February’s sales growth rate was not unusual
Land sales saw a predictable uptick in February, with gross sales across metropolitan and regional growth areas rising 21.5% to 791 lots. This increase follows January’s seasonal slowdown and aligns with historical trends rather than being a direct result of the February interest rate cut. More notably, annual gross lot sales declined by 2.7%, as affordability concerns and competition from established homes and secondary vacant lots tempered overall activity. While lower interest rates spurred buyer inquiries, they did not translate into a surge in transactions.
Geelong and Northern Corridor led sales growth
Most growth corridors recorded higher sales activity in February, led by Geelong (75%) and the Northern corridor (55%). These gains pushed their respective shares of total gross lot sales to 10% and 27%. The Western corridor remained the most active, contributing 34% of all sales. In contrast, Ballarat was the only corridor to see a decline, with a 75% drop in activity reducing its market share to just 2% - falling behind Bendigo and Drouin/Warragul.
Lot sizes rise to highest in over a year
Melbourne’s median lot size grew 2.7% in February to 360sqm, its highest in over a year. This increase contributed to a modest 0.5% rise in the median lot price, now at $399,950. However, the price per sqm rate fell 2.2%, following a 3% drop in January, indicating improved price points for buyers. Additional incentives, such as rebates and discounts of 5% to 10%, are further improving price points in the new home market. Geelong followed a similar trend, with its median lot size expanding 5% to 420sqm, driving a 6.6% increase in the median price to $405,000 and pushing the price per sqm higher.