The pick-up in sales might signal nascent recovery but inflation remained a big problem for buyers, said Kelly. It could offset the benefits of stage 3 tax cuts and result in borrowing capacity for low- to middle-income households being reduced by 5 per cent.

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“We’re seeing that impact particularly with first home buyers who are disproportionately affected by elevated interest rates,” he said.

Rory Costelloe, whose company Villawood Properties builds housing estates, said high construction costs were limiting developers’ ability to discount lots, although there were signs the pressure was easing. “You can’t discount to meet the market much as the cost of construction is so high,” he said.

Land developers must build all the ground infrastructure – roads, sewerage, electrical conduits – before handing over lots to customers. “There are some signs builders are bringing back prices, too, because there’s less work ahead and it’s becoming more competitive,” Costelloe said.

Another developer, Satterley Property Group founder Nigel Satterley, said Victoria’s population was growing by 190,000 a year, and Melbourne was the top destination for migrants.

“The biggest [category of] immigrants coming into Melbourne are Indian families, No.1, followed by New Zealand families, and they all want freehold house and land. It’s the No.1 market in Australia by a long way,” he said.

Satterley sees a “soft recovery” unfolding in the city’s mushrooming outer suburbs in late 2025, but “the recovery will be slow”.

When Thasarathan and Alphonse’s home is finished next year, the resulting mortgage payments will double their weekly outlay – an impost the couple believe is worth bearing. Unsurprisingly, they want some reprieve from the Reserve Bank. “We are hoping interest rates will drop,” Alphonse said.