Melbourne Land, Building and Renovation Values 2025
May (2025M2) at marketnews.com.au – James Buy Sell Advocacy is publishing Melbourne Home, Land & Renovation Market Values
After the Vote: A New Energy for Melbourne Property?
Mal James
Buy Sell Advocate
0408 107 988
mal@james.net.au
Up until this weekend, buyers and sellers have been as unclear, as nervous, and as hesitant as I’ve ever seen.
And it wasn’t just about property. The hesitation was broader — across stock markets, crypto, trade, and politics. Volatility and indecision have defined 2025 so far, following several years of slow decline and economic drift.
We started the year with a bang — a sense that maybe, finally, things were turning. A runway to take off. But we barely made it a fortnight before that runway began to crack. Tariff uncertainty, global instability, and shifting sentiment brought volatility back with full force.
But now — maybe, just maybe — something has shifted.
With a resounding election result, the prospect of interest rate relief, and perhaps some breathing space for economies without the turbulence of “Trumpy Trump,” there’s a renewed sense that the runway might be reopening. This time, with fewer potholes.
I certainly hope so. Because what emerged this weekend — at least in tone — was something we don’t often associate with economic recovery: respect, kindness, decency.
Maybe those values have been underestimated as economic drivers. Maybe things are changing.
And if that’s the case — if care and ethics are to play a role in long-term economic strength — then the next question is a practical one:
How do we operate — buy, sell or hold — in what has been a 3.5-year underperforming Melbourne property market?
Where to begin?
Clarity would be a good start.
In Melbourne’s property world, that’s always been our focus: helping individuals and families make better-informed decisions — so they can move forward with what’s best for them.
And right now, the most useful thing we can offer is a clearer understanding of market value and price — how the market sees your home, how to interpret asking prices, and how to act with confidence when the numbers make sense.
Why Are Some Boards Gathering Cobwebs? Why Some Buyers Are Paying Way Too Much?
In 2025, what’s causing the issues — the stalled deals, the homes sitting with boards out front gathering cobwebs, the buyers with hands in pockets gathering fluff, or the lone wolf paying well over the odds while the rest of the pack stands back?
It’s often one core thing:
A complete misunderstanding of how the market views the dollar value of your land, your building, and your renovations (emotion).
Some sellers are anchoring to past highs or overcapitalised improvements. Some buyers are misreading land value or paying a premium for styling that won’t hold over time. And many are simply unclear on how the different layers of a home’s value work together — or don’t.
That’s why breaking down the price into parts — land, building, renovation — is more important now than ever.
True market value of a home can be best defined as:
The price a well-informed buyer is prepared to pay, and a well-informed seller is prepared to accept, in today’s market — with both understanding the property’s land value, building value, and emotional or lifestyle appeal.
It’s not what you hope for, what you paid, or what your neighbour got.
It’s what this property will sell at in this market, based on fact, feedback, and context.
Perspective - Why Understanding True Market Value matter for certain types of properties.?
No matter how skilled the agent, how strong the styling, or how sharp the asking price, some homes simply won’t perform in a soft market — and yet they can perform exceptionally well in a strong one.
Getting it wrong can cost you.
- If you sell in the wrong market, you may damage your property’s value for years.
- If you buy in the wrong market, you risk limiting future growth.
- And if you realise later just how far off the mark your deal was — that can damage your confidence and your decision-making psyche going forward.
Of course, sometimes luck knocks on your door.
But if you understand the market, the position of your home within that market, and what constitutes an exceptional opportunity — then you’re not relying on luck.
You’re using the market to your advantage.
Trading Up In Toorak
Some of the smartest property moves happen in tougher markets — when higher-end homes are struggling and lower-end properties still attract just enough buyer interest to get deals done.
What this creates is opportunity: the gap between your current home and your dream home is often much smaller than in a booming market.
If you understand the true market value of your current home — and can get it sold at a fair price — and also understand the market value of the better home — and can buy it well — then you’re using knowledge, not luck, to your advantage.
It’s like swinging from one vine to another in the jungle. If you can let go at the right time, grab something better, and hold steady through a flat patch, the reward isn’t just lifestyle — it’s often real equity gained by understanding the market and acting before others do.
Not Selling in Brighton
Last year, I talked seriously about selling my home in Brighton — the plan was to free up some capital and help my kids into homes. I was ready to go.
But so far, 2025 hasn’t delivered the right market conditions. My home sits in a growth zone, and right now, the developer market is well down. That means instead of fair $4m-plus offers, I’d likely be facing offers starting with a $3 — and to be honest, that doesn’t make sense.
So rather than go to market and wear the angst of a poor result, I’ve shifted strategy.
I’m now pursuing a town planning permit for apartments. For around $50k, I’m giving myself a shot at attracting the kind of $6m result that a neighbouring property — same land size, same zoning — achieved in a stronger market.
Yes, I still want to move on. But by understanding market conditions and my property’s position within them, I’m choosing a path that aligns with long-term value rather than short-term pressure.
Some homes simply don’t sell well in soft markets. But in the right market, they attract premiums. Knowing the difference can mean the difference between regret and reward.
Selling in Glen Iris or anywhere for that matter
If your home has been on the market for a long time without meaningful engagement, then you’ve got a problem — especially if you want to sell.
That problem is simple: your understanding of market value is not aligned with buyers’ perception of value. And if you’re in a market that’s limited, informed, and perhaps sceptical about your property — rightly or wrongly — then time alone won’t fix that.
Lowering the price doesn’t always bring buyers back if the perception is that the home has deeper issues than just price.
There are many homes where I’m very clear on the underlying value — land plus building — but far less clear on the premium or discount the market might apply in a time-limited, four-week public sale campaign. That’s why, in many cases, I recommend starting with a multi-agent off-market process. It allows us to gather real feedback on perceived market value — without putting a permanent record of “failure” online.
The alternative is patience — and while it’s a sound strategy in theory, it doesn’t always hold in practice.
In this current market, the reality is simple: if you ask too much, you’re not selling.
And for many sellers, the root cause is this — they don’t know, or choose not to accept, the true market value of their home.
Buying Regional Well
A recent regional example highlights why understanding true market value is critical — especially post-COVID boom and post-land tax hikes, where buyer interest in many regional areas has dropped significantly.
If you’re looking to buy and the asking price “seems about right,” but you haven’t done your research, you’re almost certainly overpaying relative to the real market.
And that overpayment doesn’t just hurt now — it hurts again when you try to sell.
You may have forecast the right growth, but if your starting point (the price you paid) was too high, then your expectations fall flat. You’ll struggle to get offers, let alone the capital gain you’d hoped for.
In the past few months, we’ve bought two regional homes at 20% and 30% below their asking prices. Why?
Because we understood the shift in values — and we had clients with the confidence and patience to act on long-term logic, not short-term pressure.
In any market — metro or regional — knowing true value is what separates a good buy from a costly regret.
A Base Reference for Better Decisions
Through May and into winter, we’ll be outlining how the market is currently valuing the core ingredients of your property — land, building, and renovation — across inner Melbourne, select outer areas, and key regional centres.
It’s not a forecast.
It’s not a pitch.
It’s a base reference. A structured lens.
You could call it a kind of Melbourne Property Bible — not to dictate decisions, but to support clearer thinking. To provide context. To give you a grounded sense of where the general market sits.
Whether you’re buying, selling, or renovating, it’s about knowing how your property stacks up — not in theory, but in the eyes of today’s buyers and sellers.
The Melbourne Land, Building and Renovation Values Book
James Buy Sell Advocates – 2025 M² Edition
Because in uncertain times, a well-calibrated baseline is one of the most valuable tools you can have.
Perspective - Clarity Matters. $ are important, but its not everything
Before any value can be truly extracted — financial or otherwise — I’ve found we need something more fundamental:
clarity.
Clarity about what you want.
Clarity about how the market is behaving.
And clarity about where price, value, and emotional timing all fit into the equation of good buying and good selling.
At James Buy Sell Advocates, this is where we are most often called to assist — across three recurring areas where clearer thinking can make all the difference.
1. Finding the Right Fit
This is about identifying quality — in a home or in a buyer; on or off-market. It often begins with a deceptively simple question:
What do you really want?
To assist, we’ve refined our in-house Home Rating Tool over 20 years to help bring structure and objectivity to what can otherwise be an emotional difficult and vague process.
2. Understanding Price — Land, Building, Reno
A large proportion of today’s non-deals stem from a misreading of value.
To help navigate this, we use what we call the Price Burger:
A layered approach to unpacking value into its core components — land, building structure, and renovation.
The question we ask is:
What is this worth in today’s market — and how may that compare to its long-term underlying fundamental value?
3. Making the Deal Work
When to act, what to do, and how to do it. This is less about tactics and more about alignment — timing, motivation, and method. We assist with our OARR process:
Options (3), Actions (1), Risk vs Reward — all filtered through three tests:
1st Impressions, Sleep & Gut.
Perspective - How Can You Calculate Market Values?
At James Buy Sell Advocates, we assess Melbourne’s top-end property market values by dissecting three core components: land, building, and emotion.
Land
is the foundational element. We evaluate it based on location, size, orientation, zoning, and comparable sales. For instance, in suburbs like Toorak or Brighton, land value can constitute a significant portion of a property’s worth. We analyse recent sales of similar blocks to determine a per-square-metre rate, adjusting for unique features or constraints.
Building
value varies with age, design, and condition. New homes are typically assessed at replacement cost, while older homes’ values depend on architectural merit and potential for renovation. For example, a 1940s home without significant design features might have minimal building value, whereas a well-maintained period home could command a premium. We maintain a database of comparable sales to inform these assessments.
Emotion / Error / Variance - Renovation
Emotion/Variance/Renovation This layer represents the intangibles — the street presence, the light, the feel, the prestige, the story. It’s where emotion enters the equation — and often where price expectations become disconnected from value.
In today’s market, one of the biggest sources of misalignment is outdated views on renovation value.
Many sellers — and even some agents — still carry pre-COVID ideas about what it costs to renovate. But materials, trades, and timelines have all shifted. What once cost $500k might now be $800k–$1m, and yet many price expectations haven’t adjusted.
We don’t ignore emotion — we account for it. But we place it in context:
- Does this “wow” factor hold value for others in the market?
- Is the renovation still aligned with today’s standards and costs?
- And is that added emotional layer worth what’s being asked?
In short, we translate emotional impressions into market-aligned value
History - Price & Value 2015
History - Price & Value 2021 to 2025
This is the kind of information many choose to ignore.
Our Price Burger model isn’t only about market timing — but market context does matter. And the graphs and data we’re seeing right now tell a clear story: many buyers are overpaying, and many sellers aren’t selling — because they haven’t fully grasped the market reality.
Data point after data point confirms that the market has been falling steadily since Cup Day 2021.
But some sellers are still pricing as though we’re in 2021 — thinking, “My home was worth $3.5 million then, so it should be worth $4 million now.”
The truth? All else being equal, the market today might value that same home closer to $3 million. That’s the shift we’ve seen.
And that’s why you’re getting no interest, no inspections, and no offers. Worse — if a genuine outlier offer did come in at $3.5 million, you’d likely reject it, thinking it’s too low. But that price may never come again. And now? You’re stuck. You can’t move on.
Understanding true market value isn’t just academic. It’s the difference between selling well and staying stuck.
Next Week our Markets and specifics on Values across Melbourne
