- Interest is growing across key greenfield markets in Melbourne's growth corridors
- Mitchell Shire has median land prices just over $300K
- New phase of cycle for greenfield areas expected despite pandemic disruptions
A solid 2022 for the Victorian greenfield residential land market is expected, according to property services group Oliver Hume.
George Bougias, Oliver Hume’s national head of research, said metropolitan and regional growth area markets, where land prices are well below the Melbourne average, would appeal to both those entering the market and existing owner-occupiers looking to upgrade or downgrade.
“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.
“The Mitchell Shire is one of the most affordable municipalities and has several advantages including easy access to Melbourne’s northern region. Median land prices are just over $300,000.”
In the three months to November 2021, the Hume and Whittlesea LGAs in Melbourne’s north and Wyndham and Melton LGAs in Melbourne’s west continue to see robust price growth, while median prices remain below $350,000.
Greater Geelong continues to see an increase in demand, thanks to a shift to the regions and professionals working from home.
“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.
“Although prices are higher in the south-east growth corridor municipalities of Casey and Cardinia, these markets are also expected to see demand from a range of buyers.
“These buyers include, especially, existing owner-occupiers in Melbourne’s south-east and eastern regions who have enjoyed healthy capital gains and looking to utilise their equity.”
New phase of cycle to begin
Mr Bougias said it is likely that despite recent disruptions, the market’s positive momentum will continue due to the resumption of international travel and interstate migration.
“Higher population flows should see a greater pool of potential buyers,” he said.
“The continued economic recovery and improving labour market will also be key to supporting buyer confidence. However, various current and emerging trends suggest price growth might moderate or, possibly, plateau.
“Sales volumes are also likely to moderate from recent peaks given various factors, including the pull-forward effect of recent market conditions and fiscal and monetary support.”
He noted that individual markets have their own unique circumstances.
Melbourne, he said, is underpinned by the city’s recovery from extended lockdowns throughout both 2020 and 2021.
“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,” said Mr Bougias.
On top of this, Melbourne’s population growth is expected to reach 5.9 million in 2029-30, making the Victorian capital once again the largest city in Australia.
Other greenfield markets nationally are also expected to boom this year.
“South-East Queensland will continue to welcome many more interstate migrants, continuing trends observed before COVID-19,” he said.
“Markets in regional areas and smaller capital cities, for example Adelaide, are arguably at the beginning of a new phase of their growth with many potential buyers increasingly aware of their outstanding lifestyle and value propositions.”
Median Greenfield Lot Price ($)
|Metro Melbourne (Conventional)||$350,000||7.7%||11.3%||$25,050||$35,500|
|Metro Melbourne (All Lots)||$349,000||7.4%||10.7%||$24,000||$33,800|
|Median (All of Victoria)||$343,000||9.2%||12.5%||$29,000||$38,000|
Supplied: Olvier Hume.