New house demand continued to surge through February, with confidence and lot sales unimpeded by the snap 5 day lock-down during the month that closed sales offices over one weekend. This is evident after Melbourne and Geelong growth areas recorded their second highest monthly gross sales total since the start of 2012 of 2,569 lots.
A combination of the $15,000 HomeBuilder Grant, the ability to lock in housing borrowing rates at an historical low level of less than 2% for the next three to four years, and a change in buyer preference attributed to the pandemic towards lower density larger dwellings, are all contributing to substantial demand for new housing in greenfield areas. Demand is also increasingly favouring lots that are not anticipated to make the HomeBuilder cut off, with these lots constituting 64% of February sales.
All growth areas experienced double digit monthly growth in gross lot sales, except Hume, where sales activity declined. This is in response to Hume’s relatively low number of active estates, which is less than half of the other major growth areas of Casey, Whittlesea, Melton, and Wyndham. Among the active estates in Hume, there is a fair proportion that are either nearing completion or are smaller and boutique in characteristic, which is further limiting lot sale volumes.
Buoyed by strong new house demand and escalating growth in the established house market, Melbourne’s median lot price gained another 1% over February, after last month’s strong growth, rising to $312,950. Per sqm lot price witnessed commensurate growth after the median lot size remained static at 392sqm.
With March being the final month of HomeBuilder, lot sales activity is likely to receive a boost from purchasers as they rush to sign their home build contract and lock in a time-frame to begin construction within six months from the end of March, to be eligible for the $15,000 grant. Early indications from activity so far suggest lot sales volumes in March could possibility surpass that in February.