Archive for May 2026

At the start of this year, there was an expectation that the Melbourne property market may face some challenges. But we don’t think anyone predicted how many different influences there would be.

As a result, we have seen fewer auctions scheduled, more expressions of interest campaigns or private sales with end dates and more off-markets (many of them very over-priced or not great quality).

A lot of auctions have been cancelled, rescheduled or simply not reported.

Price quoting has taken on a new league of its own. Some properties are very over-quoted, some even more under-quoted and others at the range a vendor is prepared to sell. As a buyer, unless you’ve been monitoring prices for the past five years at least (or prior to COVID), this presents a big challenge to establish value (most buyers, on average, buy a property only a few times in their lifetime, so are not regularly monitoring house prices).

Clever vendors employ experienced local agents, as they should. One strategy they sometimes employ is marketing a property higher than the market price to help the buyer think they are ‘getting a deal’ when they pay less than the advertised price. We have seen, however, that the prices paid for some of these properties can still be well above the market, when looking at the broader picture.

Some buyers are waiting until the vendor is willing to accept what they consider to be an abnormally low price before committing. But this can backfire, as once the vendor expectations do change, there are often more buyers interested in the property again, reintroducing competition and often achieving a better sales result.

Property reporting sites are still advertising that clearance rates each weekend are often 70% or higher but we’re not seeing this on the ground.  We are mindful that we tend to track properties above $1.5 million, but our figures are sitting around 30-40% – a very big discrepancy, in our minds. As a buyer, you need to be careful not to drink the Kool-Aid.

Another distortion could be the average medium for suburbs; with less of the better properties being sold, the average selling price is brought down, therefore dropping the medium. This doesn’t necessarily mean the area is going backward and/or prices are dropping, although it does make for a good headline in the media – and buoys the spirits of needy buyers.

Whether the most recent Federal Budget announcement will affect the market is yet to be seen. There is talk in the industry that an owner’s PPR (permanent place of residence) is now the only (currently) safe tax-free property investment. We have always felt there is nothing wrong in ‘living in your money’. No Capital Gains Tax paid there.

This may see vendors holding their properties for longer, or investing more into their properties, as any gain is more in their pocket when they eventually sell.

Even more important now is the decision to purchase well. There are worthy properties to renovate – and others which you simply should not bother.

Yes, there is a lot of stock on the market right now but we would contend a lot of it has serious flaws that are hard or even impossible to address. If you buy one of these properties, you could really pay a big financial and emotional price in the future. Investing in it could also be futile. Many people who ‘panic bought’ during COVID times are finding that out right now.

Historically, each time the market has tightened, we have seen a plethora of homes on the market, many sitting for months trying to sell, while a select few outperform the market.

The good ones in a good market sell and the good ones in a weak market still attract interest and, with interest, comes competition, often still resulting in a strong result.

But the ‘not-so-good’ ones in a weak market really struggle to sell – if they sell at all.

We are regularly seeing homes that were purchased in COVID for very strong prices struggling to sell now. Some vendors have had to accept large financial losses.  2 Queens Square Sandringham sold just after COVID in 2023 for $2.855 million. It was a strong auction. A-grade land with an original clinker brick home ready for a renovation. Building prices soared and the same property was auctioned before Easter with no bids, eventually selling mid-April for circa $2.7 million.

One could say that’s not too bad, given what has happened in the market over the past six months, but it still adds up to somewhere between a $250k and $500k loss.

It’s not just the financial loss on the purchase price either. There was stamp duty in excess of 5.5% on the purchase price, agents fees to sell again, more stamp duty to purchase a new property that doesn’t need the renovation and a whole lot of emotional stress AND this was a good property, with a great location and orientation, no neighbour issues, and good options to renovate.

The vendors were unlucky that:

• they bought in a very strong market;
• building costs soared, at the quickest rates we have seen in our lifetime; and
• they needed to sell in a depressed market.

The vendors were lucky, however, that:

• the fundamentals were good – land size, location and orientation;
• buyers still knew it was a good property; and
• someone still wanted to buy it.

The number of properties on sales platforms such as REIV are increasing, but, as much as there is new stock, there is a whole lot of stock that just won’t sell at all.

The most important thing to do in a market where external factors are unstable, and both buyer and seller confidence has reduced, is to make sure that you’re buying a good property. ‘Cheap’ eventually wears off, and, if you want to sell it, it will be even harder to sell than a good property.

And what is buying well?

We think (and have always thought) it is a property with good fundamentals.

These properties are not going to come up as frequently, and, if they’re fairly priced, they are likely to be competitive, as there are fewer of them on the market for the genuine buyers to buy. As a buyer, you need to maximise your chances of buying these homes and having a strategy is key.

Only a few more ‘auction’ weeks left for the first half of 2026 before the mid-year break. Many vendors are thinking to sell in Spring, which isn’t too far away, but if you are a desperate buyer wanting to buy now, you may need to wait a bit longer still – unless you are prepared to take a risk on a compromised property, as there quite a few of them out there right now.

 

Some of the better properties currently on the market; an architect’s view

26 Wattle Valley Road Canterbury – Désirée Wakim / Hamish Tostevin, Marshall White

27 Central Park Road Malvern East – Justin Long/Fiona Ansell-Jones, Marshall White

68 Sargood Street Hampton – Richard Slade / Jodie Bond, Buxton

 

‘Off-market’ Properties:

• Renovated timber Edwardian, 3-2-1, pool, ~500sqm, Malvern – circa $3.7m
• Modern 3-2-2 townhouse w pool, Malvern – circa $2.1m
• Brick single level Victorian, 3-2-1, Armadale – circa $2.65m
• Modern 5-3-2, ~1,000sqm, pool, Armadale – circa $11.5m
• 2-storey terrace, ready to reno, Domain precinct, South Yarra – circa $2.59m
• Modern 2-storey freestanding 4-2-1, South Yarra – circa $2.8m
• Striking modern 4-3-4, ~208sqm, Como precinct South Yarra – circa $3.9m
• Renovated brick Edwardian, 3-1-1, ~180sqm, Toorak – circa $1.625m
• 80s single level, 3-1-2, south rear, ~450sqm, Kew – circa $1.95m
• Mid renovation project on ~650sqm, Glen Iris – circa $2.0m
• Contemporary single level, 4-2-2, ~660sqm, Kew East – circa $2.35m
• Victorian single fronter, 3-2-2, ~305sqm, Hawthorn East – circa $2.4m
• New home site (stca), 575sqm, west rear w. ROW, Brighton – circa $2.1m
• Front 2-storey TH, 3-2-2, private north garden, Sandringham – circa $1.9m
• Grand project with ~1,225sqm west land, Beaumaris – circa $4m
• 80s 2-storey 4-3-2 near private schools, Brighton East – circa $2.85m
• Project/new home site (stca), 4-2-3, ~670sqm, Brighton East – circa $3.15m
• Large family Victorian, 5-3-4, pool, ~1,040sqm, Thornbury – circa $3.65m
• Art Deco single level 3-2-2, ~450sqm, Thornbury – circa $1.35m
• Two-storey 3-2-2 townhouse near amenities, Fairfield – circa $1.6m
• Renovated 4-2-2, pool, north rear, Bonbeach – circa $1.8m

 

Auction Spotlight:

A pretty timber single level home well positioned to the amenities around Martin Street.  The home is comfortable enough currently, while offering scope to improve over time. The noise carrying from Nepean Highway while out in the garden may deter some buyers.

A reasonable crowd came together to see Stephen Smith head up the Marshall White team on auction day.  While the home had been quoted $3.0-3.2m throughout the campaign, buyer sentiments may have shifted during this time. An opening offer of $2.8m was made, followed by a second bidder at $2.9m. Neither were prepared to raise their offers, and the home was passed in at this level.  At time of publication, the home remains on the market, now seeking $2.995m.