Melbourne, Market Update 2022
Melbourne is experiencing a housing affordability crisis, with new data indicating a decrease in lot sizes and a dwindling availability over the last year. According to Red23's land market data, house prices in most of metropolitan Melbourne have remained stable, however, the actual size and general availability of land has decreased. As an indicator, prices in the Greater Geelong area are up 66.4 percent.
According to the data, there were approximately 1000 lots on the market in Metropolitan Melbourne and Greater Geelong. By the end of February 2022, Melton had the most available land in the region, but was quickly appropriated — with the current availability being a quarter of what was on the market a year ago.
"The Red23 report highlighted
price reduction requests"
In contrast, the median land price increased in four municipalities and Greater Geelong, while the metropolitan price remained the same. Greater Geelong's median land price increased by 38.7%, while its median land size increased from 400 to 457 square metres.
The median land price in Cardinia increased by 5.8 percent, while the median land size decreased slightly. From January to February, the average land prices in Casey, Melton, Wyndham, and Mitchell fell month on month. Whittlesea and Casey had the next highest increases in average land prices over the previous year.
The Red23 report highlighted price reduction requests as well as a slowdown in interest in buying in Melbourne's inner and middle rings. Red23 managing director Terry Portelli stated that, investors are still active while first home buyers are being priced out, with a 3% decrease in first home buyers in the last 12 months. Investors, in contrast, remain 6% lower than figures from 2021. As a result, developers are attempting to encourage more first-time buyers into the market by capping investor sales and lowering deposits from 10% to 5%.
"With higher inventory levels and less competition, buyers are gradually moving back into the driver’s seat"
According to ABS lending indicator data, total home lending in Victoria fell by 7.2% in February. Corelogic data indicates that the advertised stock in Melbourne increased by 5.5% over the previous year. Despite a decline in growth in Sydney and Melbourne, a recent Corelogic report revealed an increase in national house prices by 2.4 percent, or $17,000.
Research director Tim Lawless, from Corelogic found that new listings and increased buyer demand are key.
“With higher inventory levels and less competition, buyers are gradually moving back into the driver’s seat,” Lawless said. “That means more time to deliberate on their purchase decisions and negotiate on price.”
"The federal government's most recent budget report outlined several initiatives aimed at addressing the issue of housing affordability"
The federal government's most recent budget report outlined several initiatives aimed at addressing the issue of housing affordability. These include an expansion of guarantees for low-deposit home loans and the use of the government as a guarantor across three different schemes.
Property industry groups claimed that the federal government had squandered several opportunities to address the housing affordability crisis.
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Referencing,
Herald Sun
CoreLogic
SQM Research
Equity Rise,
Level 3, 31 Alfred Street,
Sydney, NSW 2000, Australia