Expert Eye: Victorian Land Market Trends of 2022
by Carlisle Homes
Planning on building your dream home? Here are the current property trends you need to know about, plus a look at what’s forecast for 2023.
Whether you’ve got your sights set on buying a site in Victoria for your dream home in the coming months or you’re waiting for your lot to title, it’s wise to know what’s happening in the property market as a whole. To keep you informed, we spoke to three experts to get the latest on Victorian property trends in terms of price and lot sizes, title dates, what buyers are looking for now, plus insider tips on how to secure land in today’s competitive market.
Victorian Prices On The Rise
The Australian property market experienced extraordinary growth in the last part of 2021 and early 2022. Property and land prices across the country saw a steep in this period, and Victoria was no exception. “Greater Melbourne has seen a 20% rise in lot pricing over the past 12 months, with the median lot price $383,000,” says William Anderson, Builder Relationship Manager at RPM Group. In regional areas, the South East and Geelong have seen the most prolific growth; “Prices have risen $60,000 and $81,500 respectively over the past 12 months,” he says.
And with many buyers looking to relocate outside city centres in search of more space and a better lifestyle, demand for homes in Victoria’s growth corridors has exploded. “The South East is one of our most sought-after corridors, mainly due to the limited stock available,” says Adele Katelanis, Builder Partner Specialist at Core Projects. “In February 2022, the South East saw a 96% increase in sales, although this was largely as it was coming off a quiet holiday period of December 2021/January 2022. It is interesting to note that there was a significant increase and demand for Geelong as well as regional areas, which was uncommon pre-Covid.”
See Carlisle’s Lara display village servicing the Geelong Region.
Meanwhile, Anderson has seen even growth across all regional areas; “All corridors have grown steadily in line with each other, showing there is a consistent demand across all regions.”
Lot Size Trends
While land prices have risen, the average lot size has remained largely unchanged. “Lots sized between 300 and 400 square metres continue to be the most popular, accounting for approximately 44% of lot sales in Victoria over the past 12 months,” says Anderson. Katelanis concurs, adding; “When broken down by region, Geelong’s most popular lot size was 400 square metres (12.5 x 32 metres), while in Victoria’s South East, West and North, the most popular land size was 350 square metres (12 x 5 x 28 metres).”
Victorian property trends show that larger lots are proving less popular, says Anderson; “Where we’ve seen a major change is the decrease in sales in 448 square metre and 512 square-metre lot sizes and above, with sales of lots below 300 square metres making up the difference. These small-lot housing code lots now account for 22% of sales.”
As families look to carve out more living space from what they’ve got, homes are heading upwards – a growing trend in the Australian property market. “Everyone would love to be able to buy a 448 to 512 square-metre lot, but the reality is budgets are seeing them now consider the 350 to 400 square-metre lots,” says Daniel Begley, Sales Manager Brown Property Group. “As average lot sizes get smaller, there has been a natural evolution of trying to maximise the home size you are able to fit on a block. This has meant that more customers are now choosing to build two-storey homes.”
Covid and the growing trend for working from home have changed what many buyers want from their homes, says Anderson; “The rising popularity of flexible working options is making buyers rethink their design choices.
“More buyers are looking for dedicated office spaces in their homes and, with the ability to work from home and travel less, many are willing to consider areas further from their workplace to find a larger and more affordable option.
“Affordability has raised a concern for many buyers, meaning more people are looking to purchase smaller land but spend more on their construction to maximise internal space, which can be achieved by building a double storey home – meaning the land to house ratio is changing, with backyard size reducing, but number of rooms increasing,” he says.
The composition of double-story designs is changing dramatically with new designs often building over garages to provide more floor space upstairs.
Buyers are increasingly prioritising a connection with nature and a sense of community when choosing where to build a new home, says Begley; “Connectivity of neighbourhoods is a huge priority now, along with access to parks and open spaces.”
Supply has been an obvious issue across the Australian property market, so it pays to look in the right places when searching for land. “Some regions have bigger supply issues than others, for example, the South and Geelong. Due to more supply in the West, this region usually achieves the largest percentage of sales. The West’s market share at the end of February was 47%,” says Katelanis.
Note: Carlisle exclusive house and land packages can be found weekly on our house and land filter by selecting the exclusives tick box. Explore more here.
“Title dates are currently being extended into 2023 and 2024 due to a number of factors; high volumes, the success of the HomeBuilder grant, and the unexpected sales rate during Melbourne’s lockdown periods. Because of the high volume of sales across Victoria, developers have sold through stock that is expected to title in the next 12 to 24 months.
“Our developers are very mindful of selling too far out, which is why you’ll see that a lot of projects currently have limited stock to sell through. This is to ensure they can deliver on their projects in a timely manner,” says Katelanis.
“There is a very slim chance of finding anything titled within the corridor currently. However, sometimes opportunities present themselves when buyers have a change in circumstance. To give you the best chance of securing something titled, being finance-ready is vital,” says Begley
Lock in your fixed price now
If your land title is forecast in the future and you’re concerned about rising prices of materials and trades, it’s wise to lock in a fixed base price now. With Carlisle Homes’ Price Lock guarantee, you can secure today’s prices and start building in 18 months’ time. It also means you can take advantage of our great special offers, secure today’s luxury inclusions and put yourself first in line for your site start.
Buying land and then having to wait months for it to title can be frustrating, but the situation is not without its upsides. “Having more time to save means you can contribute more to your build deposit and potentially lower your home loan amount,” says Anderson. “Often, by the time the customer has their land titled and the client is ready to build, there is uplift in the value of the land, which makes the wait worth it,” adds Katelanis.
“In the last 12 months, in particular, the significant capital growth while waiting for titles has been a huge win for our customers,” says Begley. There’s also the stamp duty savings; “By buying land you are only paying stamp duty on the land component rather than the end value of the property.”
So, in such a competitive and fast-moving market, how should you go about securing land? The best way is to get in touch with Carlisle Homes and we will refer you to the land estate. This way you can leverage our strong relationships with developers, take advantage of our exclusive offers and house and land packages, and create a seamless path to securing the land you want.
Insider TIP 1: Be Proactive
“Securing land in this market is proving a challenge for buyers. However, being proactive is the best way to ensure you get the lot of your choice,” says Anderson. Regularly checking in with a land consultant about available stock, staying up-to-date with new releases and enquiring through your builder are all effective methods to ensure you secure your lot,” he says.
“Having a team with strong and active working relationships with our land sales team is important as opportunities do come up when lots sometimes come back to market,” says Katelanis.
Insider TIP 2: Be Finance Ready
When the time is right to secure land, ensure all your financials are in place, advises Begley. “Being finance-ready is one of the most important steps – making sure that you have a clear understanding of your actual budget for both house and land. This will put you in a much better position when discussing your requirements with both land agents and builders as we can tailor our conversations and present solutions based on an actual number rather than a hypothetical.
“Work with your building consultant – this is so important as the best consultants are very well-connected and have their finger on the pulse regarding new releases,” he says.