Greenfield sites in Melbourne are seeing a boom in popularity, with new research showing sales over the September quarter far eclipsed previous peak levels.
Prepared by research firms Research4 and Charter Keck Cramer in partnership with the Urban Development Institute of Australia (UDIA), the National Land Survey Program’s Melbourne Greenfield Market Snapshot has revealed that over the September quarter almost 1,900 greenfield lots were sold per-month in Melbourne.
Those figures are 25% higher than the previous land sales peak, which occurred in late 2009.
While greenfield sites may becoming more and more sought after in the Victorian capital, that popularity hasn’t resulted in a similar price spike, with the median price for a lot in Melbourne increasing by just 3.4% over the last 12 months.
UDIA Victorian president David Payes said the current greenfield conditions were a positive for Melbourne.
“It is encouraging that Melbourne continues to outperform other cities with its record sale volumes, high stock release levels, and relatively low prices,” Payes said.
“In terms of pricing, Melbourne has benefited from the high volumes of lots released and competition between developers due the release of numerous Precinct Structure Plans by the previous government,” he said.
According to the report, the median lot price across Melbourne for the quarter was $211,000, making them rather affordable in comparison to lots in other areas of the country.
The Melbourne median price is $250,000 below Sydney’s median, $50,000 below south east Queensland’s and $40,000 below Perth
Melbourne’s average value rate is $493 per square metre (p.s.m.) compared to metro Sydney at $1,022 p.s.m, Perth at $625 p.s.m. and SEQ at $530 p.s.m.
The September quarter saw 5,419 new lots released, which is a record mark, however supply levels are still relatively low.
Stock overhang fell by 15% over the month, meaning there is currently only 1.3 months’ worth of stock still on the market, which is the lowest level since 2010.
The number of active projects is now at 153, which is five more than at the same time last year.
While that level of activity is likely to keep price growth slow for the time being, Payes said it’s likely that prices could accelerate.
“While in the short term competition between projects will subdue any future price growth, the medium and long term price growth increases is likely to be greater if the trend of sales outstripping lot production is not redressed,” he said.
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