QMI: September 2024

The Land markets across the country continue to run at two speeds.In South East Queensland and South Australia, the residential land market is performing solidly, while conditions in Victoria remain challenging.As a result of rising supply in the established market (which has resulted in lower prices), a pricing mismatch is occurring in the greenfield market in Victoria. This combined with general weaker demand (pull forward of sales from 2021 and lack of affordability etc.) is hampering new sales activity across the Melbourne greenfield market.

We are cautiously optimistic that the low point for sales activity has passed and in certain corridors we are starting to see pent-up demand begin to build as developers begin to meet the market in price.

In South East Queensland sales volumes remain above the long-term average, despite a marginal fall in sales volumes in the quarter. Greater Adelaide recorded fewer sales during the quarter because of restricted supply, although levels of enquiries and underlying demand remain high.

New residential land (gross) prices in South East Queensland broke their previous record high in September quarter of 2024, although the pace of growth has begun to slow.

South East Queensland and Adelaide sales volumes should continue to perform well over the short term as more stock becomes available.Over the coming months, we expect the pull forward of HomeBuilder sales in Melbourne will unwind in totality, along with the gradual sell down of excess resale stock, will aid in the rebalancing of market conditions.

Melbourne is looking increasing attractive compared to many other capital cities across Australia, and we believe this will be key to Melbourne’s recovery, as investors seeking higher capital growth prospects, and builders begin to return the market.

Overall, there is a positive outlook for new residential land over the medium to long term. Despite ongoing challenges, population growth will continue to drive strong demand for new property in both the metropolitan and regional regions.