The decline in the median price of housing lots and the shrinking of land sizes in Melbourne over the June quarter were seen as positive drivers of the city's property market, boosting sales and trimming selling periods, according to the latest data from real estate group Oliver Hume.
Housing lots stayed on the market for an average of 60 days during the quarter, significantly shorter than the 87 days recorded over the March quarter. Sales volumes also improved to 550 monthly.
"If we look at the key underlying factors that affect buyer sentiment, they all point to improving demand," Oliver Hume head of research George Bougias told The Australian Financial Review.
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However, these recent figures pale in comparison to their peak levels. During the property boom in 2017, which lasted until the first half of 2018, housing lots were changing hands within 30 days on average while sales volume went as high as 1,700 monthly.
Still, the recent developments indicate that the market is bound to recover as demand spikes, Bougias said.
The study found that the median price of a housing lot in Melbourne fell 4% to $312,000. Excluding incentives, the net median price of a typical lot is now under $300,000. This came with smaller lands — developers are shrinking lot sizes to just 393 square metres to attract cost-conscious buyers.
With this, Bougias expects prices to stabilise again over the next 12 to 18 months.
"We have more flexible lending conditions, interest rates are down and falling, there is robust population growth, unemployment remains low and there is an ongoing improvement in the broader property market, which is assisting sentiment," Bougias said.
