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Victorian Greenfield Quarter 1 in review

GRANT NEILSON, GREENFIELD SPECIALIST

After a disjointed beginning to the year due to the summer holidays and subsequent Covid-19 wave, greater levels of activity in the Greenfield land market were observed in March with 2019 lot sales recorded. This was the first time more than 2000 lots have been sold in a single month since November 2021. Read on to learn more about how the quarter performed as a whole.


Sales Volumes

Supply side factors such as titling delays are continuing to impact sales volumes

In Q1 2022 there were 5,204 lot sales recorded across Melbourne and Geelong. This represents a 26% decrease on the 7,032 lot sales recorded in Q4 2021 and a 39% decrease from the market peak in Q2 2021 when 8,535 lot sales were recorded. 

The recent fall in sales volumes have been largely driven by supply side factors, with many developers holding a large number of unsettled allotments. With the titling dates of new releases in some estates pushing out as far as 2024 the focus of developer’s has shifted somewhat from the selling of new lots to the delivery of lots which were sold over the last 12-18 months, as a result the number of new lots released has slowed. 

Demand remains strong with just 1,576 lots available on market to be purchased at the end of Q1 2022 compared to the 4,683 lots available on market at the end of Q4 2020.

Quarterly Sales, a regional breakdown

Sales volumes fell across all regions in Q1 2022, the most significant fall occurred in the South East region with sales down 43% in comparison to Q4 2021. The North region recorded the highest average monthly sales rate in Q1 2022 at 12 sales per estate, just ahead of the West region at 11.5 sales per estate. South East recorded the lowest average monthly sales rate at 10 sales per estate. 

Lot depth comparison

At the start of 2020 lots with a depth of 32 metres were the most common sold lot type across Melbourne and Geelong accounting for 30% of total sales in Q1 2020. Over the ensuing 18-month period the proportion of lots sold with a depth of 32 metres fell significantly, accounting for 23% by Q3 2021. This is now below that of lots with a depth of 28 metres which accounted for 25% of sales in Q3 2021. Over the Q1 2020 – Q1 2022 period the proportion of lots sold with a depth of 25 metres almost doubled – a trend that we at Core Projects will be keeping a keen eye on over the coming months. 

Medians
Regional breakdown, and quarterly % change

In Q1 2022 the median lot price recorded across Melbourne and Geelong was $372,500 an increase of 19% over the last twelve months.

Price growth has been highest across the South East and Greater Geelong growth corridors with annual increases of almost 30% recorded.  

The significant price growth recorded across Greater Geelong over the last year has seen its median lot price overtake that of both the West and North regions.

Smaller lot sizes on offer in the West and North regions saw them record lower median lot prices in Q1 2022. 

Sales Over Time – Regional Breakdown

Over recent years the West region has been the leader in sales volumes across Melbourne and Geelong. Over recent quarters the West’s market share has increased accounting for 45%-47% of total sales each quarter over the last twelve months up from 38%-39% in 2020.

In Q1 2022 the North region reclaimed the second position on the market share ladder after losing out to the South East region in Q4 2021.