Terry Portelli, Managing Director of Red23, is expecting a steady recovery for Melbourne’s new homes market during 2020, but is wary of influencing factors yet to play out. The market recovery is in its infancy but we have seen the established market turn, making gains with price escalation and clearance rates similar to early 2018. We know this is partly due to demand exceeding supply. This correction will flow through to the new homes market.

First home buyers will continue to take advantage of the FHLDS, the State Government’s Stamp Duty Scheme and the First Home Buyer $10,000 scheme to enter the property market.

With Greater Melbourne’s median lot price was down -0.2% month on month to $324,000 or -7.8% year on year, we witnessed some transition in land size. The 300-400sqm lots were favourable, particularly in the western and south-east corridors. Land 500sqm+ was popular in Greater Geelong, however in 2020 we anticipate this to decrease. In 2020, we are seeing strong demand for <300sqm lots.

The full effect of the bush fires and coronavirus remain unknown on the national and global economies.  We await the Reserve Bank of Australia’s initiatives to manage the economy through these uncharted waters.