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Melbourne developers offer big rebates as unsold lots surge

Melbourne developers are offering big rebates and discounts and accepting low deposits as they try to clear a mountain of unsold housing lots and revive the country’s biggest – and worst-performing – house-and-land market.

New figures from project marketing firm Red23 show stock availability in Melbourne’s greenfield housing markets hit 2800 lots last month, up 24 per cent year-on-year and the highest level in almost four years.

Of this stockpile, about 30 per cent – more than 800 lots – are already titled, shovel-ready lots, a 464 per cent increase on a year ago and a record high, according to Red23.

Melbourne’s struggling new homes market faces a host of headwinds: the narrowing gap between new and existing homes – Melbourne is the only capital city where values are falling – the continuing impact of overselling lots during the pandemic, affordability and borrowing challenges, and weak buyer sentiment.

The slowdown in lot sales bodes ill for federal and state government efforts to increase supply and alleviate a worsening housing crisis. Melbourne historically accounts for about 40 per cent of the national house-and-land market, which is a popular housing option for first home buyers, families and new migrants.