Smaller lots are gaining ground in the Victorian land market as buyers look for ways to keep their budgets in check.
According to the latest Colliers Victorian Residential Land Market Update, buyers became more value-conscious through the first half of 2026, favouring compact lot sizes that balance price with liveability.
We spoke to the experts at Colliers about what the latest sales data says about buyer demand, developer strategy, and where the market is heading.
Less is more on land
The report reveals demand was strongest for lots between 376sqm and 400sqm across Melbourne’s growth corridors and Greater Geelong in the first half of 2026.
In Metro Melbourne, the category accounted for 21.18 per cent of year-to-date sales, with a median price of $427,500 and an average time on market of three months.
Smaller 262sqm lots, measuring 10.5m by 25m, also performed strongly, accounting for 15.38 per cent of sales.
In Greater Geelong, the 376sqm to 400sqm category accounted for 18.94 per cent of sales at a median $400,000.
“Buyers aren’t stepping away from the market but they are becoming much more deliberate about what they purchase,” Colliers Residential Research Manager, Land, Hoang Vo-Tran said.
“Well designed, efficiently sized lots are striking the right balance between affordability and functionality, allowing more buyers to enter the market without compromising on location or lifestyle.”
Rebates Sweeten the Deal
Developers are meeting tighter household budgets with targeted incentives rather than broad cuts to advertised land prices.
These include rebates on selected lots, additional incentives for titled land and builder referral offers.
Across Metro Melbourne and Greater Geelong, rebates typically range from $20,000 to $25,000, with titled lots attracting an average rebate of $25,278.
The number of estates advertising rebates has increased 50 per cent year to date.
Build-ready stock is also on the rise. Available land supply fell 4 per cent year on year to 3,181 lots, but titled stock increased 46 per cent and now accounts for almost half of available market supply.
Well-positioned stock is still moving relatively quickly, with 46 per cent of June sales going under contract within three months.
“Affordability remains the biggest challenge for many buyers and incentives are becoming an increasingly important tool for developers to help bridge that gap,” Colliers Residential National Director, Land Marketing, Terry Portelli said.
“Rather than relying on broad price cuts, targeted rebates allow developers to support purchasers while protecting the long-term value of their communities.”
The Ongoing Affordability Test
Affordability is likely to remain a major influence on Victoria’s greenfield market as buyers weigh land, construction and household costs together.
For developers, the challenge will be getting the balance between lot size, pricing, incentives and build-readiness right as buyers take a closer look at the total cost of a new home.
“Affordability will continue to shape purchasing decisions across Victoria’s growth corridors,” Mr Portelli said.
“Developers that deliver the right combination of product, pricing and purchaser support will be best placed to capture demand as market confidence continues to improve.”
