ENQUIRIES for new land in September were up across Victoria for the third consecutive month, with Geelong experiencing particularly strong growth.
According to Oliver Hume’s Monthly Index new enquiry volume increase by 19% over September, compared to 7% in the previous month, with a resilient economy in the face of extended COVID-19, along with a positive buying environment due to low interest rates buoying the state’s land market.
In Geelong, where just recently in July there was zero monthly change in enquiries, there was a whopping 96% increase over September, even with August’s also strong increase of 71%.
“Most metropolitan markets experienced an increase in enquiries in September as did key regional municipalities,” said Darren Blair, head of operations at Oliver Hume.
These elevated enquiries are resulting in equally significant growth in reservations, with reservations volume across Victoria growing by 30% over September, up from August’s 21% increase.
“Price growth in the broader established residential market continues to drive strong interest in greenfield markets which remain relatively affordable,” added Blair.
In Melbourne the median lot price is currently around $331,000, after increasing over recent months, with the increasing presence of investors in the share of transactions placing upward pressure on prices.
With key lot categories in the 350-549sqm range recording higher prices across the month as the remain in high demand from buyers, rising to $339,900 from $334,900 in August.
Lots in the 450-499sqm range and the 500-549sqm also saw heightened average increases, increasing from $348,900 to $388,300 and $424,900 to 451,900 respectively.
Meanwhile, 90.21% of all lots sold over September are yet to be titled, with most forecast to remain that was until 2022.
“Expected title dates continue to move further out, especially towards the second half of 2022, reflecting an increasing number of new estates and new releases,” said George Bougias, national head of research at Oliver Hume.
Buyers are also looking to make a transaction just days after making an enquiry, as they look to take advantage of low interest rates, lock in current prices and compete in an active market.
27.3% of buyers signed a contract two to seven days after enquiring over September, with 29.2% taking between eight and 21 days and 8.6% taking between 22 and 30 days.
“Concerns, now just realised, that lending conditions might become more restrictive, due to an introduction of various macro prudential measure, also appear to have played a role in September and previous months,” said Blair.
Investors took up a larger share of residential sales over September, rising from 30.5% to 33.9% over the month.
“Although the impact on the market is likely to be moderate, at least in the short-term, APRA’s initial efforts in slowing the property market may not be the last,” said Julian Coppini, CEO of Oliver Hume, project management.