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Land values in Australia’s second-largest city continue to show strong signs of recovery in the September quarter, with prices stabilising and volumes increasing, latest research has suggested.
According to figures released by property service group Oliver Hume, strong population growth and the performance of the Victorian economy was helping to spur on the market.
Oliver Hume national head of research George Bougias said the fundamentals of the Victorian land market continued to improve, with prices stabilising across key sub-markets and volumes recovering.
“Victoria continues to perform well across a range of indicators, including population growth, retail trade, employment and construction work done,” he said.
“Victoria’s relative economic and employment performance is an important driver of purchasers’ decision to re-enter the market and buy property either as owner-occupiers or investors,” Mr Bougias continued.
The report showed that land sales around Melbourne increased to an average of nearly 800 per month during the September quarter, compared with around 550 per month in the June quarter and below 500 per month in the March quarter.
“The stabilisation in prices is being driven by a range of factors, including an improvement in lending conditions, lower interest rates, improving underlying demand driven by continued robust population growth and greater confidence,” he said.
The median lot price for metropolitan Melbourne (gross prices, conventional lots) was $320,000 in the September quarter 2019, up 2.6 per cent over the quarter and up 0.6 per cent over the year.
While confidence is returning, developers continue to offer buyers incentives and rebates to secure sales.
These remain around $15,000 to $30,000 per lot, although higher incentives are on offer in some estates.
“Monthly sales remain well below the peaks observed during the boom, but buyer confidence is improving and volumes are now heading in the right direction,” Mr Bougias concluded.