Land sales figures in Melbourne’s north have dropped 11 per cent in the last quarter.
A report from RPM Research outlines that potential homebuyers in Hume and Whittlesea are struggling to buy with reduced borrowing capacity and an increased cost of living.
The 11 per cent decline was almost double that recorded across the broader Melbourne and Geelong growth areas, where sales fell six per cent.
RPM national managing director project marketing Luke Kelly said while sales had fallen, there were positive take-outs from the quarter.
“The northern corridor’s share of total sales across the corridors remains elevated compared to the long-term average and that’s because of its affordability,” he said said.
“Owner occupiers made up a healthy 71 per cent of buyers in the north, with just over half of these first-home buyers.
“The north also had the lowest average time on market of all corridors at 109 days, which has led to lot absorption continuing to outpace new supply.
“Developers are also offering five to 10 per cent incentives off the headline price of lots which should help spur demand.”
The latest quarterly report from RPM shows sales across the Melbourne and Geelong growth corridors fell by 58 per cent to 8129 lots over the 12 months to September 2023.
The decline comes after sales rose 13 per cent in the second quarter to 2146 lots, fuelling hopes of the start of a recovery.
Mr Kelly said the fluctuation was due to a multitude of challenges facing buyers including affordability, a reduction in borrowing capacity, and the rising cost of living, and said he doesn’t expect a great rise in the near future.
“It appears the June quarter may have been an aberration and not a sign of an upward trajectory, although in good news, while sales were down in quarter three compared to the previous quarter they remain above the first quarter of the year,” he said.
“Pressure on demand remains strong, however, due to persistent inflation and the latest increase to the cash rate this month, the market looks like it will remain subdued for some time.”
