Developments remain difficult to stack up in Melbourne’s property market as revenues fail to keep pace with costs, forcing developers to work with significantly lower margins than they may have previously considered.

But on the bright side, construction costs have stabilised after years of volatility, banks are dropping long-standing profit thresholds for development loans, and international investment capital is pivoting towards Australia—and Melbourne is becoming a prime target.

These were key takeaways from a property development panel at The Urban Developer Greater Melbourne Residential Summit, which last week examined the challenging yet evolving landscape for developers.