Investors seeking out land for home building in Melbourne catchment: Red23

Demand for building block land in all Melbourne's catchment areas remains strong, according to Red23's managing director, Terry Portelli, Land availability is anticipated to slow with limited land releases expected for the remainder of 2021, the Red23 report noted. The median land price increased by 1% in August to $332,400 and by 4% on 12 months ago, according to the residential project sales and marketing company's monthly update. The big price movements came in with Whittlesea and Melton while Casey’s median land price has fluctuated up and down over the last 3 months due to stock availability. "As prices continue to increase in the established and new homes market, affordability has again become an issue. "Presently, we are experiencing an increase in investors as they are encouraged by rising prices and the prospect of capital gains, while owner occupiers are responding to deteriorating affordability. "Deteriorating affordability in the middle ring areas will see many families move further out to greenfield and regional areas or accept living in a smaller townhouse or apartment. "For the moment, detached houses are preferred over medium density living due to the pandemic, however, this trend may soon come to an end." The reported noted land sizes have decreased by 3% in Metropolitan Melbourne and 17% in Greater Geelong in the last 24 months as prices increase. The Metropolitan Melbourne median land size is currently 388sqm and 400sqm in Greater Geelong. "A traditional 400sqm land size has been superseded by a 350sqm lot," the October market report by the greenfield land sales specialist noted. Blocks which are 350sqm are most affordable in Mitchell Shire with an entry price of $245,000 followed by Melton South at $272,000. Wyndham offers this block size at Mambourin for an affordable price of $283,000. In established areas such as Point Cook, this size block is $469,000 and in Cranbourne, it is $366,000. Comparing these lot prices to the same time in 2019, it was $390,000 in Point Cook and $330,000 in Cranbourne. In 2019, it was the most affordable in Strathulloh at $190,000.