Recent stimulus measures have translated
into a 46% jump in sales

RPM Real Estate Group’s Q3 Residential Market Review reveals the recovery in Melbourne’s land market is underway, with recent stimulus measures translating into an uplift in gross lot sales for the sixth consecutive month.

The report shows total lot sales across Melbourne’s and Geelong’s land market increased 48 per cent to 2,657 for the September quarter from the previous quarter.

RPM’s head of Communities Luke Kelly said renewed confidence and increasing housing values in the established market is encouraging ‘move up’ buyers to sell their current home and upgrade to a new house and land package.

“This buyer cohort is supporting still prevalent first home buyers who comprise 68 per cent of owner occupier purchases, providing a more balanced land market.

“Although Melbourne’s median lot price rose marginally to $315,500, we’re finding that continued incentives in the order of five to 10 per cent, which equate to sub-$300,000 pricing, and well-priced titled stock is attracting still price-sensitive buyers.

“If buyer confidence continues to strengthen, incentives and rebates continue to materialise into net median pricing under $300,000 and the median lot size remains under 400 sqm, we will likely get back to a stable and sustainable market by mid-2020,” he said.

In the apartment and townhouse market, Mr Kelly said despite recent price growth for established housing, the medium and high density market is in a precarious position given building approvals continue to slide.

“There is growing concern of an undersupply of new dwellings over the next few years to meet demand driven by ongoing population growth,” he said. “In the meantime, in the high density apartment sector, slow pre-sales continue to impact developers’ ability to source finance while build quality concerns are dampening buyer confidence, at least in the short term.”

A copy of the report covering the greenfield market, development sites, apartments and townhouses and international investors is available via the link above.