Donnybrook Deal Points to Battered Market’s Future Growth

Greenfield markets have copped a battering from rising interest rates as well as collateral damage from a swathe of homebuilder collapses, but signs are emerging of renewed confidence in the sector’s future growth fundamentals.

Melbourne developer Oreana Property Group has come out swinging with one of its most significant greenfield acquisitions in the Victorian capital's northern growth corridor.

It has put its foot on a 125ha parcel earmarked for a $700-million-plus house-and-land subdivision that forms part of the Peppercorn Hill estate at Donnybrook.

A planning permit is already in place for the project.

Under a development agreement with Dennis Family Corporation, which has secured hundreds of hectares of rezoned farmland for future housing during the past decade, about 1400 lots, a town centre, secondary school, sports fields and other open space will be delivered.

Oreana Property—led by Tony and Steve Sass—joins two other landowners as key stakeholders in Peppercorn Hill, which will comprise a total of about 5000 lots on completion.

The value of the deal, which is due to settle in the first half of 2025, has not been disclosed.

Tony Sass said the acquisition was a significant milestone for the diversified property company and reinforced its leading role in delivering housing in Melbourne.

“We are pleased to be working with Dennis Family Corporation for the delivery of this large-scale masterplanned community, which will provide much-needed housing, community facilities, and infrastructure in Melbourne’s northern growth corridor,” he said.

Dennis Family Corporation chief executive Peter Levinge added: “We look forward to Oreana joining our Peppercorn Hill land owners as we continue to develop and grow the vision for the thriving community at Donnybrook”.

The residential subdivision forms a major part of the Donnybrook-Woodstock Precinct Structure Plan in Melbourne’s outer north.

▲ An aerial image of the estate.

Marketing agents Peter Sagar and Paul Callanan from LAWD negotiated the transaction.

“Land sales have come off,” Sagar said. “The market probably peaked six to eight months ago.

“And that’s a factor of [rising] interest rates and the uncertainty in the house-and-land construction market with the likes of Porter Davis collapsing and all that sort of stuff. There’s no doubt that has damaged confidence in the market.

“But the underlying fundamentals and demand are extraordinary. They’ve turned on the migration tap again and we’re going to have 670,000 people migrate to Australia over the next two years, of which probably 60 per cent will come to Melbourne. We’ve got a bloody massive under supply looming.

“Yes, there’s a bit of short-term indigestion in the marketplace.

“But as soon as there’s certainty on interest rates and as soon as we can get through all of the issues going on with builders, all of the fundamentals point towards a very strong recovery in the short to medium-term … and, meanwhile, we’re still selling.”