Why are land prices creating an optimistic 2021 Victorian market?
The HomeBuilder Grant together with increased buyer confidence, record levels of savings and affordable land prices has encouraged an optimistic 2021 in Victoria, according to Red23’s managing director Terry Portelli.
Price growth remains at a minimal level, with the median land price stable at $322,000, increasing 0.31% during the last quarter of 2020 however down 0.62% year on year.
Median land price increases were seen across 5 of the 7 metro growth area municipalities as well as Greater Geelong with above 3% increases witnessed in Casey, Whittlesea, Greater Geelong and Mitchell.
Casey has continued to be the price leader, pushing their median land price over $360,000.
Uncertainty arising from the Covid-19 pandemic and employment security meant the Victorian new homes sector suffered a push back in 2020, but adjusted by developing online selling environments, Portelli advised.
“The second half of 2020 exceeded expectations due to the HomeBuilder Grant albeit impacted by limited international travel, population growth and migration,” he said, noting in metro Melbourne, nearly 15,000 land sales were made in 2020, doubling that of 2019.
The largest increases by municipality were Whittlesea (+129%), Melton (+123%) and Mitchell (+82%) while all other municipalities also increased by between 21% to 60%.
Red23 pointed out the HomeBuilder Grant proved successful in driving demand for new homes, with the Treasury figures showing Victoria accounted for 21,959 of the 75,000 applications.
“Titled lots available are now diminishing,” he advised.
Home buyers can now spend up to $850,000 on a home and receive the $15,000 HomeBuilder Grant when purchasing between January 1 and March 31, 2021 on condition that their income does not exceed $125,000 as an individual, or $200,000 as a couple.
“Land prices remain at their most affordable since early 2018.
“We have seen a reduction in the number of incentives and rebates being offered by developers,” he noted.
