Bendigo new land sales remain low despite uptick

NEW land sales in Bendigo rose in the September quarter, defying a decline in transactions across the broader Melbourne and Geelong growth areas, a new report by RPM Research, Data & Insights has shown.

The latest Greenfield Market Report from RPM revealed 34 new lots sold in Bendigo during the quarter, a 17 per cent increase on the June quarter, when sales fell to just 29 lots.

Despite the lift, the result was a 51 per cent decline on the same quarter last year, which followed triple-digit sales in the first half of 2022, and the second-lowest period recorded since Q1 2015.

Compared to the Melbourne and Geelong growth areas, however, where new land sales dropped 6 per cent in the quarter after gaining 13 per cent in Q2, the Bendigo market held relatively strongly.

RPM national managing director project marketing Luke Kelly said the subdued conditions reflected the multitude of hurdles facing prospective buyers from reduced borrowing capacity, down 30 per cent from April 2022, through to stubborn inflation and cost of living pressures.

“Bendigo recorded a comparatively solid quarter, however we anticipate new land sales activity to remain muted over the near future, particularly with prices holding firm,” he said.

“A modest gain of one per cent saw the average lot price rise to $277,500, a 4.5 per cent increase on the same quarter last year, with the median lot size increasing a significant 29 per cent to 630 square meters.

“Unfortunately, we have not seen the same level of developer discounts offered in Bendigo to stimulate sales that we have in other Victorian regions, where incentives of between five to 10 per cent are being offered off the headline price to incentivise buyers to act.

“While this could shift in the lead up to Christmas, as developers seek to move titled stock before the festive season, there’s a trend of communities in this region focusing on working through construction backlogs and settling past sales, rather than actively stimulating new ones.”

Concerningly, Mr Kelly said there had been 35 sales cancellations during the quarter, marking the highest number on record, as buyers reconsidered or struggled to settle on previous land purchases.

“As a result, despite just 13 new lots being added to the market, there were 218 lots remaining at the end of the quarter, a level not seen in three and a half years,” he said.

“We anticipate there will likely be an elevated level of lots returned to the market over the next 12 to 18 months, as buyers see their purchasing power reduced by the extended period of high interest rates, including the latest increase this month.”

On a positive note, Mr Kelly said sales were distributed across the north, west and east, in contrast to previous quarters, where the north dominated with an 89 to 90 per cent market share.

“While the north still led with 59 per cent of sales, there were solid sales in the west, at 26 per cent, and east, at 12 per cent,” he said.

“This diversity of new land will assist the region moving forward, attracting a broader range of buyers and providing more options for those looking to build a new home.

“In the west, buyers are benefitting from value for money with larger lifestyle lots, averaging 685 square meters, being offered at a more affordable price per square metre, while the east is providing premium lots, which average 738 square meters and are appealing to second and third home buyers.”