Photo: Land Aerial
The Victorian land market is currently navigating a complex landscape where key factors are driving demand for specific types of properties.
One of the most significant trends is the rising value of sites with pre-approved permits. These sites offer developers a streamlined pathway to project commencement, minimising the risk of delays associated with regulatory approvals. The certainty that comes with pre-approved permits not only accelerates the development process but also mitigates holding costs, making these sites highly attractive to investors who prioritise efficiency and risk management.
Proximity to existing utilities and infrastructure is another critical factor shaping land market trends. Sites that are close to essential services such as water, electricity, sewage, and roads are in high demand due to the cost savings and reduced complexity they offer.
According to Cameron Zamora of Cushman & Wakefield, the ease of connecting to existing infrastructure can significantly shorten project timelines, enhancing the overall appeal of a property. “As developers seek to maximise returns and minimise risks, the value of well-serviced land continues to rise.
“In addition, land with low to zero cultural heritage significance is becoming increasingly desirable. The absence of cultural heritage considerations simplifies the development process, reducing the likelihood of delays related to archaeological surveys or the preservation of historical artifacts. As a result, these sites are often easier to develop and more attractive to buyers, particularly in markets where time and cost efficiency are paramount.”
In the current market, properties that align with these development metrics are experiencing high demand across all price points. Prime development sites, offering clear investment and delivery pathways, are attracting numerous offers, reflecting the competitive nature of the market. While second and third-tier opportunities still garner interest, they are priced in accordance with the challenges and risks they present.
The motivation for divestment among vendors remains strong, driven in part by rising land taxes and other holding costs. As landowners face increasing financial pressures, the desire to offload properties has intensified, contributing to a dynamic market environment.
Hamish Burgess of Cushman & Wakefield said
“Developer mandates are responding to the structural demand/supply equation in the market. There is a clear imperative to provide housing in the current environment, albeit on opportunities which demonstrate a lower risk profile and ability to deliver product in a timely manner to meet the current shortage in housing supply.”
Mr Zamora highlights the challenges facing Melbourne's land market, stating, "Melbourne faces significant scarcity of immediately developable land, exacerbated by servicing sequencing issues and the Victorian authorities' prolonged approval processing times.
“Additionally, a review of the urban growth boundary is much needed, and suitable greenfield assets currently under Farming or Green Wedge Zonings should be strategically incorporated into the rezoning process to supply preferred and affordable housing options across the state of Victoria.”
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more. For additional information, visit www.cushmanwakefield.com.
