Homebuyers super-sizing

Armstrong Creek price tag a drawcard

HOMEBUYERS are choosing bigger blocks in Armstrong Creek as new data shows the price gap with Melbourne growth areas is closing.

The RPM Real Estate Group’s latest Residential Market Review shows Geelong’s traditionally affordability advantage is narrowing as buyers in Melbourne turned to smaller and cheaper lots to break into the housing market.

Latest figures show the gap in median lot price between estates in Armstrong Creek, Mt Duneed and Charlemont and Greater Melbourne had almost halved from $60,000 to $37,500 in the June quarter.

Armstrong Creek’s June quarter median lot price was $272,500, compared to $310,000 for greater Melbourne and on par with Wyndham Vale in Melbourne’s west.

The Greater Geelong growth corridor accounted for 10 per cent of total lot sales in the June quarter 2019, the lowest share in three years.

RPM Real Estate director of communities Luke Kelly said heavy negotiations between buyers and developers led to a 5 per cent drop in price in Melbourne, where the median lot s size had fallen to 400sq m.

However, the relative affordability in Geelong’s biggest urban growth area led more buyers to snap up larger blocks, with the report showing an increase from 400sq m to 440sq m during the quarter.

While developers had squeezed supply, releasing 191 lots in three months, there was also less discounting or incentives on offer to Geelong buyers, Mr Kelly said.

“There is still a lot of competition in Geelong — there probably has been a good amount of estates competing for business. That being said, a lot of developments have diversified with medium density and smaller lots.”

Gross lot sales fell 76 per cent to 186 lots as weak demand led developers to restrict new lot supply. But Mr Kelly said the sector had bottomed out, with APRA changes to lending requirements and interest rate cuts meaning buyers were looking to spend a little more.

“We’re seeing more house and land packages selling in the $450,000 range. Buyers are back into the marketplace again,” Mr Kelly said.

“It’s starting to translate through to buyers who say, I can afford that now, now is not a bad time to look.”