Despite the slow start to the year, all four regional areas improved in Q2 2024, highlighting that buyers are still drawn to the area.

While some of the increased activity is attributed to developer-led incentives, much was driven by the increased supply, offering buyers more choice in size and price.

Although the quarterly price growth provides hope for the regional markets, offering buyers achievable price points is vital to both sales and combating affordability challenges.

The regional areas must heighten their appeal with their price advantage over metropolitan Melbourne.

This is particularly important when considering the elevated lending environment, coupled with higher construction costs and skilled tradespeople shortage, that is making it increasingly difficult to obtain a house and land package.

Until recently, this elevated land market has been accompanied by a robust established market that thrived due to the lack of supply. This moderated in Q1 2024 with a 1.5% reduction and a benign 0.2% gain in Q2.

The plateauing of the established market saw just a 0.2% annual change compared to established Melbourne’s 4.3% annual drop.

Attracting buyers now depends on offering appropriately sized and well-priced lots, especially for first-time and budget-conscious buyers.

The shift towards smaller lots and townhomes meets the need for affordable entry points while the inclusion of traditional lifestyle lots will suit upgraders.

For developers active within the regional markets, finding this balance will be key as high interest rates are expected to continue until early 2025, limiting major market improvements for the next few quarters.

Well-designed estates are quickly capturing the pool of active buyers, and all regional estates must continue their marketing efforts to remain competitive – giving buyers more negotiating power to secure a favourable deal.

This article references findings from our Q2 2024 Victoria Greenfield Market Report.