Gross lot sales of 2,107 in Melbourne and Geelong was remarkable on two fronts, being a long term December high, and the second highest volume of lot sales achieved in 2020 despite the seasonal factors that typically diminish sales activity every December.
New house demand continues to be buoyed by the improvement in Victoria’s economic and employment conditions. This has been further augmented by the shift in property purchaser trends through 2020 to favouring lower density living in Outer Melbourne and Regional Victoria.
The strong sales result can be attributed in part to owner occupiers bringing forward their lot purchase into December, with the ever popular HomeBuilder Grant reducing from $25,000 down to $15,000 at the end of the month. It is estimated that 40% of lot sales were eligible for the full $25,000 grant, with a further 12% to be eligible for the $15,000 grant (based on HomeBuidler’s eligibility criteria to commence construction within six months of signing the build contract).
However, new house demand remains price sensitive despite the historical low borrowing costs, with Melbourne’s median lot price edging higher by only 0.3% to $304,000. The per sqm price escalated by the same percentage rate in response to the median lot size remaining static at 392sqm.
Encouragingly, robust enquiry levels have continued into the start of 2021. This is being supported by the same demand fundamentals of an improving state economy and shift in buyer preferences, and continuation of new home market incentives of the HomeBuilder Grant through to March and State Government 25% stamp duty cut for all vacant residential lot purchases through to June.