New land sales are at a seven-year low in Melbourne, even across the ‘Growth Corridors’, according to latest research.
The National Land Survey Program for the September 2012 quarter has seen new land sales drop significantly, showing a decline since the 2009/2010 peak. This decline has seen only 378 sales per month over the quarter as opposed to 1,301 lots per month over the 2009/2010 financial year.
Over 2011/2012, 573 lot sales per month were recorded.
This has pushed annual land sales down 8,800 lots below their peak two years ago and has moved Melbourne from the highest volume market to the fourth largest (behind South East Queensland, Sydney and Perth).
Monash University’s Bob Birrell said that "The recent decline is serious for the building industry in Melbourne because block sales are a key determinant of home building activity in Melbourne. The reduction of nearly 8,800 lots per annum will have a direct impact on a range of supporting industries, as well as state and local government revenue streams."
The reasons for the decline are numerous. Flagging population growth is not necessarily the reason for the contraction, “because in the past year Net Overseas Migration has recovered and, as a result, Melbourne's population is likely to have grown by 70,000 or more in 2011-12. Nor is Melbourne experiencing any net loss of people to interstate destinations.”