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Victoria’s land market found a base slightly above historical lows in February as reservations rebounded from January’s seasonal low towards the top of the band the market has operated at for nearly three years, according to new research from Oliver Hume.

The latest Oliver Hume Monthly Dashboard, which tracks a range of property market data, showed annual sales are at the highest level since mid-2023, but are still well below long-term averages and well below what would be expected in a market recovery.

The monthly data showed a 79% increase in the number of reservations for new homesites in February, following a 28% jump in enquiry in January.

First home buyer activity also rebounded in February, with their share increasing to 36.5%, up from 30% in January. Meanwhile, the share of repeat buyers decreased to 63.5%, indicating a slight shift in market dynamics.

The Oliver Hume Monthly Dashboard also showed:

- In February, buyer decision-making patterns changed, with the average time to purchase decreasing as a notably higher percentage of buyers made transactions within 30 days compared to January.

- Owner-occupiers further solidified their foothold in the market, raising their share to 71.8%, up from 68.1% in January.

- The proportion of purchases in the 250-299 sqm category increased to 15.6%, reversing January’s decline and indicating a slight rebound in demand for smaller lots.

- In February, the share of Australian-born buyers declined to 35.9%, down from January’s 41.7%, while overseas-born buyers increased to 64.1%, highlighting a growing presence of international purchasers.

Oliver Hume CEO Julian Coppini said while activity was still at historically low levels, he was cautiously optimistic that residential land sales had passed their low point with February monthly sales pushing the 12-month total to the highest level since mid-2023.

Oliver Hume Chief Economist Matt Bell said gross land prices were showing signs of stabilisation, though there were notable differences between metropolitan and regional markets.

“However, net prices remain under pressure due to high levels of rebates and incentives” Mr Bell said.

He said the RBA’s decision to cut interest rates by 0.25% on February 18 had added some confidence to the market.

“While the single rate cut is unlikely to significantly ease affordability constraints, the reduction is driving increased interest from buyers, particularly those who have the ability to purchase but have decided to wait on the sidelines until conditions begin to improve, including investors,” he said.

Following the rate cut, the established market experienced an uplift, with the national CoreLogic home value index increasing by 0.3% in February 2025. Melbourne recorded the most substantial uplift across all capital city markets, recording 0.4% monthly increase in February, breaking a stretch of ten successive monthly declines.

Mr Bell said the uptick in first home buyer interest also pointed to higher participation in 2025.

“While first-home buyer participation remains below earlier peaks, this uptick indicates a more balanced landscape, possibly influenced by stabilising borrowing conditions or government incentives supporting new entrants,” he said.

CEO Julian Coppini said the performance of the broader residential property market will be a key factor in shaping residential land conditions in 2025.

“While Victoria’s housing market continues to face headwinds, including an oversupply of listings, partly driven by higher state government taxes on investors, conditions could improve in 2025,” he said.

ENDS