Incentives of up to $50,000 are fueling a surge in land sales in Geelong, according to new research. Red23’s findings reveal a 16% increase in land sales at the end of 2024, largely driven by rebate offerings aimed at re-engaging homebuyers in the market.
While the rise is notable, it comes from a lower base, with land sales still 50% below long-term averages in the region. Industry experts are optimistic that an anticipated interest rate cut could boost buyer confidence and further stimulate the market.
The median land price in Greater Geelong has reached $420,000, marking a modest 2.26% increase over the past year. Meanwhile, the affordability of existing homes has made them a more attractive option for many buyers.
Prominent developers such as Villawood Properties, Stockland, and Dennis Family Corporation are offering rebates and other incentives of up to $40,000, especially on titled residential land in estates like Armstrong Creek, Mount Duneed, and Lara. With the addition of a $10,000 government grant, eligible buyers could access up to $50,000 in total incentives to build their first homes.
Terry Portelli, Managing Director of Red23, noted that buyers have responded positively to the incentives, particularly for titled lots. However, he acknowledged that affordability remains a significant concern for many prospective homebuyers.
Rory Costelloe, Executive Director of Villawood Properties, expressed hope that a potential interest rate cut would help revive the market. He explained that builders are currently facing a significant downturn in sales, with figures 50% lower than the previous decade’s average. “Builders are hoping and praying for this rate cut to bring more buyers back,” Costelloe said.
To counteract affordability challenges, developers and contractors have begun lowering prices. However, Costelloe noted that suppliers have yet to adjust their pricing. He stressed the need for the Reserve Bank of Australia (RBA) to implement a rate cut, which could help stimulate market activity.
Costelloe also called on the Australian Prudential Regulation Authority (APRA) to relax the current 3% serviceability buffer required by banks when assessing borrowers’ ability to repay loans. He argued that returning to the pre-COVID 2.5% buffer would make it easier for potential buyers to secure home loans.
“The 3% buffer is a barrier for many buyers who, after calculating what they can afford, are told they can’t qualify due to the margin. This is preventing people from entering the housing market,” Costelloe said. “Relaxing the buffer wouldn’t be inflationary; it would simply enable more people to buy homes.”
As Geelong’s property market continues to navigate these challenges, industry leaders are closely watching for signs of recovery—both through the impact of incentives and the hoped-for easing of interest rates.
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