Melbourne suburbs with cheapest land revealed amid claims city is set to become Sydney-style apartment market | Oliver Hume

Melbourne’s housing market is on the brink of a major shift as dwindling supply forces homebuyers towards apartments. Discover where the last affordable blocks are.

David Bonaddio

@daveobigbro

2 min read

October 16, 2024 - 8:30AM

Are apartments Melbourne’s real estate frontiers for first-home buyers? Picture: NewsWire/ David Crosling

Melbourne homebuyers are on the cusp of having apartments be their only viable option as the city’s supply of cheap land dwindles.

A leading voice in the city’s housing development sector has warned that the Victorian capital is now as little as five years away from following in the housing footsteps of Sydney.

New research from Oliver Hume has revealed there are just two suburbs with median land prices below $800 a square metre.

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In Moorabool Shire, suburbs like Maddingley and Bacchus Marsh offer the city’s most-affordable land prices at $748 and $796 a square metre, respectively.

Oliver Hume chief executive Julian Coppini said the appeal of these areas, which are about 45 minutes to an hour from Melbourne’s CBD, appealed to buyers.

“Over 60 per cent of first-home buyers are targeting properties around $550,000 or less,” Mr Coppini said.

Oliver Hume Chief Executive said Melbourne is following Sydney’s housing trajectory with a focus on apartments on the horizon.

“These areas traditionally present more favourable acquisition costs and provide accessible entry points for new homeowners.”

Reflecting on Melbourne’s growth path, Mr Coppini drew parallels with Sydney, suggesting that Melbourne could soon adopt similar housing trends.

“Melbourne is following Sydney more closely than many realise,” he said.

“In Sydney, suburbs like Penrith and Kellyville, located up to 70 kilometres from the CBD, have embraced apartment living.

“Melbourne needs to make a similar shift, apartment complexes, including in greenfield spaces, should become a standard option for homeownership as the market needs change.”

Mr Coppini said interest from investors and builders was rekindling, spurred by Melbourne’s relative affordability compared to places like Western Australia, Queensland and South Australia.

He predicted a market revival in Melbourne, which has been dormant for some time, could potentially see strong movement as early as 2025.

PropTrack senior economist Eleanor Creagh is calling for more affordable housing solutions in Melbourne, despite the city being considerably more affordable than other states.

PropTrack senior economist Eleanor Creagh said although Melbourne had a strong tradition of effective home building, there remained a substantial gap between the available housing and the demand for affordable options. The rising costs of new construction compound the issue, making homes less accessible for many. “There’s a noticeable gap between what is available and the demand for affordable homes,” Ms Creagh said.

“We need a huge emphasis on developing housing solutions that are well-connected and rich in public amenities.

Ms Creagh advised first-home buyers to manage their expectations, potentially considering alternative suburbs or types of housing such as apartments and townhouses to match market realities.

Studio Jock founder and home flipper Josh Malcolm suggest first home buyers consider moving out to regional areas such as Geelong if they don’t need to live near the Melbourne CBD.

Founder of Studio Jock and home flipper Josh Malcolm said the practicality of apartment living for those on a budget wanting to stay near the city made sense.
“With rising interest rates and renovation costs, focusing on well-designed, cost-effective housing is crucial,” Mr Malcolm said.

He suggested that buyers might need to consider lifestyle changes if they are wanting to purchase a home over an apartment could consider moving to growing areas such as Geelong, if living near the Melbourne CBD isn’t essential.

Top 10 cheapest places to buy land in Melbourne

Rank	Suburb	LGA	$/m²
1	Maddingley	Moorabool	$748
2	Bacchus Marsh	Moorabool	$796
3	Mernda	Whittlesea	$826
4	Wallan	Mitchell	$841
5	Sunbury	Hume	$894
6	Pakenham East	Cardinia	$904
7	Beveridge	Mitchell	$923
8	Exford	Melton	$927
9	Officer South	Cardinia	$942
10	Botanic Ridge	Casey	$950
Greater Melbourne Median			$1,110