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Melbourne's land size is changing
Melbourne’s typical house block has shrunk again, despite land prices and sales numbers falling across the past year.
New figures released by researchers at development advisory firm Oliver Hume show the median lot size for Melbourne was just 393sq m at the end of June this year — 27sq m less than three years ago.
At the same time last year it was 400sq m, and 420sq m in June 2016.
But it has gotten cheaper, with the typical block of land in Melbourne now setting buyers back $312,000 — about $10,000 less than a year ago.
With green shoots now emerging at the city’s house and land estate where sales numbers have rallied after the election, two interest rate cuts and moves to relax lending criteria by the Australian Prudential Regulation Authority, the chance to get more for less is running out.
Oliver Hume national head of research George Bougias said buyers were still in control, but might not be for long.
“Depending on the estate you will probably see rebates of $15,000-$30,000,” Mr Bougias said.
“And in some estates you may get even higher incentives”
“But two years ago there were hardly any incentives, and in the next 18 months we will start seeing the incentives and rebates being pulled back as the market normalises.”
The number of lots sold across Melbourne is now hovering close to the 600 mark after falling below 430 within the past six months.
Mr Bougias said it’s expected the figure will rise to about 1200 sales a month across the coming two years as the city’s population continues to boom, and prices would rise in line with demand.
“There is a lot of underlying demand and pressure in terms of population, and we don’t expect that to slow down,” he said.
Villawood Properties chief executive Rory Costelloe said there was an “immediate” lift in sales after the election, and figures had tripled from April to July in some of their housing estates across Clyde North and Lyndhurst in the south-east and Plumpton to the west.
“There is no doubt that confidence has lifted in the market since the federal election in May,” Mr Costelloe said.
However, there were still risks that some land buyers who bought at the peak of the market and were settling soon could still default on their purchase as low valuations left them unable to proceed with a purchase.