Red23 May land market update

The HomeBuilder stimulus combined with a change in household behaviour, evolving consumer preferences and a recovering economy have pulled the housing market forward according to Red23.

Red 23 is a specialist sales and marketing partner for land developments, medium density and mixed-use property development projects across Victoria.

Its New Land Market Update reports the detached residential market has pulled the overall housing market forward as apartments continued to experience challenges.

As Australian citizens returned from overseas and Australia welcomed more permanent residents to the market, there has been a change in their housing preferences.In the past, those returning to a city had typically occupied apartments before settling in a permanent home.

Red23 reports the pandemic has changed this behaviour, and they are tending to sway towards a detached home.

Despite this, land sales have fallen by approximately 27 per cent across Metro Melbourne and Greater Geelong as land availability remains restricted, with just over one months’ worth of stock to sell.

There are approximately 2,100 lots available at present, down 12 per cent from last month. The percentage of titled stock remains the same as last month.

The end of the HomeBuilder Scheme has played a role in the slowdown of sales, however with only 11 per cent of all available land being titled, it has played a smaller part in stimulating the market in 2021.

Red23 managing director Terry Portelli said the ease in land sales rates across Melbourne and Greater Geelong could be attributed to a lack of stock on the market rather than a slowdown in interest from purchasers.

“This has been evident with our projects, where new land releases have been selling out over the first weekend in most instances or within the following one or two weeks,” Mr Portelli explained.

“The median land size is falling in order to address affordability, as construction costs increase so does the price of building a home, which is seeing buyers forced to secure smaller lots to fit within their budgets.

“Lastly, local government need extra support and resources so PSP’s can be approved faster.

“This will allow more projects to be released and developed and in turn ease pressure on the supply of land across Melbourne and Greater Geelong’s growth corridors.”

Housing approvals data released by the Australian Bureau of Statistics (ABS) has suggested the total approvals in the seven growth areas of Metro Melbourne and Geelong have risen by 13 per cent in Q1.’21, the second highest increase since the September quarter which increased by 21 per cent.