Australian Property News

Melbourne has Australia’s smallest land allotments

Posted on Wednesday, November 16 2011 at 3:55 PM

Despite Melbourne now claiming the smallest allotments in the nation, affordability still hasn’t improved, according to the National Land Survey Program director Colin Keane.

“The median lot size in Melbourne of 448 square metres is now 165 square metres smaller than lots on offer in Sydney,” said Keane.

“Of every 100 new lots released onto the market, 35 lots are less than 400 square metres.”

Keane said only three years ago the ratio was 10 lots for every 100.

While the objective of reducing lot sizes is to improve affordability, the price per square metre is the highest in the nation, with Melbourne’s new land now averaging $496 per square metre, he said.

The percentage of lots priced under $200,000 is now at a near record low of 27 per cent, said Keane.

“In 2008, 90 per cent of all new land across Melbourne was accessible to first homebuyers. Families could secure a quarter of an acre for just under $200,000 and the price of a small lot was $123,000,” he said.

“Today, the only products left that are under $200,000 are lots which equal one-twelfth of an acre.

“Small lots, when first introduced into the market averaged $150,000, however in 2011 the median price for a 350 to 400-square-metre lot is $212,000 while a 300 to 350-square-metre lot is now $193,000.”

Because small lots have experienced significant price escalation over the past two years, even smaller lots are now being brought to the market to maintain an affordable price point, said Keane. “Lots less than 290 square metres are now being priced at $175,000 and offered as a house-and-land package from $350,000.”

With the developer focus primarily on increasing density, customers will simply start to reject what’s being offered, said Keane.

“With 45 per cent of Melbourne’s annual demand for housing planned for the greenfield markets, the focus should be on ensuring that families have a sustainable living product rather than just an ‘opportunity’,” Keane said.