First home buyers still in the game as lot sizes fall in Greater Geelong

According to new data, first home buyers have re-entered the market seeing them being an important boost to the housing sector over the last 12 months as prices begin to stabilise.

According to CoreLogic, as of January 2024, first home buyers remain the most active buyer group.

Nationally, first home buyers accounted for 28.3% of loans, while in Victoria, this figure was higher at 31.7%.

Red23, specialist sales and marketing partners for land developments across Victoria, have observed that over the past 5 years, the time required to save has increased in most capital cities except for Melbourne for homes, and Sydney and Melbourne for units.

In Melbourne, homes are taking 3 months less to save for, and units 8 months less according to Red23’s New Land and Housing market update report.

Sydney and Melbourne are the only cities to experience a reduction in the time required to save for an entry-priced unit compared to 5 years ago.

The most affordable options, which require the least amount of time to save for, have remained unchanged since 2023; however, the required time has slightly reduced.

They are as follows:

• Melton/Bacchus Marsh – 4 years and 6 months

• Sunbury – 4 years and 6 months

• Tullamarine/Broadmeadows – 4 years and 11 months

• Wyndham – 5 years and 1 month

• Moreland/ North – 5 years and 1 month

The report shows that the Metropolitan Melbourne median land price is currently at $412,000, an increase of 0.35% MoM and 2.23% higher than last year.

There has been a shuffle in the median land prices and ranking due to a change in the median land size.

Greater Geelong went from ranking 3rd to 5th due to the median land size falling from 415sqm last month to 406sqm, equating to a $/sqm rate of $1,047/sqm.

Meanwhile, Melton moved from 5th to 4th due to an 8sqm increase with a median land price 1.24% higher than last month.

Whereas Whittlesea’s median land size reduced by 20sqm, bringing the median land price 3.75% lower than last month.

This significant reduction in size may be due to 30% of lots sold in February being greater than 400sqm.

While the stage 3 tax cuts are expected to increase the take-home money for low to middle-income earners; it is expected to have little impact on the time needed to save for a deposit.

 

It is expected to help improve the time to save for a 20% deposit by an extra month for entry-priced houses in most capital cities as well as an additional month for entry-level units in Sydney, Brisbane, Adelaide, and Perth.

However, this alone is not enough to stimulate housing activity.

Domain’s First Home Buyer report also highlights that there is an undersupply of affordable housing across Australia as well as a need for federal government policies and additional stimulus to help first home buyers.