Lot sales activity in the Western Growth Corridor has contracted by 45 per cent in the third quarter for 2022, according to new data.
RPM’s Quarterly Greenfield Market Report provides insight on the vacant land sector in Melton, Bacchus Marsh and Wyndham, from July to September.
The report indicated that the median lot value had decreased by 2.5 per cent in Melton, with the average lot setting land owners back $380,000.
RPM Managing Director Project Marketing, Luke Kelly, said buyers were showing a higher degree of cautiousness in the current financial climate.
“Buyers are facing a host of challenges, from increasing construction costs through to the rising cost of living, reducing borrowing power and higher mortgage repayments, which is causing them to delay their decision making,” Mr Kelly said.
“We think this will be a temporary state of affairs with signs construction costs are already levelling off and the cash rate predicted to peak mid next year.
“That presents an opportunity to buyers to get into the market now while the level of competition is less intense.”
The report also indicated there are now just 83 active estates in the Western Growth Corridor, the lowest number in three years.
Mr Kelly said the decreases in sales volume this quarter disguised the fact volumes remained well above peak pandemic levels.
“We’re seeing a normalisation or stabilisation in the market now, with sales falling back towards pre- pandemic levels,” he said.
“At the same time supply is keeping pace with demand, leading to a healthy absorption rate and enabling developers to catch their breath after a period of intense activity.”
Mr Kelly said interested buyers should retain a level of cautious optimism.
“While there are challenges in the market over the short-to-medium term, we believe it will bounce back strongly over the long term due to strong fundamentals such as population growth and government incentives,” he said.
