Melbourne Land Prices Tick Up Despite Interest Rate Concerns

• Median land prices across Melbourne rose 0.5% in the December quarter, up 4% over 2025.
• Quarterly sales (2,137) dipped for the second quarter in a row, but the total sales for 2025 (9,068) remain well above 2023 lows.
• December-quarter sentiment was affected by inflation data, which suggested the possibility of interest rate increases in 2026.
• The median price in Melbourne remains below that in South East Queensland ($498,400), while Adelaide ($371,000) continues to narrow the gap.

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Melbourne’s median land price edged slightly higher in the December quarter despite volumes retreating for the second quarter in a row as buyer confidence was dented by worsening interest rate expectations, according to new data from property services group Oliver Hume.

Oliver Hume today released its latest data for the December quarter, which analyses thousands of land sales across key markets in Victoria, South East Queensland and Adelaide.

The research showed that December quarter sales volumes in Melbourne dipped for the second consecutive quarter, but remained well above the historic lows of 2023 and 2024. Sales volumes remain more than 40% below the long-term average.

Melbourne’s gross median lot price rose to $408,000 in the December quarter, from $407,000 in the September quarter. The median price was only slightly below the record high of $409,000 achieved in the March quarter last year. The median price rose 4% over the year, while the median price per sqm fell 5% as the median land size pushed higher

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Sales over the last 12 months (to the end of December) were up over 40% on the previous 12-month period.

Oliver Hume Property Group Chief Executive Officer Julian Coppini said the December quarter was impacted by more bearish consumer sentiment as higher inflation increased the likelihood of higher interest rates.

“The market remains highly sensitive to interest rate changes and the higher inflation numbers we saw during the last three months of the year set the expectation that interest rates were staying on hold or heading higher,” he said.

“Ultimately, those concerns were realised with the recent decision by the RBA to increase rates.”

Mr Coppini said that while the market was much healthier than the lows of 2023 and 2024, any return to more normal levels of activity would be tied to stabilising rates and a more buoyant economic outlook for Victoria.

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The median price of land in Melbourne remains below the price in South East Queensland ($498,400), while Adelaide ($371,000) continues to narrow the gap.

In $/sqm terms, Melbourne's median price was up slightly in the December quarter, while the average lot size remained steady at 392 sqm. Over the last 12 months, however, the $/sqm rate fell 5% as the average lot size rose 9% from 358 sqm to 392 sqm.

Oliver Hume Property Group Chief Economist Matt Bell said Melbourne remained Australia’s biggest land market in terms of fundamental demand for new housing and was still expected to grow strongly in 2026.

“Despite the softening in December volumes, the Melbourne market is still well positioned to deliver growth this year,” he said.

“Positive interstate migration, a recovering established housing market and the best relative affordability compared to other major land markets in decades mean growth in volumes, and finally prices are coming,” he said.

ENDS

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Media enquiries:

Ben Ready

RGC Media & Mktng

0415 743 838

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Mitchy Koper

Oliver Hume

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