Melbourne median new lot size falls below 400 square metres: Oliver Hume

New Melbourne median residential lots sizes have fallen fell below 400 square metres for the first time, according to December 2011 quarterly research by Oliver Hume.

The median lot size in the first stage of eight new residential communities’ projects launched during the quarter dropped below 400 square metres to a median of 396 square metres.

Lots less than 400 square metres now comprise 32% of the retail supply compared to around 10% in 2008.

In its recent 2012 interim results, Stockland reported that it was charging a higher price for smaller property lots in its residential developments.

The eight new communities will comprise more than 10,900 lots when fully developed. There were three new projects each in Casey and Melton, and two in Wyndham.

The eight new projects lifted the total number of projects launched this calendar year to 34, a combined fully developed yield of 24,400 lots, the highest on record both in terms of projects and lots.

The median land price across the eight new projects was $193,000 or $188,000 including incentives. 

The most affordable lot released during the quarter was offered for $138,400 in Melton.

During the December quarter, land prices in Melbourne’s growth areas declined by $3,000 or about 1.4% to $215,000 – the fourth consecutive quarter that prices have declined.

Over the past 12 months, land prices are down 4.8% or $10,000 from their peak of $225,750.

According to Oliver Hume there are currently 3,200 lots available for sale, a five-year high and equal to for five months of supply at current sales rates.

The emergence of smaller lot product is well documented and highlighted in the following graphic:

Land supply is now edging close to the industry benchmark of around six months, which was last experienced in the September quarter of 2006.

Casey, Whittlesea and Wyndham dominate supply, with 21%, 20% and 19% market shares respectively.

Mitchell (Beveridge-Wallan), the most recent addition to the six initial metropolitan local government growth areas, is the smallest market, with just under 7% of retail supply.

“Despite recent downward movements during the quarter in the official cash rate, projects sales rates continue their downward spiral – to their lowest levels since 2006,” the report says.