Melbourne Property Market – Residential Land Demand Still Strong, Supply Issues Continue
Melbourne Growth Area Land Market: September 2017 Quarter
Only three months ago, the average lot price in Melbourne’s growth area land market was at $271,000 and the volume of sales were again at record levels of nearly 6800 lots, or over 2500 lots per month.
The September 2017 data from UDIA Victoria and key industry research partners has revealed that the strong activity has continued to roll on, with median lot price jumping to over $288,000, another 6.3% increase in just three (3) months, and more than 26% higher than this time last year.
Median lot sizes in Melbourne’s growth area property market remain relatively unchanged compared with 3 months ago at 416m2, but still just under 2% smaller than the same time last year.
The rate of price growth for land continues to outstrip established areas which have levelled off a little recently. Demand appears to remain high, but land supply shortage levels appear to be having some impact, with only a couple of weeks’ worth of stock available for sale.
Land sales volumes are still very high but have levelled off at just under 6800 lot sales for the quarter. This trend may continue in the short term, with some moderation to net overseas migration projected, and although the gap between land price and established area prices is also getting smaller, there might still be a bit of room for further price growth. At some point though, land price growth may also slow.
Below is a graph from RPM’s research division which provides a snapshot of the land sales volume changes over the last 15 months.
Update on VPA’s Commitment to New Land Supply
Since the Victorian Planning Authority’s announcement to re-zoning approximately 100,000 lots via 17 Precinct Structure Plans by the end of 2018, a couple of PSP’s that were in progress have now been completed.
Mt Atkinson & Tarneit Plains were completed in September and Donnybrook & Woodstock in November 2017, representing an estimated 6,700 and 16,400 new dwellings respectively. This adds to the estimated 15,000 dwellings in the Wollert PSP completed back in February 2017.
Plumpton and Kororoit PSP’s have been submitted for approval and the latest advice is they are due for completed by the end of 2017, adding another estimated 20,000 future dwellings combined.
