sqm.