Property developers are offering rebates of up to 20 per cent on vacant land as Australia’s housing downturn bites, with tens of thousands of dollars in incentives being dangled in front of buyers.
But the discounts mask a wildly divided national market, with buyers in southeast Queensland paying more than $500,000 just for land, while shortages are driving gains elsewhere.
Herron Todd White’s September Month in Review found Melbourne developers were increasingly turning to incentives to shift stock, with rebates in the city’s outer north climbing to as much as 20 per cent — about double their usual level.
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Lennium Group’s Lilywood Landings in the new city of Waraba.
HTW residential director Jarrod Harper said conditions across Melbourne varied considerably, with the south-east slowing as buyers shifted towards townhouses and smaller blocks and some builders handed land back as profit margins were squeezed.
“The outer north is stable with slight gains over the year and a healthy pipeline titling in early to mid 2027, though rebates have climbed to as much as 20 per cent, roughly double the usual level,” Mr Harper said.
“The west continues to attract first homebuyers and investors, with the 1,005-hectare Melton East community set to deliver close to 12,000 homes. The south-east has slowed, with estates partnering with volume builders on spec homes, buyers shifting toward townhouses and smaller lots, and some builders handing land back as margins compress.”
Jarrod Harper, residential director at Herron Todd White (HTW).
There are already substantial offers in the market.
At Mirvac’s Olivine community at Donnybrook, buyers are being offered rebates of up to $40,000 on selected titled blocks, as well as a $15,000 discount on eligible house-and-land packages from participating builders.
Nearby Donnybrae is offering a $30,000 land rebate on selected lots as part of a promotion running until October 3, along with a $10,000 deposit offer.
But buyers heading north to Queensland face a very different problem.
Mr Harper said median land prices across southeast Queensland now exceeded $500,000, while average construction costs were above that again.
That was pushing the price of a new house-and-land package beyond $1 million and putting it out of reach of many first-home buyers relying on government grants.
Donnybrae estate in Donnybrook by Dennis Family Corporation.
At Lilywood Landings Stage 11 in Moreton Bay, a 400 sqm lot sold off the plan for $535,000 in June, while at at Currawong Place in Bellmere, a 349 sqm lot sold off the plan for $400,000.
Mr Harper described affordability as a theme being repeated around the country, saying buyers were increasingly favouring “smaller, cheaper lots” in an effort to keep the total cost of their new home within reach.
Sydney’s new land supply remained concentrated in the north-west and south-west growth corridors, while Perth faced “chronic undersupply” and strong demand for well-located blocks.
The report found South Australia faced yet another problem, with water, sewerage and other essential services delaying new greenfield development despite strong buyer demand.
Mirvac is offering 40 per cent rebates for lots in its Olivine Estate in Donnybrook.
HTW said the national land market was telling a consistent story: “demand is holding up, supply is not.”
And affordability could become even more challenging if proposed changes restricting negative gearing on established housing push more investors towards new homes.
Mr Harper warned that could produce an unintended consequence, with investors increasingly competing with first-home buyers for new property.
It means aspiring homeowners could find themselves battling investors for new housing in undersupplied markets — while elsewhere developers are being forced to slash prices to convince buyers to commit.
