PHOTO: Merrifield is one of Melbourne’s largest mixed-use developments. 

New home buyers who purchased Melbourne housing lots at the peak of the market are scrambling for cash to settle their contracts or risk defaulting due to valuations coming in tens of thousands of dollars below what they agreed to pay 12 to 18 months ago.

The valuation shortfall comes as Melbourne lot prices start to fall sharply, after surging 30 per cent in 2017 to new highs of over $350,000, and as sales drop to well under 1000 a month, forcing developers to offer incentives and cash rebates to attract buyers.