The Victorian housing market has continued to rebound since the state’s extended lockdown, recording yet another strong quarter of land sales and house price increases, according to new data released by RPM Real Estate Group.
The group’s Q4 Residential Market Review promotes a positive medium- to long-term outlook but warns of the need for an extension to the HomeBuilder grant to cushion buyers and builders post-March following the removal of JobKeeper and JobSeeker.
While HomeBuilder drove the sale of many titled lots, as buyers move to take advantage of the grant, low interest rates and more positive broader market forces are encouraging the take up of stock that won’t meet the criteria of HomeBuilder.
Regional Victoria rents and sales continue to soar with the regional median house price sitting at $485,500, up 9.5 per cent from the September quarter and up 9.2 per cent from the same quarter a year earlier.
The report shows that land sales in Armstrong Creek jumped 98 per cent from December 2019 to December 2020 with 351 sales in the December 2020 quarter alone.
Torquay saw a 280 per cent rise in sales for the same period, this dramatic increase in sales is off the back of low sales volume during 2018/19 most likely due to lack of titled land availability.
Torquay saw 57 land sales in the December 2020 quarter.
Curlewis also showed a massive increase in land sales of 563 per cent but again this figure is highly influenced by lack of available land in 2019.
Curlewis saw 53 land sales in the December 2020 quarter.
Ocean Grove also saw a large increase of 457 per cent in land sales during 2020 of the back of a low sales period in 2019 and the December 2020 quarter shows 78 land sales.
RPM Real Estate Group director – communities, Rod Anderson, said the December quarter drove 6,508 land sales across Melbourne and its surrounding regions – just nine per cent under the last cyclical peak in September 2017, but said the HomeBuilder scheme needed extending to continue to drive further recovery.
“The outlook for the residential property sector is the most positive it has been in some years and has been supported in recent months by price growth in the established housing market,” he said.
“A shift in sector investments as well as a return of ‘mum and dad’ investors to the market are all positive indicators underpinning market confidence.
“However, there will be headwinds, with higher unemployment rates and the number of those in part-time employment impacting disposable incomes, along with stagnation of wage growth and of course, immigration at a standstill.
“The continuation of HomeBuilder and extension of its criteria to commence construction within six months to 12 months will create a softer landing pad for the economy and property market, avoiding an abrupt halt or property cliff.
“This shores up the construction industry pipeline into 2023 when overseas migration is likely to move back to more normal levels.”
The December quarter saw the continuation of buyers returning to the market, building on the gains made in the September quarter, resulting in a record December quarter and that just fell short of the previous cyclical peak in September 2017.
Of these buyers, 49 per cent will be eligible for the full $25,000 HomeBuilder Grant and 14 per cent for the $15,000 grant, while 37 per cent will title outside of eligibility requirements, demonstrating a buoyant market supported by low interest rates, despite rising house prices.
Melbourne median house prices improved for the first time in four quarters, with a 9.5 per cent increase over the December quarter from $859,500 to $941,000 – the first increase since the March quarter.