After several challenging years, Victoria’s greenfield market is showing clear signs of a sustained recovery. Two rate cuts in February and May, combined with last year’s tax relief, have eased borrowing constraints and reignited buyer confidence.

Lot sales surge across Melbourne and Geelong 

Lot sales across Melbourne and Geelong surged 48% in Q2 2025, reaching their highest quarterly level in three years. At the same time, Melbourne’s auction clearance rates hit an 18-month high.

As ANZ’s Daniel Gradwell highlights in his Q&A, confidence has been the missing ingredient in recent years, and it is finally starting to return.

Construction costs remain a key challenge 

Despite improving demand, elevated construction costs continue to weigh on the market. While material prices have stabilised, labour costs remain high, keeping overall project costs above pre-pandemic levels.

Planning certainty unlocks major opportunities 

On the supply side, planning certainty is creating long term opportunities. A major milestone is the Beveridge North West PSP, which will deliver 15,000 new homes, eight schools, and 80 hectares of open space.

This PSP joins other priority precincts including Clyde South, Derrimut Fields, and Merrifield North, all critical in shaping Victoria’s housing pipeline.

However, PSP approvals have slowed dramatically; down to just one or two per year, compared to 10 per year in the mid 2010s. If Victoria is to meet its ambitious housing targets, a faster and more efficient planning system will be essential.

Townhomes step into the spotlight

Amid affordability pressures, greenfield townhomes are playing a bigger role in meeting buyer demand. They are bridging the gap for budget conscious buyers and investors while also drawing back previously sidelined groups including single parents, second home buyers, and lower income households.

This shift, combined with renewed buyer confidence, is placing townhomes and smaller detached homes at the centre of industry focus. Interstate investors, owner occupiers, and builders alike are looking closely at this product segment.

This article references findings from our Q2 2025 Victorian Greenfield Market Report. Read the full report here.