Melbourne Value Gap a ‘Counter-Cyclical Opportunity’

The harder Melbourne’s property market becomes, the harder some capital is looking at it. While most headlines talk about stalled projects, punishing taxes and a planning system widely described as unworkable, a quieter counter-narrative has been building. Melbourne has repriced against every other major Australian capital and a growing number of developers, interstate investors and offshore institutions are paying close attention. Charter Keck Cramer national executive director Richard Temlett said Melbourne apartments priced below $17,500 per square metre were selling to interstate buyers at a pace that is reshaping the city’s off-the-plan sales channel, while product above $20,000 per square metre is stalling at fewer than two transactions per month. Speaking at The Urban Developer Melbourne Residential Summit 2026, Temlett described a market in which Brisbane buyers were actively purchasing Melbourne apartments, drawn by a value gap that has made cross-city arbitrage viable in a way he had not previously seen. “It’s probably the only point in my entire career that I’ve seen that trade-off genuinely work: you can sell in one market, buy in another and crystallise real money,” he said. “I find it astounding that in Brisbane you are consistently achieving $22,000 to $24,000 per square metre, not even just in the best areas. Melbourne is significantly undervalued.” Hard ceiling for buyer appetite Comparable product in Melbourne is trading at $17,000 to $18,000 per square metre, and that band is functioning as a hard ceiling for buyer appetite in the current environment. The gap between Melbourne’s pricing and that of other capitals has opened a window Temlett characterised as unique: buyers selling in Brisbane or Sydney and purchasing in Melbourne can achieve a real financial outcome rather than simply exchanging equivalent market positions. ▲ Charter Keck Cramer national executive director Richard Temlett: Every single data point I see suggests significant upside from Melbourne. Resi Ventures director Khurram Saeed used buyers at Park Ridge, Queensland, who purchased there four years ago for around $650,000 and are now sitting on $300,000 in equity, as an example. “For them to sell in that market for $900,000 or a million and reinvest here—there’s logic to that,” Saeed said. In other states, homeowners who have recorded paper gains of up to 50 per cent find that selling forces them back into the same market cycle, leaving their net position largely unchanged. Melbourne’s relative underperformance has inverted that dynamic. Frasers Property development director Penny Dabner said investment demand was currently the strongest driver of volume in the Melbourne market, with Frasers in active land acquisition mode across growth corridor locations. “When you look at Sydney and Brisbane, where price points were well above Melbourne a few years ago, there’s still that relativities story working in our favour,” Dabner said. ID Land managing director Matthew Belford drew a parallel to conditions around 2010, describing Victoria’s subdued land market as creating a relative-value gap against other states not seen since that period. Being outbid on a $130 million offer for a rezoned site in Melbourne’s west with a project runway of more than three years points to the level at which some buyers are now pricing a Victorian recovery, Belford said. “Luck is when opportunity meets preparedness,” Belford said, adding that capital needs to be active in the market now to be positioned when sentiment turns “Waiting for confirmation of a recovery means entering too late,” he said. ▲ Stonebridge national director Julian White, Frasers Property development director Penny Dabner and Centuria Bass managing director David Stone. RPM national strategy manager Tim Hyland’s 15-year greenfield site sales analysis backs the buy-now strategy: land acquired during subdued phases delivers significant value uplift in subsequent cycles. At Armstrong Creek, Victoria, where land transacted at $1.4 million per hectare in the “quiet” 2018–19 period, is now trending at $3.5 million per hectare. Donnybrook Road sold at $1.4 million per hectare is now around $2.5 million per hectare. Melehan PSP land, which traded around $700,000 per hectare during that subdued period, has since hit about $2.5 million per hectare as planning progressed. “Looking backwards, it’s always easy to spot the best times to buy,” Hyland said. “But if you look at where we are now and [then] looked at this chart in five years, you’d probably say this was one of those times to buy.” Melbourne site pricing resets During the past four months, RPM has sold close to $600 million worth of land and one-third of those transactions was completed off-market. Site pricing across Melbourne has also reset. Stonebridge national director Julian White said the depth of buyer interest during the past 6 to 12 months had been stronger than in the period before, with both private and institutional groups increasingly active. One unlisted city transaction illustrated how much of a buyer’s market Melbourne is right now—a site that reached $250 million to $300 million at the top of the market is expected to sell for under $120 million. “If you’re a buyer with capital to deploy, you should be participating in as many processes as possible, because it is definitely a buyer’s market,” White said. White said Melbourne’s investment case for institutional players in Singapore needs little explanation. The fundamentals are strong and capital already understands the value story. The only open question, he said, was timing. “It does genuinely feel like a good time to buy. I said the same thing two years ago … but the cycle does feel like it’s getting closer,” White said. ▲ Resi Ventures director Khurram Saeed, ID Land managing director Matthew Belford and RPM national strategy manager Tim Hyland. Overseas investors, Temlett said, were running the same numbers and finding Melbourne’s value proposition increasingly compelling despite Victoria’s elevated tax and charge environment. From a lending perspective, Centuria Bass managing director David Stone said sentiment in Melbourne’s growth corridors was relatively robust despite feasibility pressures, and that the company holds a positive outlook on the city. Stone believed the market has found its floor. “I mean, it can’t get much lower, can it?” Stone said. Greenfield house-and-land packages in Melbourne are costing around $800,000, compared with more than $1 million in South-East Queensland and $1.2 million in Sydney. Median apartment pricing in Melbourne is approximately $405,000, against $500,000 in Brisbane and $695,000 in Sydney. Opportunity is right now Ranked sixth-most expensive nationally by property values, Melbourne is now what Temlett called a counter-cyclical opportunity for capital seeking risk-adjusted returns Population growth underpins the long-term demand case. Melbourne is projected to surpass Sydney’s population before the end of the decade, requiring substantial acceleration in both infrastructure delivery and housing supply. This is but one reason Saeed said Resi Ventures was actively seeking to expand its Melbourne land position. “I’m a big believer in Melbourne. You can’t have 150,000 people moving to a city as great as Melbourne and keep it down,” he said.

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Leon Della Bosca
Thu 28 May 26

Melbourne Value Gap a ‘Counter-Cyclical Opportunity’

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