Oliver Hume

The end of Victoria’s first home buyer’s grant coaxed buyers into the cautious market during the June quarter, but Melbourne’s Greenfield land sales were still soft.

The state government’s $13,000 incentive for metropolitan buyers ended on June 30 and brought purchasers forward in the second half of the June quarter.

Quarterly data from Oliver Hume showed gross land prices had not shifted since the last quarter. National head of research Andrew Perkins said despite the cautious market, land was more affordable and the land price was under $200,000 once rebates and incentives were deducted.

Developers and councils have been offering rebates and incentives starting from $8000. The maximum project rebate was $50,000 in Wyndham, the most expensive of the growth areas. The most expensive land I nthe Juen quarter was $242,000 for a median block of 448 square metres in Wyndham.

Prices have corrected after the 2010 advance when they jumped an average of $50 a day and peaked at $225,750 for a median block in the six months leading to December that year.

The most affordable land was in Mitchell at $171,500 and a median lot size of 512sqm. Mitchell recorded the largest shift in supply, dropping from a 20-month supply in the March quarter to 8.5 months in the June quarter. However this was due to stock being withdrawn from the market, rather than sales.

Monthly project sales were weak across all the growth areas.

Hume in Melbourne’s north-west recorded the most sales at about seven a project a month.

Eight new projects came on the market in the June quarter; none are selling rebates. Year-to-date there were 18 active projects yielding 4850 lots. This was a drop compared to the year before. In the six months to June 2011, there were 16 new projects with a 10,350 yield.

Less than 2 per cent of all stock available was more than 800 sqm, compared to 12 per cent in 2008.

Mr Perkins said while buyers were cautious, the market was unlikely to fall further because median house prices in Melbourne were starting to recover. He cited Real Estate Institute of Victoria figures that showed a 3 per cent increase to $535,000.

Tony De Domenico of the Urban Development Council of Australia sais times were tougher than 18 months ago, but he remained optimistic because of stable population growth and employment rates.

Mr De Domenico said the end of the first home buyer’s grant had accelerated sales, but potential buyers were hesitating to put down their deposit and commit to a sale.

To view the newspaper article please click here: Greenfield sales remain soft

Author: Australian Financial Review, 16th August 2012
Posted: 20, Aug 2012
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