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Core Research | 2023 Wrap Up

  • Date 13.12.2023
A Year in Review: Sales and Trends

Throughout 2023, the Melbourne and Greater Geelong region has seen total monthly sales fluctuate between 537 and 706, averaging 622. This period marked the lowest lot sales since the post-GFC era, a trend reflecting a significant shift in the market dynamics.

 

Regional Divergence in Sales Rates

Sales rates exhibited notable regional variations. On average, we saw 4-5 sales per project per month across Melbourne & Geelong. However the North corridor often experienced 6-7 sales per project per month, while Geelong recorded the lowest with averages in the low 2s.

 

Price Growth and Market Shifts

Since 2020, there has been a substantial price growth disparity among regions. Greater Geelong, for instance, saw a 57% increase in the commonly sold 350m2 lot ($240,000 to $380,000), while the North experienced a modest 23% growth ($297,000 to $366,000). This means that Geelong has shifted its pricing relativity with the other regions, and overtaken the North in price. It also highlights a potential determining factor in the varying sales rates around Melbourne & Geelong. Despite softer conditions across the market buyers have shown they are still willing to participate in areas where they perceive there is good value for money.

 

Market Conditions: Prices and Lot Sizes

Despite a stable median list pricing in 2023, the market witnessed a significant presence of incentives and rebates, leading to an average above the line discount of around $10,000. Additionally, the demand for smaller, more affordable lots has risen, with the average sold lot size reducing from 392m2 in early 2022 to 350m2 by the end of 2023.

 

Looking Ahead: 2024 Predictions

As we move towards 2024, the increasing supply of titled lots, nearing 1,000 in Melbourne & Geelong, suggests a potential shift in market strategies. Developers are likely to create compelling ‘reasons to buy’ in the hope to clear their stocklists, which will in turn start to put downwards pressure on price.

 

Summary: Past, Present, and Future

The past few years have seen a significant price growth of 20-60% in most regions. With approximately 7,500 annual sales in 2023, the market is poised for an interesting phase in 2024, marked by an increase in titled lots and downward pressure on pricing.