Land sales in Ballarat have fallen and may continue to fall as interest rates and building costs inflict growing pain in the real estate market, says a leading research company.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Ballarat's urban sprawl in the west still accounted for most sales says Melbourne firm RPM Research, with 93 per cent of lot sales located in that growth corridor.
While land prices continue to rise, supply fell 33 per cent to 229 new releases, an outcome RPM blames on 'council delays with record paperwork levels and councils operating with severe staff shortages.'
Gross lot sales in Ballarat fell by 36.1 per cent in the second quarter of 2022 compared to the first - a fifty per cent fall compared to a year ago. Buyer activity peaked in September 2020 and has steadily decreased with minor peaks since then. There were 212 gross lot sales in Ballarat in June 2022.
Lot sizes will decrease, RPM says, although for the interim they have remained around 450 square metres, lower than 2020's average size of 511 square metres.
"As the purchasing landscape becomes more challenging the trend towards smaller and more affordable lots is likely to drive developers to offer more varied products," RPM says.
"With expected interest rate rises looming, potential buyers may become more hesitant about entering the property market. In turn, demand will slide and likely lead to price stagnation."
Median lot prices rose by 1.6 per cent to $315,000, $62,500 or 24.8 per cent higher than a year ago.
There is still a need for new supply in Ballarat despite the fall in demand, to 'maintain the area's competitiveness over areas on the fringe of Melbourne's west,' RPM opined.
Meanwhile agents Colliers Ballarat says the industrial market in the city continues to grow with new free-standing and strata units being built in the face of a supply shortage and limited land releases.
Land values continue to rise, with a number of industrial property sales achieving $400 per square metre. Colliers sold six properties in March: 37 Production Drive Alfredton sold for $405 per square metre, followed by 35 Production Drive at a record price of $555 per square metre; 9 and 11 Kennedys Drive, Delacombe sold at auction for $1.9 million and $1.83 million respectively; with 113 and 115 Elsworth Street, Canadian selling for $311 per square metre.
Colliers says the City of Ballarat's reduction on the applied rate to the capital improved value (CIV) for industrial properties from 0.00977259 to 0.00799620 (-18.18%) will result in a rate cut on industrial land with a CIV of $1,000,000 being reduced from $9,772.59 to an estimated $7,996.20.
Now just one tap with our new app. Digital subscribers now have the convenience of faster news, right at your fingertips with The Courier. See how to download it below:
