Get the lay of the land. The Greenfield wrap-up on the year that was.

In June 2022 there were 1,312 lot sales recorded across Melbourne and Geelong more than 50% below the average we saw in the back half of 2021

After-sales volumes fell significantly through the early part of 2022, the market has stabilised with June’s sales figure just 3% below that recorded in May.

Rising interest rates coupled with record lot price growth and increasing build costs have seen affordability constraints significantly impact the first home buyer segment of the market, as a result, smaller lot product is becoming more appealing to this buyer type.

Smaller lot product is increasing in popularity as the proportion of lots sold with a depth of 25 metres increased across Q2 2022 whilst the proportion of lot sold with depths of 28 and 32 metres decreased.

— Grant Neilson, Greenfield Specialist

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Sales Volumes

In Q2 2022 there were 4,266 lot sales recorded across Melbourne and Geelong. This represents an 18% decrease from the 5,206 lot sales recorded in Q1 2022 and a 50% decrease from the market peak in Q2 2021 when 8,535 lot sales were recorded.

The recent fall in sales volumes has been driven by a combination of supply side factors, with many developers releasing fewer lots to market in conjunction with affordability constraints impacting some purchasers. Rising interest rates coupled with record lot price growth and increasing build costs has created a noticeable demand reduction.

When compared against historical levels the 2,463 lots available on market to be purchased at the end of Q2 2022 is well below the 4,683 lots available on market at the end of Q4 2020.

Sales Over Time – A Regional Breakdown

In Q2 2022 the North Region significantly increased its market share to account for 30% of total sales across Melbourne and Geelong. This is the largest market share the North region has recorded over recent years, significantly up from its previous high of 25% in Q1 2021.

Largely driven by supply constraints, the South East and Greater Geelong regions recorded a significant reduction in their market share. In Q2 2022 the South East region accounted for just 16% of total sales whilst the Greater Geelong region accounted for just 11% of total sales.

Supply over Time – Melbourne & Geelong

The number of available allotments increased by 6% this month, a small increase compared to May when an increase of approximately 36% was recorded. This was the third consecutive month in which the number of lots available increased.

Months supply increased slightly to 1.9 with month on month increases stabilising in June. Months supply hasn’t been this high since January 2021. Upon the 3rd month of the market swing, titled lots have shown their first sign of increase since mid 2020.

New Lots Supply vs. Gross Sales

Lot Depth Comparison