This article is from the Australian Property Journal archive
AUSTRALIA’S land market is increasingly two-tiered with the gap widening between the well performing markets in South East Queensland and Adelaide against the more cautious Victorian market.
According to Oliver Hume’s June Quarter Market Insights, Victoria’s land market remains challenged, thanks to increased supply combined with a mismatch between purchaser expectations and affordability.
Oliver Hume is forecasting a return to a more balanced market in the coming 12 months, as supply and demand normalises.
In Victoria, sales volumes were up marginally for the quarter across all key markets but are still sitting near their lowest point in years.
With gross prices moderating from recent highs across both metropolitan and regional markets.
Metropolitan Melbourne land prices were down 2.8% to $394,450 or $1,111/sqm, with a median lot size of 350sqm over the quarter.
“A slowing economy has also impacted Victorian buyers’ confidence. More broadly, higher interest rates and rising living costs remain key factors inhibiting many buyers’ ability to afford a new home,” said Julian Coppini, CEO of project marketing at Oliver Hume.
“Victorian gross prices declined in the quarter due to higher interest rates and cost of living pressures. Incentives and rebates have become increasingly common across metropolitan Melbourne and some Victorian regional markets.”
Meanwhile, South East Queensland’s land market recorded strong levels of buyer activity even with a marginal fall over the quarter. South East Queensland’s median lot size was at 420sqm for the quarter.
The market saw strong growth in gross prices, reaching a new high in the June quarter at $380,640 or $922/sqm.
Adelaide also saw gross prices at a new high over the quarter, up 3.8% over the quarter and 17.4% over the year to $285,300 or $548/sqm.
In Adelaide, volumes remain well above long-term averages even as they moderated over the quarter.
With more than 593 new residential lots sold, down from 634 in the previous quarter and median lot size at 475sqm.
“Gross prices in South East Queensland and Adelaide experienced strong growth over the quarter, both reaching new peaks during the June quarter,” added Coppini.
“Buyer confidence and activity will be partly shaped by their views on potential interest rate movements and the impact of state / federal government cost-of-living stimulus packages. Despite these challenges, a gradual improvement in market conditions and sentiment is anticipated over the medium term.”
