Momentum Building for Melbourne After a Tough Year

Four prominent Melbourne property developers gathered at The Urban Developer Melbourne Long Lunch event were asked how they would describe 2025 in a word. While responses ranged from “lacklustre” to unprintable descriptions, they each admitted something unexpected happened as the year wound down—momentum. Not the frothy, overconfident kind that preceded the downturn, but the cautious, strategic variety born from hard lessons about diversification, cost control and the value of planning certainty in an uncertain market. Momentum What began as a year Hip V Hype director Katya Crema described as “chaotic” or “hectic” took an unexpectedly positive turn for the better. Crema said a sign for her that the market has turned a corner came after launching a 61-apartment project at Brunswick 10 weeks previous. ▲Hip V Hype director Katya Crema: The developer has teamed with Melbourne architects Austin Maynard to create ParkLife 2 at Brunswick. “We launched 61 apartments and we’ve sold just over half, so 30 apartments. And we’ve done every single sale ourselves,” Crema said. “I’m exhausted.” The Brunswick project is due to break ground in early 2026 and is Hip V Hype’s first joint venture with Cbus Property . Crema attributes the sales success to values alignment and sustainability credentials that “resonate with buyers seeking meaningful product differentiation in a crowded market”. The change was significant enough for Crema to describe the year as one of “building momentum” despite ongoing market challenges. “I think it really comes down to product, location and what you’re selling,” Crema said. “We know the market is not great in Melbourne now, but I do feel like we’ve turned a corner.” Gruelling Time and Place managing director Tim Price called 2025 “gruelling” as the group managed concurrent projects across sectors. ▲ Price said Time and Place had “a couple of lessons there on scale” in 2025. The company settled The Queensbridge Building while launching the Hannah Street Hotel under the Westgate Bridge and progressing several Southbank residential developments, stretching resources across Melbourne and Sydney operations. Price said the Hannah Street Hotel contributed significant shared amenities to the residential component including coworking spaces, gyms and steam rooms. This reduces costs for residents while hotel operations provide a stream of steady income and is a “really clever way to try and reduce the cost of running a hotel and offering services to the balance of the building”, Price said. Price is diversifying across multiple sectors including residential, office, industrial and self-storage and is deliberately staying away from large-scale developments. “We’ve had a couple of lessons there on scale and actually sitting in the pocket of price point where you’ve got multiple choices on lots of things, that actually puts you in a good position,” he said. Consolidation Nightingale Housing began 2025 in a pickle, owing money to the Australian Taxation Office and having to slash staff from 17 to five after three years without beginning a new project. Breathe Architecture director and Nightingale Housing co-founder Jeremy McLeod said the organisation had been “running consistently at a loss” but turned the corner this year, now operating in surplus under its status as a charity. ▲ The year ahead is all about “less cars, less costs, more incredible housing,” McLeod says. McLeod has shifted focus toward medium-density and secondary homes after years of multi-residential challenges. Nightingale plans to deliver 300 homes in 19 months across Victoria through its new backyard development model. The group is also progressing 72 townhouses in North Coburg with just eight car spaces. “Less cars, less costs, more incredible housing,” McLeod said. Projects now all but exclude car parks worth $110,000 per space, eliminate second bathrooms and individual laundries in favour of communal facilities, and expose building services rather than concealing them, delivering apartments at $290,000. “We take out ceilings, we expose services. It sounds a little bit Eastern European, kind of grungy,” McLeod said. “But it works. And what matters to our residents is that they watch out for each other.” Lacklustre As a Melbourne office developer, it’s been a tough year for sheBuilt, which had a challenging start to 2025 in a troubled office market. ▲ Michaels turned a South Melbourne landholding into an opportunity to showcase what an all-female team can do in development—a first of its kind. Founder Anne Michaels initially described the year with a two-word expletive before settling on “lacklustre”, pointing to years of accumulated challenges and an office sector struggling to find stable footing “We’ve had very patchy activity in 2025, very fragile sentiment in the market, and I don’t think the market has actually settled into rhythm,” Michaels said. She predicts there will not be any speculative office development in 2026, with planning for new projects unlikely until 2027 and construction beginning in 2028 at the earliest. Michaels recently completed a project with 525 female workers , winning accolades and awards for the development. She remains committed to female-led projects but acknowledges the office sector faces structural headwinds from hybrid work patterns. Melbourne has become a city of TWATs, McLeod said. It’s not an insult, but an acronym—Tuesdays, Wednesdays and Thursdays. “That’s when workers show up to offices, leaving the CBD eerily quiet on Mondays and Fridays,” he said, adding that this is just one of many changes forcing developers to tear up their old playbooks. Help may be on the way Infrastructure costs and tax settings continue to pressure development feasibility, Price said, as challenges with stamp duty, payroll taxes and escalating infrastructure contribution requirements continue to hamper development. At least some help may on the way—or already in place. ▲ The Urban Developer ’s managing editor Taryn Paris (left) moderated the panel at the Melbourne Long Lunch. The Federal Government’s Help to Buy scheme launched in December 2025 after passing parliament in November 2024. The Commonwealth shared equity scheme will assist 40,000 Australian households over 10,000 per year to purchase either a new or existing home with an equity contribution directly from the government. “I think a lot of us are interested in housing first-home buyers at an affordable price, so I think that’s amazing,” McLeod said. While developers are increasingly marketing to interstate investors attracted by Victoria’s comparatively lower rents despite higher development costs, Crema’s sustainability consultancy is expanding interstate with new operations in Perth and Sydney as the company pursues opportunities linked to Brisbane’s 2032 Olympic Games. From problems come opportunity The development sector faces ongoing challenges with capital raising, construction costs and market uncertainty becoming business as usual. What’s needed most for the industry to move forward? Planning certainty. It was a critical theme across the panel. Crema had two highly credentialed sustainability projects rejected at the Victorian Civil and Administrative Tribunal two years ago at Northcote and Kensington East. Both sites remain undeveloped, although her Brunswick project proceeded through Victoria’s Development Facilitation Program pathway. “For us, just having the certainty of approval within a timeframe, just having that certainty to progress,” Crema said. “I think that’s what we all need in this room is a level of certainty.” Still, as McLeod said: “it feels very, very different than what it did in December 2024 … everyone seems to have their mojo back in Melbourne, this beautiful, strange, wet city that I call home. Can’t wait for 2026”.

Momentum Building for Melbourne After a Tough Year

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