Wolfdene Bucks Bearish Market with Brompton Bull
Wolfdene’s ‘Brompton’ community continues to fight back against a growing chorus of market negativity, banking an average of 40 sales per month since re-launching in February.
With more than 275 land sales in 2018, our sales team has generated project revenue in excess of $90m, with no signs of a significant downturn in buyer demand for the project.
Industry data authored by Research4 and referenced by the Urban Development Institute of Australia (UDIA) shows Brompton is outselling the next best performed land estate by nearly 2-1 on a month-by-month basis.
Located at Cranbourne South in the heart of Melbourne south-eastern growth corridor, Brompton’s 100-hectare masterplan will provide 1,400+ homes for more than 3,000 residents.
There’s no doubt market conditions are making life tougher for the industry, you only have to pick up the paper each morning to get a feel for the sentiment out there.
However, what our sales results show is that if you’ve stayed true to a clear set of acquisition criteria and stuck with the first principles of successful development there’s still plenty of active buyers to connect with.
By first principles, I mean having a well-located site and creating a sense of community that appeals to owner occupiers and is underpinned by quality neighbourhood amenity, a commitment to place making and considered urban design.
This is not revolutionary, of course - but with more stock available, increased competition among developers and a shrinking buyer pool, the importance of these elements on a buying decision is magnified.
The deals have continued to flow after a busy start to the year, which saw us re-execute 166 contracts at their original prices, despite them becoming void in late 2017 due to sunset clause provisions in the contract.
The good will that’s come from Wolfdene’s decision to honour those sales has been a huge factor in our performance – Brompton is seen as a place that’s driven by community minded principles.
Above all else, I believe that the key to Brompton’s success has been our ability to act as quickly as possible on the feedback from the market on affordability, lot mix, price and lending conditions.
The median lot size in the City of Casey remains steady at 400m2 with a median price of $365k or $913 per m2.
But what the market is telling us is that after a sustained and unprecedented period of price growth where the median lot price in the region escalating by 35% in 2017 alone, a 400m2 block or house and land package pushing $600k is no longer attainable for the majority of buyers.
This has been exacerbated by the significant shift by the banks to tighten their lending criteria.
At Brompton, we’re constantly reviewing our product mix to ensure we hit the sweet spot of an aspirational lifestyle proposition for a realistic price that purchasers can get finance for.
Sales data from our projects in the South-East shows that lots under 350m2 are on the market for an average of 16 days, but this figure more than doubles for larger lots.
It’s a very clear message of where the buyers now sit and fascinating when you consider how quickly that shift has occurred – it was only this time last year the median lot size in the region was 448m2.