Outer Melbourne land tracking at four-year lows: Oliver Hume

Outer Melbourne land tracking at four-year lows: Oliver Hume
Jonathan ChancellorDecember 7, 2020

Five years ago when Melbourne land supply was at its most constricted, there were some 90 housing estates selling land on Melbourne's outskirts. Now there are around 140. 

Land prices in Melbourne’s city-fringe housing estates continue to hover at around four-year lows, according to Oliver Hume.

 Outer Melbourne land tracking at four-year lows: Oliver Hume

And are likely to stay that way as the Victorian state government ramps up new land releases, as Victoria’s population grows by around 2,000 people per week.

Oliver Hume research director Andrew Perkins forecasts lots released will peak above 200,000 for the first time this year.

In three years, that figure is set to treble.

Melbourne’s house and land market typically settles about 12,500 to 13,000 dwellings a year. 

Most developers appear to be more accepting of volume over price growth – over the short-term at least, Oliver Hume suggests.

There has been some price growth on some projects in some municipalities, their recent report noted.

The Q1, 2014 median land purchase price for the first home buyer sat at $192,000 - largely in line with the long-term trend.

"With much discussion to date focusing on the median land price, it is worth noting that the Melbourne growth area gross median land price is still around 16% below its 2010 peak," Perkins said.

Melton, Mitchell and Whittlesea are around 20% down on their peak (falls of between $36,000 - $49,000). Cardinia is surprisingly only 4% down on its peak. 

The time on market index continues to fall. In the December quarter 2012 it took 6.7 months to sell a lot, now it takes around 3.5 months.

Taking account of withdrawn, completed and launched projects, the fully-developed yield at the end of the quarter was just over 125,600 lots across 136 projects (down from its peak of around 145 in mid 2013).

Some 22% of all projects are located in Whittlesea, 19% in Wyndham and 18% in Casey. On a suburb basis, 11 projects are in Doreen and 10 in Pakenham. Mernda rounds out the top three with nine.

The gross median land price is $201,000, or $191,000 net after rebates. After rebates, Wyndham remains the most expensive land market at $214,500.

Casey, with a net median land price of $207,500, is the second most expensive growth-area land market. Casey and Wyndham are only land markets with a net median price above $200,000. 

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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