First home buyers flocked to Melbourne’s western growth corridor making up 40 per cent of all of RPM’s land sales in greater Melbourne last quarter, but there are fears this could dry up when the HomeBuilder scheme finishes at the end of this month.
RPM chief executive Gary Dunne said there had been 6508 lot sales across the region last quarter, 9 per cent lower than the last peak in September 2017, but warned the HomeBuilder scheme needed to be extended to drive further economic recovery in the state.
“The continuation of HomeBuilder and extension of its criteria to commence construction within six months to 12 months will create a softer landing pad for the economy and property market, avoiding an abrupt halt or property cliff,” he said.
“This shores up the construction industry pipeline into 2023 when overseas migration is likely to move back to more normal levels.”
At the end of the December quarter of 2020 RPM had sold more than $140 million in off-market englobo land, an increase from $100 million in the previous quarter.
ANZ associate director of property Daniel Gradwell agreed the HomeBuilder package had been a driving force in economic recovery and argued the package should remain in place.
“If there is one thing that has become really clear during the past six months, it is the need to keep stimulus in place for as long as it is needed, which I think is the completely appropriate outcome,” Gradwell said.
“I believe we have seen the worst of the economic outcomes and it’s quite clear that Victoria has performed on the same pathway as the other states and territories.
“Finance approvals by owner occupiers to build in the December quarter are 80 per cent higher than the same quarter a year ago, while building approvals for detached housing are at record levels.”
Melton sales activity outpaced other areas in the western growth corridor. It accounted for a high 62 per cent of western growth corridor’s gross lot sales in the December quarter. First home buyers accounted for 80 per cent of all owner occupier purchasers in the western growth corridor.
Andrew Welsh, founder and managing director of Wel.co, said first home buyers had underpinned strong growth in the second half of 2020 but they had also seen an exodus of Melburnians moving from the inner-city suburbs to the growth regions for a bigger property.
“It’s not just first homebuyers looking into those greenfield areas now, but second and third homebuyers who have never really been 40 minutes outside of Melbourne to look at what growth corridors actually look like,” Welsh said.
Jinding managing director Liz Ronson said the HomeBuilder program had been successful in the house and land space.
“The momentum created by [HomeBuilder] and the uptake of titled lots has just created a huge momentum across the market,” Ronson said while speaking at The Urban Developer’s Property Outlook vSummit.
The HomeBuilder stimulus package ends on March 31. Victoria accounts for more than a quarter of all applications for the grant with more than 23,000 applications as of the end of January.