‘s residential land market grew 6 per cent last year with 57,381 housing lots released to the market, according to a new State of the Land report.
The analysis, released by lobby group, the Urban Land Development Institute, shows the number of transactions increased 10 per cent – 53,107 lots worth more than $13 billion sold in 2017.
The report, based on the National Land Survey Program researched by Charter Keck Cramer and Research4, covers 1200 new housing estates in major capitals.
The report, released at the UDIA’s annual conference in Perth, comes amid intense discussion about housing affordability and follows new ABS data showing ‘s population grew by 348,700 in the 12 months to September 2016.
Melbourne’s greenfields market is booming with a record 22,700 lots released in 2016 making up 40 per cent of the national market. Victoria also welcomed the lion’s share of new immigrants with 127,500 people moving to the state.
The number of lots released last year in Melbourne rose 14.5 per cent from the previous 2015 high. Turnover is so fast that Melbourne and Sydney have barely a month’s worth of stock available at one time.
UDIA Victorian chief executive Danni Addison said “Melbourne’s greenfield market continues to outperform other capital cities with a significant portion of the nation’s annual lot sales”.
“While the median lot price remains lower than the national median, Melbourne’s greenfield market is experiencing rapid price growth, which is concerning from a housing affordability perspective,” Ms Addison said.
Nationally, advertised median lot prices rose 10 per cent during 2016 and are up 24 per cent over four years. The median price of a lot in Melbourne rose 11.3 per cent in 2016 to $237,000 – the biggest price increase since 2010.
Sydney’s asking prices plateaued last year at $465,000 after jumping 35 per cent in the previous two years.
But the increased prices are not a national phenomenon. In Perth, median prices have fallen 12.5 per cent as the end of the mining boom cruelled the local market.
Villawood managing director Rory Costelloe said the mood in Perth was “subdued”.
“But the Melbourne market is certainly on fire, fuelled by migration. For the immigrants from India, the Middle East and Sri Lanka, they want to live in detached houses, they don’t want to live in apartments in the inner city,” Mr Costelloe said.
“In Sydney the market is still strong but the edge has come off a bit,” he said.
In Victoria, Villawood is selling as much in the regional city of Geelong as it has in Melbourne, he said, with buyers attracted by the infrastructure – hospitals and schools – already in place.
“For affordability, you’ve got Wyndham Vale, the further north or Pakenham but they just don’t have the infrastructure,” he said.
To maintain affordability, the report found median lot sizes shrunk to 407 square metres, from 428 square metres in 2015 and 458 square metres in 2014.
This move, which appears to maintain affordability, has effectively increased the price of land per square metre by 13 per cent to $602.
The State of the Land report predicts around 54,000 lots will be released this year with capacity constrained in Sydney and Melbourne and weaker demand in Perth and Adelaide.