UDIA (VIC) and Research4

Latest research from the National Land Survey Program (NLSP) shows that the average first home buyer is paying on average 30 percent more for a block of land and getting 36 percent less land than during the height of the property boom.

Colin Keane, Director of Research Four and the National Land Survey, speaking at the Urban Development Institute of Australia's Research Breakfast in Melbourne this morning said, "Melbourne Greenfield markets have averaged just over 1,000 first home buyer grants (new and existing) per month for the past five years".

"Under normal conditions (2007-2009) first home buyers on the fringe have tended to prefer existing property over new house and land. Six out of every 10 grants would be directed toward established dwellings."

During the property boom from June 2009 through to December 2010 first home buyers decided on mass to take up new house and land product over established, with six and a half out of every 10 grants now going into new house and land product on the fringe. Over this period the number of grants issued averaged 1,457 per calendar month (pcm), up 40% on normal conditions.

Mr. Keane said, "This boom period was helped by both State and Federal governments offering first home buyer grants for new property valued up to $32,000."

First Home Buyers could access new land product at an average price net of grants of $152,000. These grants combined with low lot prices assisted with Melbourne becoming the biggest new land market in the country.

Since the beginning of 2011 the number of first home buyer grants (new and existing) has reduced to just less than 900 per calendar month (pcm) for Melbourne Greenfield markets.

This represents a return to "normal" operating levels. Currently, a first home buyer looking to buy a new house and land package will be considering a block price net of grants of $198,000, thirty percent higher than what was on offer during the property boom only two year prior.

Mr Keane said, "In addition to the higher lot price and the lower level of government assistance, first home buyers have now less choice in terms of product type."

The median lot size during the boom was 512sqm, currently it is 448sqm. The average first home buyer during the boom has could access new land product anywhere up to 700sqm. Out of the complete menu of seventeen land size groupings, first home buyers could consider ten.

As at September 2012, first home buyers could access only four of the seventeen product types.

"It could be said that first home buyers looking for a family home on the fringe, have had the menu stripped back to just the entrée while still be asked to pay for a main," Mr. Keane said.

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