Victoria’s land market outlook

George Bougias, Oliver Hume’s national head of research, identified these buyers as new market entrants and owner-occupiers planning to upgrade or downgrade their property.

“With Melbourne’s median house price now above $1 million – and affordability increasingly important – we continue to see growing interest in both metropolitan and regional greenfield land markets in key local government areas (LGAs),” Mr Bougias said.

Growth corridors

With a median lot price of just $304,750 for the November quarter, and easy access to Melbourne’s northern region, Mr Bougias has identified Mitchell Shire as one of the most affordable municipalities in Victoria.

He also reported on the available greenfield lots with median prices below $350,000, such as Hume ($337,000) and Whittlesea ($339,500) in the north, and Wyndham ($322,500) and Melton ($342,500) in the south.  

Geelong has also seen significant price growth from 11 per cent in the August quarter to 21.9 per cent in the November quarter with a $334,000 median lot price.

“Although local buyers from Geelong continue to underpin demand, purchasers from Melbourne are increasingly considering Geelong as an option given the fast-growing regional city’s value proposition and other competitive advantages,” Mr Bougias said.

The research head has also predicted Casey ($412,000) and Cardinia ($395,000) to remain attractive to a diverse pool of buyers despite slightly higher prices.

“These buyers include, especially, existing owner-occupiers in Melbourne’s south-east and eastern regions who have enjoyed healthy capital gains and are looking to utilise their equity,” he said.

Outlook for 2022

“In 2022, we expect the market’s positive momentum to continue buoyed, in part, by the resumption of international travel and interstate migration,” Mr Bougias opined.

The opening of borders opens the market to more potential buyers, he said, and can also snowball to higher buyer confidence as the economy and labour market improve.

Mr Bougias, however, acknowledged that price rises might slow down or even stagnate, depending on different existing and emerging factors.

Given a variety of reasons, including the pull-forward effect of recent market circumstances and fiscal and monetary support, he foresees sales volumes as likely to decline from recent highs.

Other factors that can affect prices and sales that he identified are affordability issues as well as stricter lending requirements.

Still, Mr Bougias highlighted the unique opportunities that can be found in the different markets brought about by various factors for the next phase of the property market boom.

He was pertaining to the federal government’s recently released 2021 Population Statement, which projected Melbourne as Australia’s “fastest-growing capital city from 2023-24 and should become Australia’s largest city in 2029-30”.

“Melbourne’s outlook, in particular, is underpinned by the city’s recovery from extended lockdowns and the opening of the economy. Although online platforms remain important, with COVID-19 seeing widespread adoption of technology, buyers are now able to inspect properties after many months of lockdowns,” Mr Bougias concluded.