Q3 23 GREENFIELD MARKET REPORT
VICTORIA
RPM Group is Victoria’s most successful residential development sales, marketing and advisory agency. We specialise in sales within master-planned communities, medium and high-density developments, greenfield and infill development sites. We advise our clients on all aspects of the sales process from site due diligence, acquisition, planning and risk mitigation through to product mix, pricing, launch, sales and settlement. Our research-backed strategies deliver higher revenues and sales rates, and better returns for our clients.
From our CEO • The likelihood of continued pause in the cash rate is less likely due to rising inflation • Rising cost of living pressures continue to drive uncertainty • Consumer activity remains constrained due to affordability and serviceability levels • Developers and builders meet the market with incentives to drive activity The Victorian property market recorded 8,853 sales on a rolling 12-month basis, and 2,177 sales for the quarter. These figures have remained relatively flat compared to the previous corresponding period, in line with expectations. The Reserve Bank of Australia (RBA) has held interest rates steady at 4.1%, offering a degree of relief to mortgage holders. However, there is growing apprehension due to global supply chain disruptions, escalating geopolitical tensions, and persistent high inflation, which has risen to 5.4%. This remains well outside the RBA’s target range of 2%-3%. The prospect of a rate hike in response to global events has further dampened sentiment in recent months, and we expect another increase in interest rates in November or December. Affordability and serviceability challenges persist, primarily due to household financial pressures. Yet, there is pent-up local demand, bolstered by a strong return in migration which is motivating Victorians to explore property opportunities. However, the continued pressures stemming from the rising
Prospective buyers are seeking solutions to affordability and serviceability constraints, such as considering locations further from the city or exploring smaller lots with a more compelling product mix. Proposed changes to government policies have introduced an element of uncertainty for investors. Many are now exploring other markets. The viability of the greenfield property market hinges on quick decision-making and the release of land to meet not only existing demand but also to accommodate growth in Melbourne’s corridors and regional centres. The current capacity is stretched, demanding urgent intervention. While there is limited stimulus for homeowners, developers and builders are actively engaging the market. Two primary drivers are at play here. First, there is the need to address the volume of titled stock on the market and the urgency to move it. Second, there is the emergence of a relatively strong resale market where consumers are selling land they had previously purchased, often due to difficulties in obtaining financing for construction or general uncertainty surrounding the builder sector. Developers and builders are offering incentives and rebates ranging from 5%-10%, which are expected to continue through to the Christmas period. For more information, please visit: www.rpmgrp.com.au. For a detailed market analysis or a special report, email the team at contactus@rpmgrp.com.au.
cost of living, most notably electricity, petrol, and rent, have seen more consumers exercise caution. We have also seen a noticeable increase in properties returning to the established greenfield market. Pricing has remained stable, with a modest 1.3% increase in the past quarter. Increased enquiries for greenfield properties
Gary Dunne Chief Executive Officer gary@rpmgrp.com.au
underscore the expanding affordability gap between the established and greenfield land markets.
3
What’s Inside
ead 08 LIndicators
10 Development Sites
Vacant Land Market
Robust population growth
Clarity as several
While Q3 maintained stable
coupled with persistently
Precinct Structure Plans
interest rates, prospective
high inflation and falling
halt in Victoria.
buyers still grapple with
unemployment rates are creating increased uncertainty in the market.
4
12
RPM Q3 2023 Victorian Greenfield Market Report
significant barriers.
28 Regional Markets
38 Greenfield Townhomes
44 Outlook
The regional established
Despite reduced purchasing
Total lot sales are
housing market is in a state
capacity and borrowing
anticipated to contract
of flux with limited supply
power, townhomes remain
further over the next
and waning demand.
an attainable option for
two quarters due to the
many buyers.
seasonal impact of the holiday period.
5
A Data Driven, Holistic Approach to Property RPM’s Research, Data & Insights division provides in-depth analysis on current local and international economic and property market conditions. The team consists of economists, property experts, and GIS
This rich data helps our team and clients better understand:
analysts who provide analytical and strategic advice based on real-time market intelligence and insights.
Volume of lots sold or allocated by lot size, frontage, price point, developer, land estate type and location
Our knowledge and expertise are an invaluable resource for RPMs developer clients, empowering them to make intelligent, informed, and strategic decisions when evaluating residential developments and investment opportunities.
Dollar per SQM rates Stock release levels Volume of cancellations on a monthly basis by estate Distribution of new land products by estate
Our data and analysis help clients maximise their marketing efforts and achieve sales target on their estates. We track approximately 600 land estates along the eastern seaboard; collecting extensive data and providing our clients a comprehensive understanding of the market dynamics. This also underpins the core strategic decision-making of our own business.
Performance and distribution of lots of a particular frontage and depth Distribution of price points across a product range Percentage of new land sold within set price ranges Level of activity across a product type, project, market, developer and region Stock level and fluctuations by product type, land estate, developer and market Age of stock, how long has it been advertised, and subsequent price movements based on time on market
6
RPM Q3 2023 Victorian Greenfield Market Report
At RPM, we always start with in-depth research and data-driven insights. When we are guided by data, analysis and key findings, we maximise success. Michael Staedler General Manager Research, Data & Insights
Lead Indicators
Cash Rate - Oct 2023
AU Unemployment Rate - Sep 2023
4.10%
3.56%
4th straight month unchanged, however increased
Marginal increase over Q3, although remains
chance of further rate rises in coming months.
near long term low levels.
Quarterly GDP - Jun 2023
AU Population Change - Mar 2023
0.36%
181,626
The weakest quarterly result since Q4 2018, outside of
Continuing to surge post the re- opening of international borders
periods impacted by COVID-19 related lockdowns.
in early ‘22, experiencing record population growth in Q1 ‘23.
AU Quarterly Inflation - Sep 2023
Exchange Rate AUD/USD - Oct 2023
1.20%
0.64
After easing through first half of ‘23, inflation growth
Relatively unchanged over the quarter.
picked up in Q3, driven by growth in prices for automotive fuel, utilities, and rents.
8
RPM Q3 2023 Victorian Greenfield Market Report
VIC Wage Growth Index - Jun 2023
Melb. Median House Price - Sep 2023
0.69%
$933,500
Keeping in-line with the national average on
Rate of decline slowing, although house price still
both the quarter and year.
down 0.2% quarterly, and 5.7% annually.
VIC Avg Weekly Earnings - May 2023
VIC State Final Demand - Jun 2023
$1,896
0.68%
Ranked 4th highest among all states and territories,
Growth remains solid, aided by record population
slightly below national average.
growth for the state.
VIC Unemployment - Sep 2023
VIC Employment Participation - Sep 2023
3.46%
67.23%
Improved over Q3, and now lower than
Remained steady from last quarter, and is relatively
corresponding figure nationally.
high from an historical perspective.
9
Clarity as Several Precinct Structure Plans Halt in Victoria The 2023 Housing Statement has reimagined its mission, setting a new course to guide Victoria’s growth until 2050. The central shift in focus is the adoption of a 70/30 split for
Wallan South and East, Cardinia Creek South, Oakbank, and
housing allocation, favouring the established suburbs (70%)
Rockbank South were omitted.
over greenfield areas (30%) to accommodate Melbourne’s This shift in the development landscape has tangible effects
growing population.
on the ground, significantly affecting future housing supply These changes have raised concerns, particularly among
in growth areas. The plan’s removal of PSPs that were
greenfield developers and vendors, as the plan has led to
strategically located in areas with a strong emphasis on jobs
the reprioritisation of several Precinct Structure Plans (PSPs)
and education raises concerns about accessibility and the
across the state. The primary concerns revolve around the
necessity for residents to travel further for work and study.
reallocation of PSP that were previously under development but are now lingering in doubt due to their recent removal
However, a number of key planning projects remain as priority
from the VPA’s work program. This removal marks a halt in the
projects. These are listed below.
development of housing infrastructure in these areas, which will impact future supply.
The need for clarity in land planning has never been more pronounced. As government policies evolve to accommodate
Notably, regional PSPs, including Merrimu and Parwan, were
Melbourne’s rapid growth, it’s crucial that industry
removed from the list. In the metropolitan region, Kororoit,
stakeholders have the resources to understand these changes and their implications.
Priority Planning Projects Regional Victoria
Industrial Land
New Communities Melbourne
Wonthaggi PSP
Officer South (Employment) PSP
Beveridge North West PSP
Ballarat Infrastructure Growth Framework
Greater Avalon (Employment) PSP
Gunns Gully Road Interchange GAIC WIK
Shepparton South East PSP
Casey Fields South (Employment) PSP
Greenvale North (Part 2) PSP
Corio Norlane Urban Renewal
Croskell (Employment) PSP
Devon Meadows PSP
Bannockburn South East PSP
Merrifield North
Melton East PSP
East of Aberline PSP
Mambourin East
Clyde South (due diligence only)
Ballarat North PSP
Werribee Junction
Established Melbourne Braybrook Regeneration Project
10
RPM Q3 2023 Victorian Greenfield Market Report
Our Transactions & Advisory division operates across both infill and greenfield areas, providing valuable research, data, and insights on the affected PSPs and their corridors. Our team is committed to providing detailed information, analysis, and support that enables progress.
Ed Wright National Director and Head of Transactions & Advisory
11
Vacant Land Market While interest rates have remained steady in Q3, they have not boosted purchaser sentiment. Enquiries show that prospective buyers are still facing significant barriers to entering the new home market. Borrowing capacity remains down by approximately 30% due to the rapid 400 basis point cash rate increase between May 2022 and June 2023. Elevated new home construction costs, initially driven by supply pressures for materials, then labour, have caused a contraction in sales activity following Q2’s pause in decline. In total, Melbourne and Geelong’s growth areas recorded 2,023 gross lot sales this quarter, a 6% quarterly decrease and a more significant 25% drop from the same time last year. Fragile confidence, coupled with an increasing supply of re-sale vacant lots in the secondary market that is likely absorbing some new home demand, is further contributing to the decline in lot sales activity among estates. The slower sales rates have extended the average time lots spend on the market to five months. When combined with the rise in returned stock, the total number of unsold lots continues to increase. This is severely hindering the ability to introduce new supply into the market, with only 1,538 lot releases across the growth areas this quarter. Additionally, upcoming estates are delaying their entry into the market, with only two new estates this quarter. The greenfield market’s intense competition with the re-sale market and its focus on working through existing stock have led to more rebates and discounts. These incentives typically range from 5% to 10% of the headline price, resulting in Melbourne’s median lot price (without discounts) reaching a new record of $389,000 in Q3, a growth of just under 1% from the last quarter. The price per square metre increased further after the median lot size diminished by 1.3% to 354sqm.
Rod Anderson National Managing Director Communities
12
RPM Q3 2023 Victorian Greenfield Market Report
13
Q3 2023 Vacant Land Market Snapshot
2,023
$389,000
VIC Lots Sold
Melb. Median Lot Price
Sales declined by 6%, after increasing last quarter.
+$3,000 over the quarter, +$12,750 annually.
354sqm
120
VIC Active Estates
Melb. Median Lot Size
VIC Trading Days
Up from 221 last quarter, with active
Remaining in the 350-360sqm range
The average number of tradings days of
estates increasing in Northern and
since September quarter 2022.
lots sold. Up from 107 the quarter prior.
227 Geelong corridors.
14
RPM Q3 2023 Victorian Greenfield Market Report
% of Melbourne Gross Lot Sales by Price Bracket
% Contribution to Total Gross Lot Sales Q3 2023
57% $375K<
50% 22%
12% $351K-$375K
13% 12%
10% $326K-$350K
11% 16%
$301K-$325K
Casey
17%
9%
Cardinia
5%
8%
Hume
10%
Whittlesea
12%
Sunbury
7%
Mitchell
4%
Wyndham
18%
Melton
19%
Moorabool
1%
Greater Geelong
7%
14%
12% <=$300K
18% 36%
0%
Q3 2023
20%
Q3 2022
40%
Q3 2021
60%
Source: RPM Research, Data & Insights
15
Melbourne and Geelong Buyer Surveys Owner Occupier Type
First Home Second Home Third Home Fourth Home Other
Lot Size
49% 36% 11% 1% 3%
Purchase Type
House & Land Land Only Townhome
27% 70% 3%
Current Household Type
Group Household Single Couple Family
2% 14% 21% 63%
Country of Origin (Top 5)
Australia India Philippines Sri Lanka Malaysia
16
41% 33% 10% 5% 3%
RPM Q3 2023 Victorian Greenfield Market Report
>701sqm 676-700sqm 651-675sqm 626-650sqm 601-625sqm 576-600sqm 551-575sqm 527-550sqm 501-525sqm 476-500sqm 451-475sqm 426-450sqm 401-425sqm 376-400sqm 351-375sqm 326-350sqm 301-325sqm 276-300sqm 251-275sqm <250sqm
1% 0% 0% 0% 2% 2% 1% 3% 7% 6% 1% 9% 2% 11% 3% 8% 17% 4% 7% 15%
Home and Land Budget
>$950k $900-950k $850-900k $800-850k $750-800k $700-750k $650-700k $600-650k $550-600k $500-550k $450-500k $400-450k <$400k
6% 3% 9% 8% 10% 15% 14% 16% 14% 1% 1% 1% 0%
RPM surveys every buyer on our clients’ estates in the greenfield market.
Owner Occupier vs. Investor
32% Investor
The following illustrates demographic and purchase intent amongst all purchasers over Q3 2023. For a detailed analysis of any corridor, LGA, or suburb in Victoria, please contact our RPM Research & Insights team. m.staedler@rpmgrp.com.au
68% Owner Occupier
Size of Home (including garage)
>30 sqs 26-30 sqs 21-25 sqs 16-20 sqs <15 sqs
23% 21% 36% 17% 2%
Number of Storeys Considered
Undecided Double Storey Single Storey
11% 29% 60%
17
Western Corridor New Home Market Overview
Buyer Survey Insights
Following last quarter’s improved sales activity, the Western
Owner occupiers represented 59% of Western Growth
Growth Corridor has returned to its downward trend. Gross
Corridor purchasers. This is equal lowest proportion of the
sales fell by 6% to 765 lots, marking a 33% decrease in the
four growth areas. However, the concentration of first home
results recorded over the same period last year. The corridor’s
buyers was high at 68% of all owner occupiers. Couples with
share of total lot sales remains at 38% - marking a three-
children were the most prominent household structure at 51%,
year low.
highlighted by the 25-34 and 35-49-years old age groups each accounting for over 40% of purchasers.
New lot supply has decreased in response to weak sales rates as developers focus on absorbing the stock currently
Over 60% of all purchasers were considering building a single-
on the market. Over the quarter, new supply dropped 22%
storey home, resulting in 35% of purchasers wanting a home
to 611 new lot releases – the lowest figure since Q3 2013.
sized between 21sqs and 25sqs – the largest amongst the
Wyndham attributed much of this drop, with its new supply
corridors. Only 3% of purchasers within the Western Growth
falling by 27%.
Corridor were expecting to spend more than $450,000 on their new home construction, which was substantially lower
The corridor’s median lot price and median lot size contracted
than all other corridors.
marginally over Q3, dropping to $385,000 and 350sqm respectively. Price points in Wyndham and Melton were similar over the quarter; as the median lot price in Wyndham rose 2%, it fell 2% in Melton. Given that both sub growth areas recorded median lot sizes of 350sqm, Wyndham is now only marginally more affordable than Melton.
765
- 6%
611
Gross Lot Sales
New Lot Releases
A 6% fall over the quarter, and 33% lower than the same
New supply has halved from the same time last year.
- 22%
time last year.
350sqm
- 1%
$385,000
Median Lot Size
Median Lot Price
Stabilising at or just above 350sqm since September 2022.
Largely holding constant since December 2022.
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RPM Q3 2023 Victorian Greenfield Market Report
0%
Active and New Estates - Western Corridor NUMBER OF ESTATES
120 100 80 60 40 20 0 Sep-20 Dec-20 Mar-21 Active Estates
Jun-21
Sep-21
Dec-21 Mar-22 Jun-22
New Estates
Sep-22 Dec-22 Mar-23 Jun-23
Sep-23
Source: RPM Research, Data & Insights
Stock Added to Market - Western Corridor NUMBER OF LOTS
3,500 2,500 1,500 500 -500
Sep-20 Dec-20 Mar-21
New Stock Releases
Jun-21
Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Stock Returned to Market
Source: RPM Research, Data & Insights
Buyer Activity - Western Corridor GROSS LOT SALES
AVERAGE TRADING DAYS OF LOTS SOLD
4,000
150
3,000
100
2,000 50
1,000 0
0 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Wyndham
Melton
Moorabool
Average Trading Days
Source: RPM Research, Data & Insights
Median Lot Price and Size (sqm) - Western Corridor MEDIAN LOT PRICE
MEDIAN LOT SIZE
$500,000
400
$400,000
380
$300,000
360
$200,000
340
$100,000 $0
320 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Median Lot Size
Median Lot Price
Source: RPM Research, Data & Insights
19
Northern Corridor New Home Market Overview
Buyer Survey Insights
The Northern Growth Corridor’s proportion of gross lot sales
Owner occupiers accounted for a majority 71% of all Northern
eased from Q2’s decade-high, dropping to 33% over Q3. Sales
Growth Corridor purchasers, with slightly over half being first
activity also fell by 11% over the quarter to 664 lots, with three
home buyers. The proportion of buyers was concentrated in
of the sub-growth areas experiencing double-digit quarterly
the 25-34- and 35-49-year-old cohorts; of these 25-34-year-
contractions. Sunbury was the only sub-growth area to go
olds accounted for just over 30%, while 35-49-year-olds
against the trend with sales activity rising by 21%.
represented just over 40% of the buyer pool. This led to couple with children households accounting for just over
Lot absorption continued to outpace new supply, which fell by
50% of all purchasers.
10% to 519 new lot releases. The Northern Growth Corridor continues to have the lowest average time spent on the
The Northern Growth Corridor was the only corridor to have a
market with lots sold – although this increased over the
larger proportion of double-storey homes over single-storey
quarter to 109 days.
homes; leading to 30sqs+ accounting for 27% of demand – this is the equal greatest among the corridors. This inherently
With its median lot price remaining steady over Q3 at
helped budgeted construction costs for new homes to be
$370,000, the Northern Growth Corridor continues to be more
more evenly spread.
attractive on affordability when compared to both the Western and South East Growth Corridors, which were 4% and 18% more expensive respectively. With potential buyers continuing to be price conscious in the current economic landscape, the Northern Growth Corridor’s affordability has helped to maintain an above long-term average share of total sales activity.
664
-11%
519
Gross Lot Sales
New Lot Releases
Proportion of sales activity remained relatively at 33%.
After increasing through first half of 2023, new supply
- 10%
has again contracted.
350sqm
0%
$370,000
Median Lot Size
Median Lot Price
No change observed in median lot sizes.
The northern corridor retains its relative affordability advantage over other corridors.
20
RPM Q3 2023 Victorian Greenfield Market Report
0%
Active and New Estates - Northern Corridor NUMBER OF ESTATES
80 60 40 20 0 Sep-20 Dec-20 Mar-21 Active Estates
Jun-21
Sep-21
Dec-21 Mar-22
Jun-22
New Estates
Sep-22 Dec-22 Mar-23
Jun-23
Sep-23
Source: RPM Research, Data & Insights
Stock Added to Market - Northern Corridor NUMBER OF LOTS
2,500 2,000 1,500 1,000 500 0 Sep-20 Dec-20 Mar-21 New Stock Releases
Jun-21
Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Source: RPM Research, Data & Insights
Stock Returned to Market
Buyer Activity - Northern Corridor GROSS LOT SALES
AVERAGE TRADING DAYS OF LOTS SOLD
2,500
150
2,000 100
1,500 1,000
50
500 0
0 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Hume
Whittlesea
Sunbury
Mitchell
Average Trading Days
Source: RPM Research, Data & Insights
Median Lot Price and Size (sqm) - Northern Corridor MEDIAN LOT PRICE
MEDIAN LOT SIZE
$400,000
420 400
$300,000
380
$200,000
360
$100,000
340 320
$0 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Median Lot Size
Median Lot Price
Source: RPM Research, Data & Insights
21
South East Corridor New Home Market Overview
Buyer Survey Insights
South East Growth Corridor sales activity improved over
Owner occupiers accounted for over 80% of all sales in the
Q3 to 23% of total sales. Unlike the other corridors, gross
South East Growth Corridor. Surprisingly, given the higher
sales in the South East rose 1% over the quarter to 457 lots.
price tag, first home buyers still constituted 52% of buyers.
Casey accounted for most of these sales and saw a 6% rise in
The corridor had the largest share of single-storey homes,
sales activity from Q2. On the back of substantial growth last
which may help counteract the higher prices.
quarter, Cardinia witnessed a 12% drop in sales activity. Purchasers were largely concentrated in the 25-34- and Although new lot releases rose by 18% over the quarter,
35-49-year-old cohorts, each presenting one-third of buyers.
they remain relatively low compared to long-term averages.
The 18-24-year-old cohort was also much more prominent
Average trading days for lots sold within the corridor
compared to other corridors, accounting for 20% of buyers.
continued to be the longest despite improving slightly in Q3
This helps to explain why the South East Growth Corridor
to 129 days. However, with lot absorption also outpacing new
had the largest share of couple without children households;
releases, the built-up stock levels should be on the decline.
accounting for 38%.
Median lot prices declined by 1% over Q3 to $435,000, although they were still 5% higher than in the same quarter last year and remain the least affordable of the growth corridors. This fall in median lot price could also be accredited to the median lot size shrinking by 4% over the quarter to 375sqm.
457
+1%
345
+18%
Gross Lot Sales
New Lot Releases
Increase in sales activity occurred exclusively in Casey.
Only corridor to witness an increase in new lot supply in Q3.
375sqm
-4%
$435,000
Median Lot Size
Median Lot Price
Largest decrease among corridors, likely in response to
Still the most expensive new home market.
affordability constraints
22
RPM Q3 2023 Victorian Greenfield Market Report
- 1%
Active and New Estates - South East Corridor NUMBER OF ESTATES
60 50 40 30 20 10 0 Sep-20 Dec-20 Mar-21 Active Estates
Jun-21
Sep-21
Dec-21 Mar-22
Jun-22
New Estates
Sep-22 Dec-22 Mar-23
Jun-23
Sep-23
Source: RPM Research, Data & Insights
Stock Added to Market - South East Corridor NUMBER OF LOTS
2,000 1,500 1,000 500 0 Sep-20 Dec-20 Mar-21 New Stock Releases
Jun-21
Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Stock Returned to Market
Source: RPM Research, Data & Insights
Buyer Activity - South East Corridor GROSS LOT SALES
AVERAGE TRADING DAYS OF LOTS SOLD
2,000
150
1,500
100
1,000 50
500 0
0 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Casey
Cardinia
Average Trading Days
Source: RPM Research, Data & Insights
Median Lot Price and Size (sqm) - South East Corridor MEDIAN LOT PRICE
MEDIAN LOT SIZE
$500,000
400
$400,000
390 380
$300,000
370
$200,000
360
$100,000
350
$0
340 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Median Lot Size
Median Lot Price
Source: RPM Research, Data & Insights
23
Geelong Corridor New Home Market Overview
Buyer Survey Insights
Sales activity in the Geelong growth corridor has remained
The Geelong Growth Corridor contained a 59% share of
low this quarter, with gross sales rising by only 1% to 137 lots
owner occupier purchasers, with the lowest proportion of first
– coming off last quarter’s historic low. This has led to the
home buyers across all corridors at 41%. Half of purchaser
average time on market for lots growing to approximately
households were couple with children, which reflected the
five months, further discouraging the release of new lots and
prominence of 25-34-year-olds (32%) and 35-49-year-olds
resulting in a 57% contraction in new supply to 63 lots for
(42%). Additionally, the Geelong Growth Corridor had the
the quarter – marking a decade-low. The low levels of both
largest share of buyers between 50-59-years-old; accounting
sales and new lot releases have led to the growth corridor
for 19% of all purchasers.
accounting for just 7% of lot sales activity. Approximately 56% of buyers desired a single-storey home, There remains a disconnect between buyers and sellers
with 31% intending their home to be between 21sqs and 25sqs.
regarding pricing in the corridor as affordability remains
Interestingly, almost 15% of purchasers intended their home to
the key concern. With median per square metre rates in the
be smaller than 15sqs – this is noticeably higher than the three
sub-market of Armstrong Creek approaching $1,100, and
Melbourne-based corridors.
higher for Bellarine, they are now more expensive than many growth areas in Melbourne. The median lot size across the growth corridor expanded by 13% to 400sqm over the quarter, which has supported a moderate 4% rise in the median lot price to $401,100.
137
+2%
63
Gross Lot Sales
New Lot Releases
Growth off long term low in previous quarter, with sales
A decade low level of new lot releases.
- 57%
activity remaining subdued.
400sqm
+13%
$401,100
Median Lot Size
Median Lot Price
Composition of sales is greatly impacting median lot size,
Increase in median lot size has underpinned median
with overall sales low, leading to sizeable change.
lot price growth.
24
RPM Q3 2023 Victorian Greenfield Market Report
+4%
Active and New Estates - Geelong Corridor NUMBER OF ESTATES
50 40 30 20 10 0 Sep-20 Dec-20 Mar-21 Active Estates
Jun-21
Sep-21
Dec-21 Mar-22
Jun-22
Sep-22 Dec-22 Mar-23
New Estates
Jun-23
Sep-23
Source: RPM Research, Data & Insights
Stock Added to Market - Geelong Corridor NUMBER OF LOTS
1,000 800 600 400 200 0 Sep-20 Dec-20 Mar-21 New Stock Releases
Jun-21
Sep-21
Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Source: RPM Research, Data & Insights
Stock Returned to Market
Buyer Activity - Geelong Corridor GROSS LOT SALES
AVERAGE TRADING DAYS OF LOTS SOLD
1,200
200
1,000
150
800 600
100
400
50
200 0
0 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Armstrong Creek
Bellarine
Geelong
Lara
Torquay
Average Trading Days
Source: RPM Research, Data & Insights
Median Lot Price and Size (sqm) - Geelong Corridor MEDIAN LOT PRICE
MEDIAN LOT SIZE
$450,000
500 400
$400,000
300
$350,000
200
$300,000
100
$250,000
0 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Median Lot Size
Median Lot Price
Source: RPM Research, Data & Insights
25
What Does a 350sqm Lot Cost? Sunbury $353,900 Diggers Rest $320,000
Median lot price by suburb
Bonnie Brook $330,000 Bacchus Marsh $330,000
Melton South $325,000 Strathtulloh $405,100
Aintree $396,000
Deanside $424,000 Thornhill Park $359,000
Tarneit $389,000 Manor Lakes $350,000 Mambourin $365,000
Lara $357,400
Geelong $455,000
Armstrong Creek $382,000
26
RPM Q3 2023 Victorian Greenfield Market Report
Fraser Rise $396,500
Truganina $401,000
Wyndham Vale $350,000 Werribee $363,000
Wallan $320,000 Beveridge $338,500 Kalkallo $368,500 Mickleham $401,000
Donnybrook $349,000
Craigieburn $407,000
Wollert $418,000
Mernda $392,000
Greenvale $480,000
Berwick $532,000 Cranbourne West $435,00
Cranbourne East $427,000
Officer $468,500 Clyde North $414,000
Nar Nar Goon $360,000
Clyde Junction $405,000 Village $390,000
27
Regional Markets The regional established housing market is in a state of flux with limited supply and waning demand. The potential for another rate increase, along with ongoing cost of living pressures, is casting a shadow on sentiment and buyer activity. While there was some improvement in Q2, the subdued market that has persisted for almost a year returned in Q3. This situation is likely to persist in the immediate future, or until the cash rate starts to decrease and overall household expenses ease. The combination of rapidly rising interest rates, uncertainty about construction costs, and the viability of builders, coupled with what has become relatively unaffordable land prices, has led to supply outpacing demand over the past year. The regional established housing market is in a state of flux. There is limited supply coming onto the market and demand has also waned due to the high price levels. This is supported by prices remaining unchanged over Q3 and are still 1.3% below the levels seen in the same quarter last year.
28
RPM Q3 2023 Victorian Greenfield Market Report
29
Ballarat Following an uptick in Q2, sales fell back 25% (-27 lots) to 81 gross sales for Q3. This reflects a 49% decrease (-79 lots) from the same period last year. The improved Q2 sales were attributed to the End of Financial Year offers and incentives, which captured above-average sales during this down cycle. In contrast to Q2s triple-digit lot releases, Q3 saw a more modest 36 lots released, resembling the 2016 Q4 low. This suggests that developers are more focused on delivering lots instead of transacting sales given the overall low market sentiment. We expect stock releases and overall rebates and incentives will increase in the lead up to the Christmas period to stimulate activity.
81 Gross Lot Sales
- 25%
Developers prioritising lot delivery over sales has led to
Down over the quarter and year, and inline with
concerns about stock returning to the market due to valuation
2016 activity.
shortfalls or buyers’ borrowing limitations. Cancellations reached 78 lots this quarter, the highest since Q2 2020,
purchasers from 12 to 18 months ago may be reconsidering
401sqm
their purchases.
Median Lot Size
this is likely to remain a concern with household pressures and distant rate reduction expectations. As a result, many
Low sales and increased cancellations raised the stock overhang to 446 lots, the highest since Q1 2019. On a positive note, two new estates were added in the south and east, providing diversity to the region. Despite reaching a median lot price peak of $315,000 in June 2022, prices fell 4.3% to $302,500 in Q2. A more modest 1% reduction to $300,000 occurred this quarter, marking a
- 10%
After 18 months being flat at 448, a reduction was seen in Q3.
463 Lots on Market
+4%
low not seen since Q4 2021. This price reduction should be considered in context as it occurred alongside a 10% decrease
Increased on the back of an uptick in cancellations.
in median lot size (-47sqm) to 401sqm resulting in an 11% increase in price per square metre (+$73). The remaining lots were larger at 492sqm compared to the 401sqm of sold lots, highlighting the price sensitivity of the current market.
$300,000 Median Lot Price A modest fall in the lots sold has increased the divergence with stock price at $313,000.
30
RPM Q3 2023 Victorian Greenfield Market Report
- 1%
Buyer Activity - Ballarat GROSS LOT SALES
600 500 400 300 200 100 0 Sep-20 Dec-20 Mar-21 Western Region
Jun-21
Northern Region
Sep-21
Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Southern Region
Eastern Region
Source: RPM Research, Data & Insights
Stock Overhang - Ballarat LOTS REMAINING AT END OF QUARTER
500 400 300 200 100 0 Sep-20 Dec-20 Mar-21
Jun-21
Sep-21
Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Source: RPM Research, Data & Insights
Active Estates - Ballarat NUMBER
30 25 20 15 10 5 0 Sep-20 Dec-20 Mar-21
Jun-21
Sep-21
Dec-21 Mar-22
Jun-22
Sep-22 Dec-22 Mar-23
Jun-23
Sep-23
Source: RPM Research, Data & Insights
Median Lot Price and Size (sqm) - Ballarat MEDIAN LOT PRICE
MEDIAN LOT SIZE
$350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0
600 500 400 300 200 100 0 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Median Lot Size
Median Lot Price
Source: RPM Research, Data & Insights
31
Ballarat Outlook Demand for regional change is expected to remain elevated compared to pre-Covid levels. However, the extent of this demand will largely depend on the region offering suitable lots for potential buyers, with emphasis on price and lot size, which may be slightly smaller than traditional lots. Many local buyers have been priced out of the established market, forcing them to leave their hometowns due to a lack of appropriate land lots. The availability of smaller lots, including townhomes, provides budget-conscious buyers with a means to enter the market. However, it’s important to note that lifestyle homes outside the western growth front are still lacking, with 80% of all available stock located in the western region. Given the current interest rate environment and the possibility of another rate increase in the coming months, significant improvements are not expected in the next three to four quarters. However, active buyers are finding themselves empowered to take advantage of this situation by negotiating favourable terms and deals.
32
RPM Q3 2023 Victorian Greenfield Market Report
33
Bendigo The first half of 2022 saw triple-digit sales followed by quarter-on-quarter falls to a low of only 29 sales in Q2 2023. Q3 showed a modest improvement with 34 sales but this is still a 51% drop from the same quarter last year. In fact, this is the secondlowest sales quarter since Q1 2015. The 35 cancellations this quarter are a concern, making it the highest number on record and contributing to a stock
stock may be the start of an elevated level over the next 12
34
to 18 months.
Gross Lot Sales
overhang of 218 lot, a level not seen since Q1 2020. This is despite minimal stock releases of just 13 lots; the return of
On a positive note, 59% of sales occurred in the north, 26% in the west, and 12% in the east – a welcome diversification compared to the north’s usual 89%-90% share. This diversity
+17%
A slight pick up took place in the quarter, but remains well below the long term average.
of stock across all areas will assist the region moving forward. Despite the low sales activity, prices saw a modest 1% gain (+$2,000), reaching a total of $277,500. This reflects a 4.5% increase (+$11,500) compared to the same quarter last year. The median lot size grew significantly by 29% (142sqm) to
630sqm
+29%
Median Lot Size
630sqm. This increase is attributed to sales in the east and west, where the lot medians were 738sqm and 685sqm,
A substantial increase of 142sqm from Q2.
respectively. However, the price per square metre rate fell by 22% (-$124) to 4440.
than the stock sold, priced at $292,750, which is $15,250
218
above the sold stock. The stock overhang also had a larger
Stock at End of The Quarter
Furthermore, the stock overhang for Q3 had a higher median
+6%
median size of 641sqm – approximately 11sqm more than sold stock.
Stock rose on the back of a increase in cancellations.
$277,500
+1%
Median Lot Price A modest increase over the quarter, but well below the price of stock overhang at $292,750.
34
RPM Q3 2023 Victorian Greenfield Market Report
Buyer Activity - Bendigo GROSS LOT SALES
300 250 200 150 100 50 0 Sep-20 Dec-20 Mar-21 North Region
East Region
Jun-21
Sep-21
South Region
Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
West Region
Source: RPM Research, Data & Insights
Stock Overhang - Bendigo LOTS REMAINING AT END OF QUARTER
250 200 150 100 50 0 Sep-20 Dec-20 Mar-21
Jun-21
Sep-21
Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Source: RPM Research, Data & Insights
Active Estates - Bendigo NUMBER
25 20 15 10 5 0 Sep-20 Dec-20 Mar-21
Jun-21
Sep-21
Dec-21 Mar-22
Jun-22
Sep-22 Dec-22 Mar-23
Jun-23
Sep-23
Source: RPM Research, Data & Insights
Median Lot Price and Size (sqm) - Bendigo MEDIAN LOT PRICE
MEDIAN LOT SIZE
$300,000
700 600 500 400 300 200 100 0
$250,000 $200,000 $150,000 $100,000 $50,000 $0 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Median Lot Size
Median Lot Price
Source: RPM Research, Data & Insights
35
Bendigo Outlook Looking ahead, considering the potential for another rate rise and an extended period of high interest rates, we anticipate muted sales activity over the next 12 months, especially if prices remain high. Bendigo has not witnessed the same level of discreet discounts as other regions, like Metropolitan Melbourne. There might be a shift leading up to Christmas, but Bendigo developments appear more focused on working through construction backlogs and settling past sales. The availability of stock in regions outside of the north should boost buyer activity, with different stock types attracting a wider range of households. The west offers more value for money with larger lifestyle lots at lower price per square metre, while the east provides product variation with premium lots and higher price points, catering to second or third homebuyers.
36
RPM Q3 2023 Victorian Greenfield Market Report
37
Townhomes are the Ideal Alternative to Traditional Detached Houses Despite reduced purchasing capacity and borrowing power, townhomes remain an attainable option for many buyers. Despite robust headwinds, some market-specific conditions
benefits price-conscious owner occupier first home buyers
have retained a solid foundation for residential property
and local key workers, but also supports investor activity –
prices. The limited availability of established housing stock has
which is vital to increasing supply in the tight rental market.
bolstered buyer competition, keeping prices stable despite the cash rate increases. This stability was further reinforced by
Meeting the diverse lifestyle needs of a wide range of buyers
the gradual easing of the cash rate hikes in 2023, following its
not only supports the genuine delivery of townhomes but also
rapid rise in 2022.
contributes to the much-needed supply across the housing market, helping to address current housing challenges.
While the cash rate appears to have stabilised (with strong potential for a further 25 basis point increase), the aggressive
The aggressive cash rate increases have significantly reduced
uplift means that residential property prices have not had
borrowing capacity from its Covid-highs. At the same time,
an opportunity to meaningfully soften. Instead, they have
the broader availability of established market stock and
continued to strengthen after the initial fall in 2022.
construction costs have underpinned robust prices in both established and new dwelling options.
The broader conditions indicate that established house price growth is expected to continue into 2024 and 2025. However,
The table to the right demonstrates this impact on borrowing
there remains some uncertainty in the market, for instance,
capacity, highlighting the importance of affordable
regarding the potential increase in selling from investors in the
housing options across the metropolitan, greenfield,
established house market. This uncertainty is further amplified
and regional markets.
by questions about the future cash rate trajectory and the impact of global conditions on cash rates. Given this current landscape, the market must offer a diverse range of dwellings; ranging in types, sizes, and price points to cater to the needs of local, regional, and national buyers. Affordable options, like townhomes and small lot housing products, are gaining prominence as they offer a more attainable price point and demand less sacrifices on houselike amenities, while satisfying the key preferences of owner
• Cash rate sits at 4.1% (October 2023) • Cash rate has risen 400 basis points from historic low of 0.1% in April 2022, and 150 basis points from October 2022 • Cash rates notionally expected to have peaked with some potential for an additional 25 basis points if necessary
occupiers and investors alike.
• Inflation has peaked but remains elevated
A townhome’s more attainable price point can come complete
• Overseas monetary policies may impact the eventual
with separately titled lots, generous internal space, secure off-street parking, and reduced or no strata fees. This not only
38
RPM Q3 2023 Victorian Greenfield Market Report
cash rate pathway adopted by the RBA.
Spotlight on Buying Power and Affordable Option $150,000 household income
$120,000 household income
Just below moderate income band for affordable housing for couples with two children at June 2023
Bottom end of the moderate income band at June 2023
Borrowing capacity* October 2022
October 2023
October 2022
October 2023
$692,600
$603,900
$397,200
$346,300
Reduction: $88,700 (-12.8%)
Reduction: $50,900 (-12.8%)
*T his considers a household with average expenditures as defined by the Household Expenditure Survey (HEM).
39
Total Townhome Stock 2021
WHITTLESEA HUME
NILLUMBIK
MELTON
MORELAND BANYULE MOONEE BRIMBANK VALLEY DAREBIN MANNINGHAM YARRA MARIBYRNONG BOROONDARA MAROONDAH MELBOURNE WHITEHORSE STONNINGTON KNOX HOBSONS GLEN MONASH WYNDHAM BAY EIRA
YARRA RANGES
BAYSIDE
GREATER DANDENONG
GREATER GEELONG
KINGSTON CASEY FRANKSTON
CARDINIA
QUEENSCLIFF MORNINGTON PENINSULA
Total Count 24 - 632 633 - 2212 2213 - 5289 5290 - 11429 11430 - 18631
The current state of townhomes and changing nature of stock across Victoria The following outlines some key considerations related to
This analysis highlights the average nominal median price
the count and geographic distribution of townhomes in
spread and premium between houses and units through the
Victoria, along with the recent net changes in supply observed
five years to 2021 to showcase some of the underlying market
between the 2016 and 2021 Censuses.
fundamentals driving these shifts.
This LGA-level analysis showcases the count of townhome
It’s important to note that the 2021 Census introduced a
stock categorised by bedroom type, with special
revised definition of townhomes which selectively impacts
consideration for greenfield LGAs and selected regional
the expressed net change when comparing the two Census
markets. It also assesses the net change in townhome supply
years. In 2016, dwellings were classified as townhomes if
over the five years to 2021 (the analysis period for change),
they were separated by 0.5 metres or less along the side
focusing on markets with the most significant net changes, as
boundaries. However, in 2021, the definition was updated to
well as greenfield and select regional LGAs.
include only attached dwellings, eliminating the 0.5-metre separation criterion. This change is particularly significant in the greenfield LGA market, given the evolving form and delivery of homes on more compact lots in recent times across these markets.
40
RPM Q3 2023 Victorian Greenfield Market Report
1 Br
2 Br
3 Br
4+ Br
Avg Nominal Price Premium (2016-2021)
Avg Premium (2016-2021)
39
993
10,058
6,559
982
$362,848
64%
25
1,761
8,639
4,910
719
$469,400
82%
15,491
19
734
6,702
6,659
1,377
$381,000
60%
Yarra
15,227
31
828
6,469
6,072
1,827
$769,810
122%
Top 15
Total Stock
Studio
Moreland
18,631
Darebin
16,054
Kingston (Vic.) Whitehorse
15,063
40
792
6,132
6,289
1,810
$523,820
77%
Glen Eira
13,728
34
420
5,426
5,897
1,951
$838,200
128%
Boroondara
12,508
21
342
4,660
5,733
1,752
$1,427,980
193%
Port Phillip
11,429
38
582
3,828
5,373
1,608
$1,154,200
186%
Greater Geelong
10,768
55
1,891
5,513
2,727
582
$152,550
35%
Monash
10,477
10
275
3,071
4,572
2,549
$480,578
65%
Moonee Valley
10,126
16
367
3,553
4,783
1,407
$529,600
94% 34%
Casey
9,850
18
341
3,126
4,356
2,009
$154,600
Greater Dandenong
9,031
18
743
4,752
2,919
599
$245,800
54%
Frankston
8,981
27
727
4,640
3,189
398
$181,350
38%
Stonnington
8,949
7
348
3,534
4,090
970
$1,475,650
223%
Greenfield Brimbank
8,807
18
250
2,645
4,684
1,210
$182,530
40%
Cardinia
2,982
8
59
1,508
1,170
237
$155,500
38%
Casey
9,850
18
341
3,126
4,356
2,009
$154,600
34%
Hume
6,738
12
274
2,669
3,217
566
$150,300
36%
Melton
4,293
-
215
1,301
2,189
588
$145,240
37%
Mitchell
1,076
4
117
549
358
48
$145,300
42% 23%
Nillumbik
729
7
45
265
345
67
$156,450
Whittlesea
8,060
9
200
2,973
3,683
1,195
$180,290
41%
Wyndham
8,326
8
151
2,184
3,974
2,009
$156,450
38%
Ballarat
5,289
15
818
2,446
1,636
374
$125,660
42%
Baw Baw
882
-
84
565
214
19
$140,575
41%
Greater Bendigo
3,264
12
486
1,908
768
90
$110,700
37%
Greater Geelong
Regional
10,768
55
1,891
5,513
2,727
582
$152,550
35%
Surf Coast
772
-
35
254
408
75
$236,240
35%
Latrobe (Vic.)
1,775
32
430
1,030
250
33
$89,900
47%
Source: ABS, RPM Research, Data & Insights
The primary count of townhome stock is located within
Several other greenfield LGAs have relatively similar counts of
the Moreland and Darebin LGAs, accounting for 34,700
townhomes, including Brimbank, Whittlesea, and Wyndham;
townhomes as of 2021. Of these, 54% feature two-bedrooms
each recording between 8,000 to 9,000 townhomes. These
while 33% have three-bedrooms. Across the next tier,
markets share similar nominal and proportional price premiums
Kingston, Yarra and Whitehorse LGAs recorded between
between houses and units, creating a solid environment for the
15,000 and 15,500 townhomes. These markets exhibit a
success of townhomes. These LGAs also have a collection of
more balanced distribution, with approximately 42% of two-
suburbs attached to the established development front.
bedroom and three-bedroom townhomes each, respectively. This trend is consistent across both greenfield and Within the greenfield markets, the Casey LGA stands out with
regional markets, highlighting broad similarities in market
the highest stock of townhomes, totaling 9,900, positioning
fundamentals. Offering more compact townhome options and
it among metropolitan Melbourne’s top 15 markets. The
a variety of similar dwelling types can attract a wider range of
Casey LGA also reflects a higher level of maturity in terms of
potential buyers, contributing to the appeal and growth of this
greenfield market pricing.
housing option.
41
Net Change in Townhome Stock 2016-2021
WHITTLESEA HUME
NILLUMBIK
MELTON
MORELAND BANYULE MOONEE BRIMBANK VALLEY DAREBIN MANNINGHAM YARRA MARIBYRNONG BOROONDARA MAROONDAH MELBOURNE WHITEHORSE STONNINGTON KNOX HOBSONS GLEN MONASH WYNDHAM BAY EIRA
YARRA RANGES
BAYSIDE
GREATER DANDENONG
GREATER GEELONG
KINGSTON CASEY FRANKSTON
CARDINIA
QUEENSCLIFF MORNINGTON PENINSULA
Net Change -811 - -170 -169 - 333 334 - 935 936 - 1723 1724 - 2837
The Moreland and Darebin LGAs experienced the most
of scale and volume that would otherwise be supported in
significant nominal net increase, in line with the larger size and
these markets. Many have moved beyond townhomes as the
more stabilised nature of these markets. The City of Casey
product of choice at scale and may be more supportive of
ranks third in terms of net growth in townhome stock. This
higher-density and apartment opportunities.
underscores how quickly townhome products have become integrated into the greenfield established housing market.
Interestingly, there was a net reduction in townhomes within the Melton, Whittlesea, and Wyndham LGAs. This highlights
Additional considerations centre on the count of net additional
the impact of the definitional change and the nature of
dwelling stock delivered in these markets. This includes
dwelling stock delivered in these areas. It also indicates a
assessing the nominal house prices and the role of affordability
transitional phase in the market, where detached but compact
in shaping the potential for development within each LGA,
and near-attached dwellings exist; suggesting a shift toward
especially in greenfield LGAs.
townhomes as the market matures.
This trend is more pronounced in established and higher-
Across the greenfield LGAs, there is a more pronounced
priced LGAs within Melbourne’s metropolitan boundary,
net addition of townhome stock being delivered through
where elevated house prices support a strong nominal and
the southeastern corridor, where supply opportunities are
proportional premium that reinforces pricing fundamentals.
comparatively limited and pricing pressures are highest. There is an emerging expression of supply through the northern and
Across many metropolitan markets, despite robust
western LGAs, with some of these markets being impacted by
fundamentals, the established urban frameworks, planning
the change in townhome definition noted previously.
constraints and residents’ acceptance may limit the delivery
42
RPM Q3 2023 Victorian Greenfield Market Report
Top 15
Net Change
Studio
1 Br
2 Br
3 Br
4+ Br
Avg Nominal Price Premium (2016-2021)
Avg Premium (2016-2021)
Moreland
2,837
-14
140
1,483
1,057
171
$362,848
64%
Darebin
2,101
-19
123
1,301
623
73
$469,400
82%
Casey
1,723
-
64
400
843
416
$154,600
34%
Knox
1,540
-
76
617
605
242
$220,530
36%
Greater Geelong
1,482
8
267
795
261
151
$152,550
35%
Mornington Peninsula
1,335
8
83
659
458
127
$310,410
53%
Whitehorse
1,322
12
35
260
532
483
$523,820
77%
Yarra
1,304
9
207
252
558
278
$769,810
122%
Kingston (Vic.)
1,292
-14
30
526
538
212
$381,000
60% 128%
Glen Eira
1,250
1
-36
304
505
476
$838,200
Greater Dandenong
1,231
-13
80
532
483
149
$245,800
54%
Moonee Valley
1,215
1
4
388
437
385
$529,600
94%
Hume
1,108
-9
25
532
456
104
$150,300
36%
Manningham
1,105
-1
33
227
294
552
$616,410
88%
$480,578
65%
Monash
1,036
-11
-63
97
156
857
Total
21,881
-42
1,068
8,373
7,806
4,676
Brimbank
984
-1
21
331
469
164
$182,530
40%
Cardinia
702
8
-15
608
116
-15
$155,500
38%
Casey
1,723
-
64
400
843
416
$154,600
34% 36%
Greenfield
Hume
1,108
-9
25
532
456
104
$150,300
Melton
-231
-15
79
136
-188
-243
$145,240
37%
Mitchell
639
-
67
343
189
40
$145,300
42%
Nillumbik
63
-1
-22
23
54
9
$156,450
23%
Whittlesea
65
-8
28
602
-268
-289
$180,290
41%
$156,450
38%
Wyndham Total
-811
-8
-7
2
-353
-445
4,242
-34
240
2,977
1,318
-259
Regional Ballarat
31
3
94
282
-159
-189
$125,660
42%
Baw Baw
251
-3
-2
175
74
7
$140,575
41%
Greater Bendigo
149
-9
20
119
11
8
$110,700
37%
Greater Geelong
1,482
8
267
795
261
151
$152,550
35%
Surf Coast
184
-
16
51
95
22
$236,240
35%
Latrobe (Vic.)
132
-
14
95
15
8
$89,900
47%
2,229
-1
409
1,517
297
7
Total
Source: ABS, RPM Research, Data & Insights
A noteworthy trend is the expression of three and four
of apartments in the market has diminished the need for
bedroom townhomes, catering to the growing demand for
townhomes to serve solely as units for the price-conscious
house-like products suitable for families, reducing reliance on
or investor, with higher nominal pricing and price sensitivity
more expensive traditional detached homes. In addition, an
fostering the acceptance of townhomes as the ideal, low-
increase in four-bedroom townhomes indicates an opportunity
compromise alternative to traditional detached houses.
to design townhomes for families, which require similar internal area to a traditional detached home but are more price sensitive with some purchasers content to compromise on land area to access the market.
Luke Kelly
The rise in larger townhomes underscores the evolving role
National Managing Director
of townhomes as house-like products, particularly when
Project Marketing
compared to apartments or units. The greater prevalence
43
Outlook Despite facing significant challenges and barriers, the allure of a new greenfield home persists. Total lot sales are anticipated to contract further over the
Analysis of the secondary land market reveals that a 350sqm
next two quarters, influenced by the seasonal impact of the
lot is priced 5%-10% lower than the same product on an estate
holiday period. New home demand is expected to also remain
pricelist. The growing availability of vacant lots for resale
fragile throughout 2023 and into 2024, in response to ongoing
underscores the ongoing need for rebates and discounts to
volatility in the Victorian property market and the broader
bridge the price gap and prevent new home demand from
economy eroding confidence and sentiment.
leaking into the secondary market.
Consequently, 2023’s monthly momentum swings in growth
Despite facing significant challenges and barriers, the allure
areas’ sales activity are projected to continue as overall
of a new greenfield home persists, partly stemming from
affordability remains constrained. Borrowing capacity is
the shift in purchaser demand in the post-pandemic period.
unlikely to improve as the RBA maintains a tightening bias on
Affordability remains the primary drawcard for the greenfield
interest rates. Recent developments on the inflation front are
market, with well-priced vacant lots experiencing solid sales
strengthening the case for further cash rate rises, as strong
rates among key buyer demographics in 2023.
population growth and a robust job market apply upward pressure to costs for goods and services. Concerns over economic shocks and global conflicts affecting overseas supply chains are also contributing to inflation worries.
Michael Staedler
Relative affordability in the new home market is unfavourable
General Manager
compared to other property segments, all vying for a limited
Research, Data & Insights
pool of potential buyers. Although Melbourne’s median house price decreased over Q3, to now sit 17% below its previous peak. This is in contrast to the record Melbourne median lot price of $389,000, resulting in a land-to-house price ratio of 42%, exceeding the long-term ratio of 35%.
44
RPM Q3 2023 Victorian Greenfield Market Report
45
Our Team Get in touch with our team
Gary Dunne
Luke Kelly
Chief Executive Officer
National Managing Director
gary@rpmgrp.com.au
Project Marketing luke@rpmgrp.com.au
46
Rod Anderson
Peter Grant
National Managing Director
National Managing Director
Communities
Business Development
rod@rpmgrp.com.au
peter@rpmgrp.com.au
Ed Wright
Michael Staedler
National Director and Head of
General Manager
Transactions & Advisory
Research, Data & Insights
edwright@rpmgrp.com.au
m.staedler@rpmgrp.com.au
Imogene Schaefer
Jane Ormerod
General Manager
Head of
Marketing
Property Management
imogene@rpmgrp.com.au
jane@rpmgrp.com.au
RPM Q3 2023 Victorian Greenfield Market Report
Unlocking Australia's Property Landscape
Disclaimer Although all reasonable care has been taken in the preparation of this document, RPM Group takes no responsibility for the accuracy of the information contained herein. It is recommended that all the information be verified if it is to be used for commercial purposes.
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