New housing estate land allotment prices have fallen in three Melbourne growth areas.
BLOCK sizes have shrunk so much they’ve dragged down median land prices in a handful of Melbourne’s growth areas.
The reductions come alongside suggestions Victoria’s house and land market could soon be punctuated by more Australian-born buyers, and a greater focus on regional housing, as well as townhouses and apartments in Melbourne.
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Released today, Oliver Hume’s latest Land Market Report revealed median land prices fell in Cardinia by $25,800 (7.1 per cent) to $338,000, Hume from $350,000 to $339,500 (3 per cent) and Casey by $5,100 (1.4 per cent) to $360,000.
Reduced prices are believed to reflect shrinking lot sizes.
Research director George Bougias said the price per square metre had been fairly stable in all three instances, hinting shrinking block sizes were behind the reductions.
Substantive growth in the number of lots being sold between 200sq m and 400sq m, as well as reductions in the number being sold above and below those sizes, backed his claims.
City wide, the median price remained stable at $325,000, though Melton’s rose about $20,000 (3.4 per cent) to $305,000.
But with prices higher comparative to the rest of Melbourne it was possible Casey and Cardinia’s median land price could continue to slide, Mr Bougias said.
“We will probably see prices come down a little bit, moderate, but that’s just going to be a response to the growth of the past few years,” he said.
The reductions reflected the end to an upward cycle that had seen demand and prices soar in recent years, but had been slowly swinging back since about February this year for a number of reasons.
“The main thing affecting the overall market is what’s happening with the banks and credit,” Mr Bougias said.
“The other is that where prices have got to at the moment and the stage of the property cycle, after several years of strong growth this is a natural process of the market moderating.”
Melbourne’s established suburbs could be home to more apartments and townhouses in the next stage of the new housing market cycle.
A strong economy and population growth continued to underpin the market, he added.
The next phase of the house and land cycle was likely to be characterised by more regional housing, as well as townhouses and apartments in Melbourne, Mr Bougias said.
It might also feature more Australian-born buyers.
The percentage of Australian-born buyers rose more than 10 per cent in the last three months, and now reflects more than 40 per cent of the market for the first time in years.
“Overseas-born buyers are still a very strong market segment, but we are now seeing a return to the level we were seeing three or four years ago,” Mr Bougias said.
“The great Australian dream is still achievable, it’s all a matter of supply.”