Beyond COVID: Big changes ahead for Victorian land market

According to the report, Melbourne’s median lot price reached a new high of $355,000, while key growth corridors in the Melbourne and Geelong residential markets hit a record-high median land price of over $300,000.

The report has also identified the top three municipalities in terms of median land price gains, with Cardinia landing on top of the heap with a 23.2 per cent growth in values over the year resulting in a $429,900 median land price.

Casey came in second as it saw 20.5 per cent gains compared to the same period last year and closed the December quarter with a median price of $418,000.

Melton placed third among the municipalities with a median land price of $347,500 to end the year.

Julian Coppini, chief executive of Oliver Hume, has said the strong conclusion to 2021 underlined the continued strong buyer confidence in Victoria’s greenfield land markets – and he’s looking optimistically towards 2022.

“Although 2022 is likely to be one of consolidation, as the market faces both headwinds and tailwinds, we remain positive overall about the outlook as the economy improves and borders reopen,” he said.

New stocks and affordability issues have already caused sales to ease, but the market’s still managed price growth over the past year.

For example, the City of Geelong experienced the fastest yearly price gain, with the median price rising 23.6 per cent to $339,900 in the year to December quarter 2021, according to the report.

Mr Coppini said that continuing price growth is supported by “record low interest rates and positive sentiment towards the property sector in general”.

Additionally, demand for both metropolitan and regional markets is still on the rise, but buyer appetite is stronger for the latter.

“We expect regional property will remain highly sought after,” said Mr Coppini.

The changes in the Victorian land market have paved the way for a new phase in the property market cycle, according to George Bougias, Oliver Hume head of national research, with the landscape in 2022 growing significantly distinct from how it was in the previous two years.

As he weighed in on the data from the report, Mr Bougias has highlighted five key factors, on top of COVID-19, that could possibly influence the property market: 

“These factors include higher inflation and rising interest rates, potential changes to lending policy by the Australian Prudential Regulation Authority (APRA), the upcoming federal election and the gradual reopening of international borders.”