After several years of volatility and stagnation, Melbourne’s residential land market is beginning to stabilise, offering cautious optimism for the first time since 2021.
A key driver is the renewed strength in the established housing market, which is narrowing the gap between the cost of established homes and new builds, encouraging more balanced buyer behaviour.
According to Matt Bell, Chief Economist at Oliver Hume Real Estate, sales volumes are trending back towards long-term averages, supported by a gradual increase in affordable housing options and growing investor interest.
“Population growth, migration and increasing demand for housing are expected to provide a long-term boost, although affordability challenges continue to keep many first-home buyers locked out.”
While titled land supply remains healthy and sentiment is slowly improving, risks persist including high living costs, finance challenges and cautious buyer confidence.
Matt adds, “The market outlook suggests 2026 could be stronger than 2025 as rebate-driven sales activity eases and broader recovery signals strengthen.
“The decision this month by the Reserve Bank of Australia to cut the cash rate by 0.25% is positive news for all property markets. The two rate cuts earlier this year have already delivered six consecutive months of dwelling price growth and one of the biggest quarterly jumps in land sales Melbourne has seen in years.”
“For homeowners with a $750,000 mortgage, this latest cut saves more than $1,300 annually, while boosting borrowing capacity for new buyers. We expect this decision to lift activity in both new and established markets through the remainder of 2025, with further cuts in late 2025 and into 2026 likely to keep momentum strong,” he continued.
For buyers considering Windermere, this renewed confidence in the market comes at a time when choice is still plentiful, but momentum is building. With interest rates easing and borrowing power increasing, now is a window of opportunity to secure land before demand accelerates and competition intensifies.
Windermere’s range of land sizes, proximity to transport links, schools and shopping, and commitment to continuing to build a family-friendly community, mean buyers can invest with assurance.
History shows that when confidence returns to the market, available land can be snapped up quickly, leading to upward pressure on prices. Acting now allows buyers to take advantage of today’s more competitive pricing and wider choice, rather than waiting until the market becomes more crowded and affordability is further challenged.
Matt concluded, “Melbourne remains one of Australia’s most resilient property markets. When the fundamentals align – population growth, improved affordability and low interest rates, the pace of recovery can be swift. Those who position themselves early are often the ones who benefit most from the upswing.”
Visit the Windermere Sales Gallery at 275 Greens Road, Mambourin to find out more. Open Saturday – Wednesday from 11am- 5pm. Titled land starts at $280,000 (subject to change).
