Victorian Property Market Outlook: Off-the-Plan Apartments & Land Estates

As the year draws to a close, let’s take a look at where the Victorian property market is at and what lies ahead for 2025.

Off-the-plan apartments

2024 has seen a low number of off-the-plan apartment sales and approvals, with policy changes in recent years impacting investor and foreign purchaser activity, leading to fewer apartment launches.

The recent announcement by the Victorian Government of the temporary off-the-plan stamp duty concession was welcome news to both buyers and developers. With investors once again able to access the concession for twelve months, along with the removal of thresholds, off-the-plan apartment sales are expected to see an increase over this period, which in turn should unlock future apartment projects.

And with a growing population, plus owner occupiers now making up the largest portion of buyers, off-the-plan apartment sales are going to be key to unlocking housing supply.

The expected growth in the property market’s apartment sector will be driven by an undersupply of new homes. According to the Melbourne Apartment Market Conditions research report, the active pipeline of apartments going forward is around half the volume delivered in Melbourne’s peak of 2015-2017. Based on the existing inner and middle Melbourne pipeline and current forecasted demand, Melbourne will be in deficit of approximately 52,800 apartments by 2029.

The build-to-rent sector is also seeing an upwards trend, with the pipeline in Melbourne increasing by 34% annually since 2017. We anticipate build-to-rent will play a significant role in meeting housing supply (particularly in the inner city).

Land estates

The Victorian Government’s release of the 10-Year Greenfield Plan in October was a positive step towards balancing housing supply with projected population growth, particularly in Melbourne’s growth suburbs.

The 10-year growth strategy will target 180,000 new homes, and according to the Housing Statement, approximately 24,000 (30%) of the 80,000 annual target for new housing will be in greenfield areas.

Latest Q3 2024 data has revealed an increase in sales activity of 1% across the growth areas of Melbourne and Geelong, with 2,350 lots sold.

Source: RPM Victorian Greenfield Market Report – Q3 2024

While a slight increase, it indicates buyer sentiment is improving – particularly with the annual Consumer Price Index increase of 2.81%, the first time in over three years it’s fallen within the Reserve Bank of Australia’s 2%-3% target.

Mid-year tax cuts, expected interest rate cuts and government incentives like the Home Guarantee Scheme should contribute to an increase in buyer confidence in 2025.

Affordability will continue to be the key factor influencing buyer preferences and developer strategies across land sales. We’re seeing developers offer incentives such as low deposits and rebates, particularly for titled lots, to secure buyers at the conversion stage.

Looking for property branding or marketing in 2025?

We’re a full-service agency who combine property expertise with creative and digital marketing. If you’re launching a new development next year and want to chat, reach out to Managing Director Ant Bray at anthony@tomorrowagency.com.au.