Melbourne and Geelong growth areas recorded a phenomenal result of 2,944 gross lot sales in March, a new long term monthly high, surpassing the previous cyclical peak in September 2017 by over 8%. Monthly gross lot sales reached new peaks in Melton, Geelong, Sunbury & Macedon, and Mitchell. Similarly near-previous highs were also seen in Casey and Whittlesea.

The conclusion of HomeBuilder at the end of March led to some pull-forward in new house demand. While this had some inflationary effect to sales volumes, titled or near tilted lots (eligible for HomeBuilder) only constituted 27% of gross lot sales, compared to 28% of lot estimated to be more than one year away from being titled.

Record greenfield lot sales activity was driven by the continuation of historically low housing borrowing rates, and the structural shift in buyer preferences brought about by the pandemic. This shift included greater value being placed on lower density, larger homes, and less value on proximity to the CBD .

Melbourne’s median lot price declined 2.5% to $305,000, likely attributed to the greater proportion of non-HomeBuilder lots sold. Additionally, per sqm lot price experienced a commensurate reduction after the median lot size remained static at 392sqm.

HomeBuilder has been an unmitigated success in driving lot sales activity, evident by 21,980 new build applications in Victoria since its inception on 4 June 2020 through to the middle of March 2021. Although volume of eligible lots, and builder capacity limits gradually reduced the schemes influence, the Grant pulled forward a considerable amount of new house demand. With population growth slowing as the temporary ban on overseas migration continues, it is likely to create some vacuum in demand going forward. This is projected to lead to sales activity returning to long term average levels in coming months.