Block sizes fall in bud­get bo­nanza

Av­er­age Arm­strong Creek plot shrinks 48sq m in a year

Geelong Advertiser - - NEWS - PETER FARAGO

ARM­STRONG Creek de­vel­op­ers are creat­ing smaller blocks and new medium-den­sity pro­jects to tar­get young home­buy­ers on bud­gets be­low $420,000 to counter nega­tive sen­ti­ment amid ris­ing land prices.

New re­search from RPM Real Es­tate Group shows the me­dian price for a new house block in the Gee­long re­gion rose 31 per cent in the Septem­ber quar­ter to $272,000, com­pared to the same time last year.

The re­search re­veals Gee­long new land sales made up 17 per cent of Mel­bourne’s growth ar­eas mar­ket, with more blocks selling here than in the south­east­ern sub­urbs.

While the re­gion’s av­er­age block size was steady at 448sq m, the re­search shows blocks in Arm­strong Creek were shaved by about 48sq m to 400sq m in the quar­ter in a pitch to buy­ers on a bud­get.

RPM Real Es­tate di­rec­tor of com­mu­ni­ties Luke Kelly said dou­bling the first-home buyer grant had pulled for­ward many pur­chases in late 2017 and early 2018.

But the surge in sales saw prices rise as the amount of stock fell.

Mr Kelly said a con­trolled stock re­lease pro­gram, es­pe­cially in Arm­strong Creek, also con­trib­uted to the fall in sales this quar­ter.

He ex­pected prices to re­main sta­ble as de­vel­op­ers fought for the first-home buyer mar­ket, now ac­count­ing for 60 per cent of pur­chasers.

“The mar­ket has only got a cer­tain amount of money that they can af­ford and we’ve got to that bench­mark in Gee­long,” Mr Kelly said.

“Added to the price growth is who they’re selling to and 60 per cent are first-home buy­ers. De­vel­op­ers know that they can’t keep push­ing up prices.”

He said there was an in­crease in the num­ber of smaller lots put into the mar­ket as de­vel­op­ers pitched to young buy­ers, while new es­tates like Glen­lee and An­chor­age were try­ing to cre­ate a foothold.

“To ap­peal to buy­ers in that bracket from $380,000 to $420,000 as the first-home buy­ers sweet spot, we want to make sure we’ve got the prod­uct to put into the mar­ket,” he said.

Sev­eral de­vel­op­ers are also de­vel­op­ing medium-den­sity prod­ucts, in­clud­ing at­tached dou­ble-storey town­houses, that are priced in that bracket.

More than 600 lots sold in the quar­ter as Gee­long sales lifted from 12 per cent of Mel­bourne’s growth ar­eas sales in early 2017.

Gee­long is con­sid­ered part of Mel­bourne’s growth ar­eas mar­ket, but Mr Kelly said the re­gion en­joyed life­style and price ad­van­tages, plus dou­ble the first-home buy­ers grant.

“You make a sav­ing of $50,000 straight off the bat when you move to Gee­long (from Mel­bourne),” he said.

Only es­tates in Bacchus Marsh, Wal­lan and Mel­ton South have cheaper land than Gee­long.

In­creased com­pe­ti­tion with the new Austin es­tate open­ing in Lara un­der­pinned a 17 per cent rise in sup­ply and an 18 per cent jump in sales in the north­ern Gee­long suburb.

The lot price in Lara lifted 1.5 per cent to $264,000. Arm­strong Creek was the big­gest area with 259 sales for the quar­ter.

Though the rate of sales fell 19 per cent, buyer de­mand for avail­able stock caused a 5 per cent price rise to $271,500 for a me­dian lot.

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