Land lot sales in Sydney’s new housing corridors have jumped 26 per cent in the past few months, while in Melbourne and Geelong, over supply and the high cost of borrowing has seen land lot sales plummet to an 11-year low.

Different state government incentives for new home buyers, house-and-land packages and cost-of-living pressures are widening the gap between the two biggest eastern seaboard markets.

In Sydney, land supply is tight after lot sales were scaled back during the global pandemic. By contrast, in Melbourne a lot of land sold but owners were hit with a number of land taxes that dented price growth. High interest rates and living costs were dampening demand.

RPM National group’s latest Victorian Greenfield Market Report for the fourth quarter of 2023 reveals the number of new land sales declined to 1770 lots, 12 per cent less than in the same period in 2022, and the lowest level since 2012.

Across the year, 7839 new lots sold, marking a 46 per cent decline on the previous 12-month period, when 14,602 home sites changed hands.

RPM National managing director project marketing Luke Kelly said while it had been a tough end to the year, buyers entered 2024 with renewed confidence.

“Purchasers are recognising they are now in the box seat to negotiate a good deal, with the sustained period of constrained sales favouring a buyers’ market,” Kelly said.

“Developers are continuing to offer incentives in the order of five to 10 per cent, saving an average of about $30,000, and the selection of titled lots available means purchasers can have their choice of home site and start building immediately if they desire.”

By contrast, Research4 data shows Sydney lot sales for the December quarter were about 500, a rise of 26 per cent on the previous three months and 24 per cent higher on the prior year.