In this episode of The Cut, Chris Bergin, Cathro’s Principal in Melbourne, sits down with Julian Heatherich, Director of Commercial Sales at Savills, to discuss the current state of Victoria’s commercial property market.
Drawing on more than 25 years of experience in real estate, Julian shares his perspective on the challenges facing developers, investors and lenders, including rising construction costs, tighter funding conditions and reduced transaction volumes. He also explores why premium assets continue to perform, how developers are adapting through new strategies such as build-to-rent and modular construction, and where opportunities are beginning to emerge.
The conversation finishes on an optimistic note, with Julian explaining why he believes Victoria is nearing a turning point and why today’s cautious market could be viewed as one of the best buying opportunities in hindsight.
Key Points
- Victoria is approaching a potential turning point. While uncertainty continues to slow transactions, Julian believes improving sentiment and future interest rate cuts could see the market rebound quickly.
- Developers are being forced to think differently. Rising construction costs, tighter lending and changing buyer demand are driving greater interest in strategies such as build-to-rent, modular construction and creative development partnerships.
- Long-term fundamentals remain strong. Population growth, limited housing supply and continued infrastructure investment are creating confidence that Melbourne and Victoria will remain attractive investment markets over the years ahead.
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