National Residential Greenfield and Apartment Market Study
It’s important to note this report was prepared prior to the COVID-19 outbreak and market conditions have changed dramatically in the past month and will continue to change in coming weeks and months. Still, the following information will be a good resource to help you measure the impact of the coronavirus on the market.
State of the Land: Key Points for Victoria
- Prior to the coronavirus pandemic, the median dwelling value in Melbourne was almost 4 times the median household income (ratio 7:2). This means the number of years required to save a 20% deposit has increased to 9.6 years in Melbourne, up from 8.1 years in 2014.
- After two years of unsustainable price growth, Melbourne’s greenfield market saw the median lot price contract by 2.6% in 2019. The reduction in median pricing helped drive a modest 1.6% improvement in land rates to $837 per square metre. However, this still reflects an 84% increase on 2014 rates.
- Apartment sales activity in Melbourne started to recover after two years of negative growth, with new apartment sales rebounding 26% between June and November 2019. Construction activity showed signs of improvement with a 9% annual increase in the number of new apartments completed across Greater Melbourne in 2019.
- Estimates show a concerning forward supply of apartments in Melbourne with the total active pipeline numbers down 20% from 2018. Contributing factors are a decline in the number of units under construction (down 13%), approved units yet to start construction (down 22%) and units in early planning (down 23%).
- Prior to COVID-19 outbreak, ongoing population and employment growth looked set to provide strong underlying demand. UDIA will monitor and communicate the effect of recent events as soon as we can.