Residential land sales in Melbourne in April rose to 1,503 transactions, the highest ever recorded for that month, and around 21 per cent higher compared to April 2015 according to new data from Oliver Hume.
The trend points to growing buyer confidence and robust demand for land development opportunities according to the national property firm. April 2016 recorded 1,503 transactions – a firm increase from April 2015 data, which recorded 1,245 sales.
The sales volumes are the highest for April since the leading property firm began tracking data in 2004 with 2016’s April sales representing a minimum 12-year high.
Oliver Hume Research Manager George Bougias said the result speaks volumes about Melbourne’s land market.
“The results represent the highest volume of transactions for the month of April since 2004 when Oliver Hume began recording the data – back when transaction numbers rarely reached over 500, with April 2004 itself only recording 386 transactions. Recent data reflects the continued strength in the market which we have seen in recent years,” he said.
“Since April 2014, we’ve seen year-on-year annual growth in monthly sales ranging from 62 per cent (April 2014 to April 2013), 38 per cent (April 2015 compared to April 2014) and now 21 per cent (April 2016 compared to April 2015),” Mr Bougias concluded.
“Leading the charge in 2016 are Melbourne’s western corridor markets with 689 sales in April 2016 with Wyndham, Casey and Melton the strongest performing locations accounting for 23 per cent, 19 per cent, and 23 per cent of the total, respectively. “
Sales slowed toward the end of 2015 with expected seasonal drops at Christmas, but 2016 has seen monthly sales consistently rise.
“Sales are expected to remain strong as population growth continues and lower interest rates support demand,” he said.
Top performing regions
“Melton has experienced a significant increase in sales coinciding with Bridgefield’s (Rockbank) launch in March this year, and the resulting interest from buyers,” Mr Bougias said. “The top 10 performing projects have delivered a median sales rate of 28 transactions per month.”
Median land prices
Gross median land prices ranged from $152,275 in Melton to $230,100 in Casey.
“Median lot prices are now seeing a bump in growth after an extended period of relative stability, a marked trend visible in locations including Cardinia, Casey and Whittlesea, indicative of broader movement in outer Melbourne.”
“Buyers are taking the leap and buying land as a true asset which speaks to confidence.
“There is a visible resumption on price growth clearly evident upon looking at the cycles.”
Time on Market
“Average time on market saw a two-third reduction of 62 per cent since 2012 to notch the current all-time low of 2.4 months signifying the pure speed of sales.
“The most recent peak of 6.6 months was recorded during the fourth quarter of 2012.”
Oliver Hume Director Paul Ciprian said the rising Victorian population combined with steadily improving economic conditions while supporting sales.
“As Victoria’s population and economy have continued to grow, so has the number of buyers looking for opportunities to build a home.
“The month of April represents a high point in the market cycle,” he said.
“Sales volumes have seen an historical jump, production levels are now at capacity and prices remain affordable, particularly when compared to Sydney.
“But at the same time, strong land sales activity and development during the last few years has begun to impact inventory and the amount land available for purchase.
“Upward pricing pressures are being restrained by a desire for wider Melbourne projects to secure market share, which is great news for buyers.”
Source: The Urban Developer