Metropolitan Melbourne's median land price heading towards 2018 peak: Red23

Metropolitan Melbourne's median land price increased by 1% in September to $337,000, up 5% annually, according to Red23, one of the country's leading land sales agencies.

"This is back to the same median land price achieved in early 2019, but has not reached the peak of $349,000 witnessed in September 2018," said Terry Portelli, the founder and managing director of Red23.

The latest report noted the median land size continues to decrease, down 0.26% to 387sqm, less than the 400sqm median land size three years ago.

Portelli reckons APRA’s increase in the minimum interest rate buffer will have little effect in the short term on the demand for housing in the greenfield areas as demand in these regions remains strong. 

"But it will have a negative effect on first home buyers who are already on the backfoot because of swift price increases."

In September land sold in the Melbourne growth areas have taken approximately 1.5 months to sell from the time it is released to the market; in comparison to 2.6 months in June.

Wyndham sold over 1,200 lots in the third quarter, which is double of the same time last year. 

Melton sold close to 1,000 lots in the third quarter, same as 12 months ago. 

Casey achieved a similar number to Melton.

In Metropolitan Melbourne, over 4,700 lots were sold in the third quarter, similar numbers to quarter two but and down 990 lots on the first quarter.

The Red23 report noted demand for land remains strong, but stock availability continues to be tight, at record lows of approximately 1,000 lots available at any given time.

Greater Geelong has already sold over 2,000 land lots which is 400 more than the total number sold in 2020.

Regional and semi regional areas remain strong as indicated by the price growth in areas such as Greater Geelong and Mitchell.

Greater Geelong is the biggest mover this month, up 12% to a median land price of $351,000 and an increase of 23% YoY.