Melbourne's Land Supply Constraints Are Reshaping the H&L Market

The latest CoreLogic data paints a stark picture for buyers hunting house-and-land packages in Melbourne's outer ring. Greenfield lot registrations fell 34% year-on-year in the December quarter, while estate-approved but unregistered lots, the pipeline metric developers watch most closely, dropped below 12,000 for the first time since 2014.

For buyers, this scarcity is translating directly into pricing pressure. Average H&L package prices across the Western and Northern growth corridors rose 8.2% in the 12 months to February 2025, well ahead of the broader Melbourne dwelling market which grew 4.1% over the same period.

Developers are responding in two ways: releasing smaller lot configurations (typically 280 to 320sqm compared to the traditional 400sqm standard), and bundling those lots with tighter builder specifications to maintain headline package prices. The result is more affordable entry points but less flexibility for buyers who want to customise their home design.

For investors, the tightening supply is creating a favourable backdrop. Rental vacancy rates in these estates are running at 1.1 to 1.4%, and new tenants are absorbing asking rents quickly. The question is whether land price appreciation continues to outpace borrowing costs, a calculus that changes with each RBA decision.

Buyers who move quickly on current listings are likely to benefit from the supply squeeze. Those who wait may face both higher prices and fewer choices.