By Julian White National Partner Stonebridge Property Group. 

After being back at it for the past three weeks, the key themes for the year ahead are becoming clear said Julian White, with these being:

A transactional market – As highlighted above, the market was very transactional at the end of 2024, and based on activity so far in 2025, this trend is expected to continue. We are seeing motivation from both buyers and vendors to conclude deals, likely signalling that the bottom of the market has been reached. Vendors are keen to recapitalise, and buyers are seeking opportunities in potentially growing markets. The clean-up in the insolvency sector will continue this year, possibly with greater prominence than in 2024.

The greenfield land market is seeing a resurgence of interest from townhouse developers, with definitive growth in land values in 2024 for this end use. Affordable price-point buyer inquiry is up, driving increased interest from developers. For larger land subdivision opportunities, transactions have been—and will continue to be—limited. Recent VPA announcements late in 2024 have put on notice that the delay in new PSPs will continue to create a lack of new land supply. PSP-approved and readily serviced land holdings are rarely being offered for sale as a result.

While not as prominent in the greenfield markets, we are also seeing increased demand in suburban townhouse sites. Products that can be positioned at a solid discount to the median house price have been central to this interest.

Apartment sites and buyer demand have become highly sector specific.

Blue-chip locations capable of selling product over $15,000/sqm have seen very strong interest.

Suburban markets, where the median house prices are too low to support increased revenues from apartments, have witnessed the largest correction in land values of any site sector.

Larger sites for apartment development in city fringe/CBD markets have witnessed the fewest transactions at any time we can recall over the past decade. There are fewer buyers in this sector than a couple of years ago, with many BTR groups working on varied return hurdles or no longer having capital funding support. Vendors have also shown limited desire to adjust pricing expectations due to the scarcity of suitable sites or permits. We will watch this with interest, as the planning process, utilising the Development Facilitation Program, could be a game-changer for the permit process and how the market values existing permits.

Retail landholdings were one of the major successes of 2024. Government funding is supercharging the childcare sector, and with an undersupply of convenience retail in greenfield markets, land values are increasing and are expected to rise further in 2025. Our team completed nine retail development site sales in 2024 highlighting demand in this sector.