Sales activity continues to fluctuate
Sales activity continued to fluctuate, declining 8% over July to settle at 748 lots across the metropolitan and regional growth area markets. However, it should be noted that some rebates expired at the end of the financial year, which may have pulled new home demand into the previous month. Although disposable income increased from July after the stage 3 tax cuts came into effect, a subsequent boost to purchaser sentiment will not be immediate. Households are expected to save much of their extra take home pay to replenish savings, while interest rate uncertainty continues to impact confidence.
Ballarat and Western growth areas increase share of sales
Only Ballarat (substantial) and the Western growth corridor (moderate) experienced an escalation in gross lot sales over July, leading to their proportion of total sales lifting to 7% and 44%, respectively. Geelong managed to maintain its share of activity at just under 8%, after lot sales fell marginally during the month. While both the South East (16%) and Northern (21%) growth corridors witnessed a notable reduction in their proportion of total sales.
Median lot sizes grow
After remaining steady at 350sqm through much of FY2024, Melbourne’s median lot size grew by 3.9% over July to 364sqm - the highest monthly figure since April 2023. This underpinned a 1.8% rise in Melbourne’s headline median lot price to $391,000. As a result, the median per sqm rate decreased in Melbourne, although it increased in Geelong. This eventuated after the rate of lot price growth of 3.4%, lifting Geelong’s median value to $395,900, was higher than the solid 2.8% increase in its median lot size top 420sqm. Purchasers are still able to take advantage of widely available discounts in the greenfield market, offering between 5% and 10% off the headline lot price.