The regional market continued to fluctuate in Q4 2023, initially showing improvements in Q2 due to developer-led incentives, followed by a return of a depressed state in Q3. However, Q4 did defy the expectations of a subdued festive season market, exhibiting increased sales activity in both the Ballarat and Bendigo regions.

Despite this modest gain, these regions maintain some affordability advantage compared to the Metropolitan greenfield markets. The regional established housing market has remained relatively stable, showing a 1.7% gain over the quarter and only a modest 0.7% fall over the year. This contrasts with Metropolitan Melbourne, which saw greater declines of 2.2% and 10.6% respectively.

The combination of a tight lending environment and elevated construction costs (fuelled by labour shortages) means that affordability remains a highly competitive factor for the new home market. The industry has adapted to these challenges with the introduction, and now the continuation, of incentives and rebates to remain competitive.

Ballarat Corridor

Despite the traditionally subdued market activity typical of the festive season, Q4 saw 103 gross sales.

This marks a notable 14% (13 sales) increase from Q3 and a more modest 8% (eight sales) rise from Q4 2022. The modest uptick can be attributed to the extended promotional activities offering discounted titled lots leading up to Christmas.

New lot releases stand in contrast to the sales figures with a sharp reduction since the HomeBuilder Grant; falling from 464 lots in Q2 2021 to 31 lots this quarter. This latest quarterly release marks three of four quarters with less than 100 lot releases, indicating a developer focus on lot delivery over sales transactions throughout 2023.

This decline in new releases coincided with a marginal increase in cancellations, with an average of 58 lots per quarter in 2023, up from 47 lots per quarter in 2022. As a result, the total inventory available on the market has steadily grown through the year, reaching 565 lots by the end of Q4 2023.

This article references findings from our Q4 2023 Greenfield Market Report.