Home buyers offered thousands in incentives as Victoria’s struggling land sales slump
Victorian residential land developers are offering thousands in incentives as a new report revealed monthly sales had dropped to the lowest level seen in 20 years.
Property
Don't miss out on the headlines from Property. Followed categories will be added to My News.
Victorian residential land developers are offering incentives up to $20,000 for new buyers on top of government grants as they look to boost sagging sales.
The greenfields developers across Melbourne and Geelong’s major growth corridors reached for incentives as property services group Oliver Hume reported monthly sales had dropped to the lowest level seen in 20 years.
The median price for conventional lots across Melbourne remained steady at $385,000, the latest Oliver Hume Quarterly Insights report revealed.
RELATED: 10 regional hot spots where prices may double in 5 years
1.5m more Aussies to be millionaires in five years
How to cover all your bases when buying a home
Oliver Hume chief executive officer project marketing Julian Coppini said while lower sales volumes were expected over the short term, overseas migration was expected to boost sales.
He said sales also had been impacted by higher interest rates, cost of living pressures and post-Covid moderation in demand due to sales being brought forward in 2020-21.
“We’re starting to see some positive signs. We’re seeing projects which have the right stock, are meeting the market on price are actually selling well,” he said.
“Some new project launches where they’re priced to meet the market have achieved 10 to 15 sales overall on a weekend.”
Mr Coppini said the market turned quickly in April – when volume builder Porter Davis went into voluntary liquidation – which caught developers who had continued with usual price escalations just as a lot of buyers dropped out.
“And then when purchasers finally started to look back at the land market with some disparity and some new projects coming to market with the right pricing, what some developers said was let’s start rebating or incentivising the market.”
Villawood Properties executive director Rory Costelloe said first-home buyers made up half of purchasers for the developer, which is offering a $15,000 boost to eligible buyers on top of the $10,000 first-home owners grant.
Villawood also offers $20,000 grants to care workers, and even airport workers at key Melbourne estates, while other developers such as Stockland also offered $20,000 rebates on selected lots.
“There still a lot of inquiry, but people are so nervous about interest rate stability because of all the news in the media about Eight Homes and Porter Davis,” Mr Costelloe said.
The building industry’s troubles should have passed by the time titles for land sold today were available from next year, Mr Costelloe said.
“It was double the land sales in 2021, so when all those titles came through in 2022 and early ’23 there was so much demand that all the prices went through the roof,” he said.
“There was this wave of demand that we’re still trying to fix and that’s going to take the better part of this year to do it.
MORE: PropTrack data reveals what your home could be worth in 2028
“There is going to be far less house builds next year, so that will bring house prices back down again.”
Mr Coppini said mum and dad buyers were once nervous about title times stretching to 24 months now thought it would give builders a chance to sort themselves out and potentially interest rates to settle.
First-home buyer Rachelle El-Hanna took advantage of Villawood Properties’ $15,000 boost to top up a $10,000 homeowners grant to secure a block in Sunbury, where she plans to build in 2025.
Ms El-Hanna, who lives with her parents in Doncaster, said she was driven by opportunity, affordability and location.
“It’s a great way to get into the market for a first-time buyer,” she said.
“That just gives me more flexibility and how much I can stretch myself financially as well and reduce financial stress. So the affordability was one of the biggest factor of it all. And then also a great opportunity to drive my future.”
Median lot prices moderated across most metropolitan Melbourne growth areas, rising only in the southeast and Geelong, where the volume of sales also lifted.
The most expensive median lot price is $576,000 at Berwick, compared to $345,000 for a block at Wallan and Beveridge, north of Melbourne.
The median price for 400sq m lots in Geelong was $415,000 at Armstrong Creek, and $379,000 at Lara.
Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
MORE: NAB predicts $200k+ plummet in Melbourne’s house price value by end of 2023
Melbourne’s affordable suburbs defying decline: Terry Ryder report
Big banks’ backflip on house price forecasts signals rebound
Originally published as Home buyers offered thousands in incentives as Victoria’s struggling land sales slump
First look: New Coast shopping centre for surprise site
A long-empty site in a surprise location will be transformed into a retail showroom complex under fresh plans lodged with the council. FIND OUT WHERE
Revealed: How much rent you need to pay in every Qld suburb
Rents have increased again in 252 Queensland suburbs, reversing the brief downward trend recorded just three months ago. See how your suburb compares!