The new home market has continued to go from strength to strength in April, with sales activity largely unabated by the conclusion of the HomeBuilder Scheme at the end of March, and lot prices experiencing a significant increase.
Melbourne and Geelong growth areas recorded 2,522 gross lot sales in April, almost identical to two months earlier in February when lot sales were boosted by the HomeBuilder grant, and only 14% below last month’s record number. Moreover, April’s result equals the fourth highest monthly total for gross lot sales since the start of 2012.
Casey continued its upward trajectory with a new long term high of 481 lots sold. The ending of HomeBuilder has had less impact on new house demand in Casey, considering its relatively low proportion of titled lot sales over the last few months. Conversely, sales activity declined across most other growth areas, except for Cardinia and Hume. However, sales volume for these two corridors remain small in comparison with less than 100 lots a piece.
Price growth was just as notable as sale volumes, with Melbourne’s median lot price escalating a considerable 4.3% over April to $318,000. This was the highest monthly growth rate observed in over two years, while the median per sqm price increased at a commensurate rate, further highlighting the strength of demand. While historical low housing interest rates have been in place for some time now, this pick up in price growth has only just come through following the conclusion of HomeBuilder.
Melbourne’s established house price median surpassing the significant $1,000,000 mark in March quarter 2021 has accentuated the comparative affordability attraction of a new house/land package. This is likely to have augmented new house demand, already boosted from the structural shift in purchaser preferences towards larger homes, and could allow for prices to settle at a higher level while not impacting sales activity. Indeed, early indications from May point to a continuation of robust lot sales.