The Melbourne greenfield market
is however now showing tentative signs of moving into an early-recovery phase
through the second half of 2013. The extent of recovery however will remain
modest in the near term.
Consumers of new land in Melbourne's Growth
Corridors, which includes first home buyers as well as upgraders, are
still demonstrating subdued confidence because of weaker economic conditions
across Victoria and associated job uncertainty.
Speaking at the Urban Development
Institute of Australia's Research Breakfast this morning, Charter Keck Cramer Director
Strategic Research Robert Papaleo said, "Victoria had consistently led production of
greenfield lots and new housing up until two years ago.
"Results
from the National Land Survey Program (NLSP*) showed that Melbourne achieved a
share of more than 40% of all greenfield lot sales across the major capital cities
in 2009-10 but the latest March 2013 quarter survey highlighted that Melbourne's
share had fallen to 15%."
"Significantly, despite
its longstanding position of dominance, Melbourne's most recent sales performance
now ranks as fourth highest behind Perth, Sydney and South-East Queensland."
Mr. Papaleo said, "Signs
of impending recovery include the reduction of lot prices to meet customer expectations
as well as further recent reductions to already-low interest rates and the re-alignment
of the first home buyers grant by the Victorian Government to the construction
of new homes.
"These factors should
lead to moderately higher sales activity through the second half of 2013."
"The greatest impediment
to recovery however remains confidence in the Victorian economy and
employment uncertainty over the near term".
The Urban Development
Institute of Australia believes that escalating taxes, charges, levies and
rates imposed by Government upon developers is resulting in consumers ultimately
paying higher lot prices because of the greater costs faced by developers
in producing lots.
The development industry response
to the downturn over the last 3 years has resulted in lower lot prices (median
lot price is now $199,000 compared to a peak of $222,000 in June 2011), fewer
and smaller new stage releases and innovations to housing design to maintain affordability.
After a long period of planning
lags, it is anticipated that there will be a structural shift in
the market caused by the introduction of a number of large master planned
projects through 2013 and 2014.
These types of projects should
lift over sales activity but the historic dominance of such estates may cannibalise
opportunities for smaller developments especially as the market moves
through a drawn-out recovery phase compounded by historic high
levels of on-going new supply.
* The NLSP is a joint initiative
of Research 4 and Charter Keck Cramer that tacks more than 750 active trading
estates across growth corridors across Australia's major capital cities and major
regional centres. See ww.nlsp.com.au
Media
Enquiries:
Ron
Smith, Corporate Media Communications, UDIA (VIC) - Mobile: 0417 329 201
UDIA (Victoria) Research Breakfast
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