The final quarter of 2024 wrapped up on a stronger note than the previous year, with total gross sales across Melbourne and Geelong’s growth areas reaching 2,149 lots. That’s a 20% jump from Q4 2023 – an encouraging sign of a cautious improvement in buyer sentiment.  

However, momentum was inconsistent. Q4 sales fell 9% from Q3, a typical seasonal dip, while each month recorded fewer sales than the last, reflecting ongoing affordability challenges.  

Rebates and discounts continue  

Interest rates held steady in Q4, but this provided little relief to purchasing power. At the same time, building material and labour costs remained high, keeping construction prices elevated.  

To counter these pressures, developers leaned on incentives like rebates, discounts, and government grants. These strategies helped sustain demand, particularly for titled or near-titled* lots, which made up nearly 60% of total sales.  

Even with these incentives, titled lots spent more time on the market. The average trading period in Q4 reached 186 days – the longest on record.  

Prices keep climbing 

Despite affordability constraints, median lot prices rose 2.4% in Q4, pushing values past the $400,000 mark. While this might seem counterintuitive, RPM Buyer Surveys show that upgraders and downgraders outnumbered first home buyers during the quarter. Their greater financial flexibility – bolstered by higher savings and equity – helped offset borrowing limitations.  

However, the headline median price of $401,000 doesn’t fully capture actual transaction values. In some areas, typical rebates and discounts of up to 10% helped ease the burden, though net prices remained elevated.  

Regional trends drive market performance 

Geography also played a role in price growth. The south east, where median lot prices exceed $460,000, gained market share; lifting the overall median.  

By the end of 2024, the new home market had approximately 5,655 lots available – up 5% from Q3. New supply fell 8% to 1,679 lots, while stock returns inched up 2% to 730 lots.

This article references findings from our Q4 2024 VIC Greenfield Market Report. Read the full report here. 

*Within three months of title