Melbourne and Geelong growth areas recorded a strong 2,057 gross lot sales in October. This considerable 528 lot or 35% increase from the previous month resulted in gross sales marginally surpassing the previous 2020 monthly peak in June, and more significantly, was the highest monthly total in three years since November 2017.
Melton’s 501 lot sales was the strongest across all growth corridors, accounting for almost one quarter of total lot sales. This was driven by Melton containing the greatest volume of HomeBuilder eligible lots at the start of the month. The grant continues to maintain elevated demand for titled and near tilted lots, evident by their sizeable 57% of total gross lot sales in October.
The progressive easing of the onerous lockdown measures in place during the previous two months also underpinned October sales activity. The new home market benefited more than others from these earlier easing of restrictions, as sales offices were allowed to reopen for private appointments from the start of October and construction worksites on estates permitted to return to 85% of full capacity.
The subsequent pick-up in economic activity and people returning to their employment led to increasingly buoyant sentiment and more purchasers having the confidence to enter the new home market without the assistance of the HomeBuilder Grant, noting that non–HomeBuilder eligible lots’ 43% proportion of sales being the highest since the introduction of the scheme. This is likely to have played a part in halting the downward trend in median lot prices since June, with the median lot value rising by 1.7% over October to $305,000. The per sqm lot price experienced near commensurate growth as well, after the median lot size remaining steady at 393sqm.
Melbourne and Geelong growth areas are expected to experience robust purchaser demand through the remainder of 2020 as Victoria’s economy continues to open up further. The new home market will beneift more so as incentives and buyer preferences both encourage demand towards favouring the new home market in growth areas over the established dwelling market.