Melbourne, Victoria

Melbourne has released 1800 new lots to the market from June - September 2019. Based on recent clearance rates for new land production, expected net lot sales for the quarter would be 675 per month (average 8,100 sales per year).

The median lot price for new lots released is $330,000, which represents a small drop of $2,000 on the prior median for the Melbourne greenfield land market.

In a sign of changing dynamics, different estates have been both discounting and increasing land prices across the market. This is also corridor-related as some areas with relatively low levels of supply have not seen any reduction in prices at all whereas others which have higher supply have had significant reductions. Developers are keen to maintain or lift price points where possible.

Sales volumes however are well down on expected levels of demand, which appears to be driven by the pressure being placed on the market by re-sales of contracted lots.

Overall, conditions suggest that the market may be building up demand (as population growth has continued) which is now beginning to show across the established market. For the land market, however, it is likely to be a further 12 - 15 months before this will flow through.  Sales leads at Satterley estates have come off slightly during August but are still around 50% higher than the same time in 2018.

While sales activity and demand seem to be picking up, supply too has been increasing.  Research4 data indicates that since 2008, 9 new projects are launched on average every quarter.  The majority of these new estates are small to moderate, with a combined development capacity of 90 new lots per month (1,080 lots per year).  By contrast, during the September 2019 Quarter, 18 new estates have been launched.  This increase can be attributed, in part, to increasing supply from the Cardinia Creek South PSP area (formerly McPherson) in Clyde where Mirvac has recently launched the 2,000+ lot masterplanned community Smiths Lane.

Seasonally adjusted unemployment in July was again steady at 4.8%, below the national figure which was also steady at 5.2%.

 (Source: ABS)