After the highest high we have seen in the history of land sales in Victoria. What goes up must come down and it was evident, as always, that the property market is cyclical as sales volumes went into free fall, coming off at a similar pace to which they rose at the beginning of the boom.
Enter FY 2023, the script was pre-written, it was a year of ‘battening down the hatches’, protect settlements, try to remember what strong sales rates used to feel like and wait it out. It felt different this time around, less panicked, better planning, more measured approaches were taken, it seemed as if the Greenfield market, had matured and learnt from the mistakes of the past. I guess we didn’t see too many 1k total deposits this time around….
Although sales volumes were below historical averages for the entirety of the financial year, the numbers became very stable, with an average just below 700 a month. The final quarter ending on a positive note with a slight increase in sales recorded, the first improved quarter since declines began. The upcoming September quarter will be confirmation for the industry if this is a trend.
New releases have continued to occur during a subdued market (albeit less of them) which has amplified available stock counts. The fin year 2023 kicked off with 45 titled blocks on developers price lists – we finished in June with 501. This increased supply across the board has led to incentives in the market which in turn creates pricing pressure. We expect this tension point to continue to accumulate until most peak pricing allotments are settled.
With migration ticking along, and mixed messages on where & when further land supply is coming – Fundamentally, the Greenfield market sits in a very strong position. Stock lists might be bursting at the seams currently; however it only takes a couple of strong months (after 1 interest rate decrease) and all of a sudden we are undersupplied and once again affordability is pressure tested. Our hope is that enough land is released to create a balanced supply/competition which allows for a well-functioning ecosystem between developer, builder, and families