Residential land prices increasing in Melbourne as developers compete for limited stock
Residential land prices in Melbourne are approaching their previous peak levels as the pipeline land available for development begins to dwindle.
The National Land Survey Program (NLSP) March quarter survey, figures shows that the median block of residential land price in Melbourne increased 2.8% over the March quarter to $218,000.
Over the 12 months to March 2016 residential load lot prices in Melbourne increased 3.8%. Lot prices are just $2,000 below the previous price peak in September 2011 of $220,000.
Melbourne’s median residential land lot price is currently lower than Sydney’s by $245,000. However, because the developable land releases but it is believed that the level of affordability in Melbourne is unlikely to continue.
The demand for developable land in Melbourne continues to remain strong and stock level on the market remain low this will continue to drive up prices as competition from buyers increases. It is also likely to dive up property prices as lower levels of new housing stock comes on the market.
The National Land Survey Program data shows Melbourne has averaged 5,500 lot releases for each of the past three quarters and does not appear to be increasing.
National Land Survey Program data shows that the March quarter saw an average of 1,850 lots sold per month, the second highest quarterly sale rate since the National Land Survey Program began in 2005.
The Melbourne residential land market has posted four consecutive quarters of record or almost record sales volume, making 21,000 residential land lot sales for the year.
State government levies and taxes are also inflating land prices. Lack of Government land releases is also likely to have a price inflation impact on the Melbourne property market more generally.
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