Geelong Advertiser | Geelong Builders Warn Rising Red Tape, Taxes Threat on Homes Target

How Is Geelong's Land Market Holding Up Against Melbourne?

Peter Farago of the Geelong Advertiser reports on rising frustration among Geelong builders over red tape, property taxes and planning costs, following a Housing Industry Association roundtable ahead of the state election. Oliver Hume Chief Economist Matt Bell provides data and commentary on how Geelong's new land market is tracking relative to Melbourne.

Geelong's Land Market Compared to Melbourne

Bell said Geelong's new land market was performing better than Melbourne, with average monthly sales of 120 blocks of land in line with the long-term average and a median lot price of $397,000, just below Melbourne's median of just over $400,000. He noted a decently sustained period during and after Covid where Geelong land prices exceeded Melbourne's, which he said was not the natural order of things, adding the market remains relatively competitive but arguably not quite competitive enough.

Bell attributed Geelong's comparative resilience to affordability, noting the region sits at a median house price of $740,000 and below, compared with a Melbourne median close to $800,000. He said it is the top end of the market that is hurting more than the bottom end as a result.

Buyer Incentives and the Pull of Established Housing

Bell said Melbourne developers were beginning to roll out incentives and rebates for new home buyers, a practice that was more prevalent in Geelong the previous year, with land rebates of $60,000 to $70,000 in Geelong compared with $30,000 to $40,000 around Melbourne. He said government taxes and charges built into new land prices were pushing buyers, particularly first-home buyers, toward cheaper established homes instead.

On the broader downturn, Bell said federal tax changes had created some weakness in the housing market, though the market was already declining beforehand, pointing to three interest rate increases this year and the effect of investors exiting the market on price growth. He also noted examples of recently built homes returning to market for less than their original construction cost.

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