Written by- Kane Malcomson
In a year full of uncertainty from the pandemic, Victoria’s greenfield development land market outperformed all expectations throughout 2021, comfortably becoming the hottest year for greenfield transactions on record. Fiscal stimulus, pent-up demand for land, and record low interest rates lead to significant developer investment across Victoria’s metropolitan and regional residential and industrial greenfield markets, with all markets seeing $$$ per hectare increases across the 12 months.
Regional greenfield markets saw a huge surge in capital allocation, with the Bellarine Peninsula & Surf Coast, Geelong, the Mornington Peninsula, Ballarat, and the Warragul/Drouin markets all seeing significant growth and performing strongly. A strong jump across our regional markets did not dampen growth and investment within Melbourne’s metropolitan markets, with all growth corridors seeing extraordinary price growth, spurred on by the historically high levels of residential lot sales and prices.
Australian-based developers continue to secure the majority of sites to be transacted, which is a significant shift from the previous market peak which was led by an influx of Chinese-based and backed development groups securing sites.
Throughout 2021, we did see a notable shift in the market on the types of Australian-based developers securing land in Victoria, with groups traditionally based in NSW entering the Victorian market aggressively. A significant land shortage in NSW will continue to push NSW-based development groups to new markets, with most favouring Victorian and South-east Queensland greenfield markets.
We expect market conditions across Victoria’s metro and regional greenfield corridors to remain strong throughout 2022, with families and investors continuing to look away from Melbourne’s CBD and inner-city markets and towards our greenfield and regional markets. The ‘work-from-home phenomenon’ will continue, and with it, buyers will look for homes with more space in areas that provide a better work/life balance.
Our Core Land team transacted land across all regions of Melbourne’s greenfield land market in 2021, completing an industry-leading 39 transactions with a total value of more than $1.2billion in sales.