Buyers received a modest reprieve in February 2025 with the first interest rate cut since November 2020. The 25 basis point drop was widely anticipated, thanks to inflation cooling through Q4 2024.

But expectations alone didn’t trigger a surge in activity. Many buyers held off until the cut was official. As a result, lot sales over January and February tracked slightly below the same period in 2024.

March momentum builds

That changed in March. The rate cut had a similar effect on borrowing capacity as the stage 3 tax cuts introduced in July 2024, and enquiry levels rose accordingly. Buyers returned with greater confidence as seen in March lot sales jumping 5% year on year.

Quarterly sales shows cautious growth

Melbourne and Geelong’s growth corridors recorded 2,094 gross lot sales in Q1 2025. That’s a 1% lift on Q1 2024, but still 2% behind the previous quarter.

That’s a modest improvement and a reminder that affordability pressures remain, even with more supportive monetary settings.

Lot prices hold and sizes grow

A trend towards larger lots took shape during the quarter. The median lot price held steady at $400,000, while median lot size increased 2.2% to 365sqm. That shift pushed the median price per square metre down by 2.2%.

Discounts and rebates (typically between 5% and 10% of the headline price) were common, particularly for titled and near titled stock. These lots accounted for around two-thirds of all sales.

Even with incentives, the average lot still spent 185 days on market before selling; that’s just over six months.

Supply still trails demand

New releases gained momentum, reaching 1,852 in Q1. That’s a 10% lift from the previous quarter and a 22% increase year on year.

But supply remained below demand. Slower sales and returning stock pushed total available supply to around 6,150 lots by the end of March.

This article references findings from our Q1 2025 Victorian Greenfield Market Report. Read the full report here.