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Melbourne’s land market continues to show the early signs of a recovery with demand edging higher again in the March quarter while prices also showed a slight improvement, according to new data from property services group Oliver Hume.

Oliver Hume today released its latest Quarterly Market Insights (QMI) report for the March quarter, which analyses thousands of land sales across key markets in Victoria, South East Queensland and Adelaide.

VIEW FULL QMI REPORT | WATCH MATT BELL QMI VIDEO

The research showed March quarter sales volumes for Melbourne rose for the second consecutive quarter to the highest level in two and a half years but remain well below recent highs (and still more than 40% below long-term average sales levels).

Sales over the last 12 months (to the end of March) were up nearly 25% on the previous 12-month period, and monthly sales in February and March were higher than for any month since 2022.

Oliver Hume Property Group Chief Executive Officer Julian Coppini said the March quarter results were very promising after a torrid two years for the land market.

“Increasing volumes and prices are obviously better than the alternative, but we are still some way off returning to normal market conditions,” he said. “One critical factor that must be addressed before any significant market recovery can occur is the volume of resold and returned stock currently available.”

Melbourne’s gross median lot price rose to $408,000 in March from $405,000 in the December quarter. Headline prices were flat over the 12-month period and likely fell in net terms as financial incentives remain largely unchanged for purchasers.

The median price of land in Melbourne is now less than South East Queensland ($437,900), while the gap to Adelaide ($320,000) has also narrowed.

On $/sqm of land terms, Melbourne's median $/sqm rate was down slightly in the March quarter as the average lot size rose from 358 sqm to 365 sqm. Over the last 12 months, however, the $/sqm rate was flat and remained marginally higher than the second quarter of 2022.

Oliver Hume Property Group Chief Economist Matt Bell said continued strong population growth and the best relative affordability position compared to other states in decades meant Victoria was in a strong position to take advantage of the improved interest rate outlook. 

“Investor channels are already reporting increased interest from consumers as the potential for capital growth outstrips those other markets that have seen prices rocket,” he said.

“We expect sales rates to improve over the remainder of 2025 and pricing incentives in the market to begin to move back to normal levels marking a return to price growth in the second half of 2025.”