The gradual recovery in new home demand that began in Q1 2024 continued into April, with gross lot sales hitting their highest monthly total in nearly two years. This was due to buyers rushing to purchase before the National Construction Code (NCC) changes, which increased new home prices.

However, sentiment shifted in late April, when Q1 CPI data revealed an uptick in inflation. The news dampened market confidence and led to a significant drop in sales activity in May, making it the weakest month for lot sales in 2024, aside from January’s seasonal low.

Sales recovered in June as buyers took advantage of end of financial year rebates and discounts, typically ranging from 5% to 10% of the gross lot price. Melbourne’s median lot price increased 1% over the quarter; these incentives are supporting the headline figure remaining at near record levels, edging higher to an average of $387,000 in Q2.

Overall, Melbourne and Geelong’s growth areas recorded 2,316 gross lot sales in Q2 – marking a 12% increase from last quarter and a 7% rise from the same quarter in 2023. Geelong saw a notable 69% increase in sales from its long-term low in Q1, thanks in part to a 5.7% drop in its median lot price.

Looking at the annual trends, three of the four growth corridors saw double digit sales growth, while the Northern saw a decline. In Melbourne, the average trading days for lots improved to around five months this quarter, compared to six months in Q1. Geelong’s trading days extended to over seven months due to a higher proportion of titled lots, which made up 37% of Melbourne’s total sales and 75% in Geelong.

New lot supply increased by 19% over Q2 to 1,812 releases, surpassing corresponding growth for lot sales of 12%. As a result, unsold lots rose by 4% to about 5,266 lots by the end of Q2.

This article references findings from our Q2 2024 Victoria Greenfield Market Report. Read the full report here.