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Parts of Melbourne are set to see a rise in available housing and land supply, as the state government has announced the release of 50,000 land lots.
Once available lots of land hit the market, home buyers could see more selection and improved prices for real estate in Melbourne in coming months.
Victorian Planning Minister Matthew Guy said the release of the 50,000 lots will provide a boost of confidence in the state's construction industry and will ensure the "supply for housing growth is strong," in a March 6 statement.
"This announcement compliments other major projects that have been approved recently. I am pleased to be able to provide an economic boost for Victoria and to provide increased housing affordability through greater competition. More land supply will mean greater competition in the marketplace, driving lower lot prices for home buyers," Mr Guy explained.
The majority of this land will be released in the south-eastern, western and northern corridors of Melbourne, which are all within Melbourne's urban growth boundary.
"Victoria has some of the best new suburbs in Australia, with carefully-planned communities providing liveable homes for our growing population," said Mr Guy.
"We are far better placed for housing growth than other states, which keeps housing costs comparatively lower, and makes us an attractive location for investment and business growth."
Strong housing approvals and value growth
Victoria has seen strong growth in the number of houses approved over January, indicating a high demand for property in the state. Figures from the Australian Bureau of Statistics found a 10.4 per cent seasonally adjusted rise in dwelling approvals from December. This was largely fuelled by detached house approvals, which rose by 13.3 per cent over January.
Commenting on the release of the statistics, Housing Industry Association Executive Director for Victoria Gil King said residential construction activity in the state has dropped over the past couple of years.
However, this could be reversed in coming months after the Victorian government releases these 50,000 lots of land.
"We are encouraged that detached dwelling approvals numbers are strengthening, and we expect this area of the market to drive activity over the next few years," commented Mr King in a March 4 statement.
While the lower number of new houses being built has led to tight supply and demand levels, this has had a flow-on effect to median house prices. Over the 12 months to February 2014, home values for residential real estate in Melbourne have grown by 9.9 per cent - the second highest in the country. With the introduction of 50,000 lots, this could ease over time.
