- Melbourne’s median land price has topped $267,000, MoM increase of $9,000 or around $12 per hour.
- Median land price has increased by $27,100 since January 2017.
- The City of Casey with a median land price of $339,000 is the most expensive growth area municipality.
- The dollar per square meter rate has swelled by 37 per cent over the last 5 years, with Cardinia increasing by an astonishing 79 per cent over the same time frame.
- Victorian population growth underpins an underlying requirement up to 24,000 growth area dwellings.
Unfortunately, or fortunately, depending on which side of the ledger you sit on, the theme of this note is somewhat similar to last month, and the month before and the month before with another substantial increase in the median land price.
The median land price rose by $9,000 during April to $267,000. This equates to an increase of around $300 per day over the last 30 days or around $12 per hour.
Since January, land prices have risen by almost $30,000 or approximately 11 per cent (almost tripling Melbourne house price growth over the same time frame). Year on year, that’s an increase around $1,000 per week.
It’s debatable, but at the rate of growth experienced since January, the median land price could reach $300,000 in the third quarter of this year.
Despite the median land price trending north, sales volume remains buoyant across all growth corridors – double digit monthly sales rates are the norm.
Deliverability now becomes one of the biggest industry challenges, with some developers lifting prices to temper sales rates. Titles in some instances are now more than 18 months out.
As to be expected, strong sales rates are paralleled by dwelling approvals. Approvals hit record levels in 2010, at around 18,000 approvals. That record was exceeded in 2016.
Victorian population growth of around 127,500, underpins an underlying requirement of around 24,000 growth area dwellings over the near term (that’s around 9,000 more than the 10-year median and almost double the long run median); but deliverability remains the key.
Notably, State Government ‘Victoria in Future’ forecast household growth of around 16,000 per annum over the five years to 2021 in the seven growth area municipalities.
Casey remains the most expensive land market with a median of $339,000. It has grown by almost $2,000 per week over the last year.
Melton, the second most affordable market, has experienced the strongest percentage growth with year-on-year growth of 51 per cent. It’s median land price is $226,000, underpinned by activities in Plumpton and Rockbank.
This leaves Mitchell with the mantle of being the only municipality with a median below $200,000. The median land price in Mitchell has declined by 6 per cent over the last 12 months to $159,000 (-$11,000).
In other changes, Hume moves up to the third most expensive municipality, replacing Wyndham.
The median lot size has fallen from 420 to 414 square meters.
As to be expected, all municipalities have recorded growth in the dollar per square meter rate (from 7 to 79 per cent) over the last five years. Across all municipalities, the rate has grown by 37 per cent, from $470 to around $650 per square meter.
On a municipality basis, Cardinia has experienced the strongest growth in percentage terms (79 per cent to $675 per square meter). Casey with dollar per square meter growth of around 50 percent is the most expensive market (around $760 per square meter).
In the west, Melton’s rate is up by 46 per cent over the last five years to $565. In Wyndham, the rate rose by 26 per cent to $685.
Dollar per Square meter