Buyers lean towards taking the plunge

Many new home buyers are still sitting on the fence when it comes to buying a block to build. Although, as interest rates stabilise and employment growth remains positive, the general market sentiment remains sound and more encouraging, with higher sales numbers in April indicating some improvement in the market.

A little caution still exists, especially in the first home buyer market where the time to purchase is still unpredictable as lack of commitment or urgency continues.

Red23, specialist sales and marketing partners for land developments across Victoria, have observed that at the time of enquiry, most buyers would consider their timeframe to purchase to be between one to three months or 12 months or more, depending on where they are in their buying journey.

The “time to buy a dwelling” index, in accordance with Westpac’s consumer sentiment survey in April 2024, was broadly unchanged; however, buyers’ price expectations are holding at optimistic levels.

In our region, the Greater Geelong median land price sits at just on $420,000, basically unchanged from last month and now third on the pricing ladder.

Melton has increased by 1.6 per cent, while its median land size reduced from 392sqm to 388sqm, reflecting a $/sqm rate of $1,105.

Red23 research shows that land across Metro Melbourne over the past 12 months has been spending an average of 3.6 months on the market, twice as long as it was in 2022.

However, in Q1 2024, the average timeframe was five months on the market. This increase in the timeframe was likely due to about 40 per cent of stock sold being titled and released to the market/returned in Q2 2023-Q4 2023.

Furthermore, Red23 report that the most desirable land sizes in each municipality this year to date have been 350sqm lots (12.5x28m) which have been the most sold conventional product in five of the eight municipalities, with the most affordable in Wyndham at $384,567 and the highest in Melton at $406,181, on average, this size lot spends four months on the market.

In Casey, 392sqm lots have 7.1 per cent market share of all conventional size lots sold, with a median land price of $456,500 and spending an average of three months on the market.

Mitchell and Cardinia’s most popular lot size is 400sqm (12.5x32m), larger than other municipalities due to its location and demand for larger lots.

The median land price of 400sqm lots is $313,000 and $504,000, respectively.

The median land price in Metro Melbourne increased by 1.5 per cent since last month and 2.2 per cent YoY, reflective of the increase in the median land size from 392sqm to 400sqm.

At the moment there are approximately 3,210 lots available, of which 29 per cent are titled.

This is an increase of 635 lots since 12 months ago, while the percentage of titled lots increased by 25 per cent in the same time period.

The Geelong median land price has remained relatively stable over the past 12 months.