‘Interesting times’ was the catchphrase during and just after COVID. Now the narrative is ‘strange times’. Certainly, there has been many things occur recently where we have shaken our heads and thought, ‘Gee, that is strange’. For example, buyers pulling good offers overnight, after having further thoughts about a property; buyers staying put in their current home because they can’t find a house that suits what they want or need; or houses being overquoted, rather than underquoted

From a buyer’s perspective, here is what we’re seeing in the market.

‘Overquoting’ rather than ‘underquoting’

This has been happening for more than a few months now. It most likely reflects the vendor’s/agent’s initial expectation being well out of step with what the market thinks their property is worth. Unfortunately, having a ‘high’ quote can penalise the seller, as fewer people inspect the open at the start of the campaign, thereby diminishing interest. When/if the quote does get lowered, this can confuse buyers and lessen interest levels, as most buyers have overlooked the offering and moved on.

Less buyers at opens

We’re not seeing as many buyers at opens, possibly because of the uncertainty of the times, rising interest rates, and in part due to the point above.

Fewer people wanting to take on homes that require work

Feedback from agents is that buyers are particularly fussy right now, often over very trivial things. Perhaps they think that the market will continue to fall. Who wants to buy something now when the price could be a lot lower in a few months’ time? A trend for a while now has been buyers’ reluctance to take on renovation or new build construction work. Such costs have gone up considerably in recent years, and this no doubt has had a negative effect on the market. But we contend that for the long-term purchase of a family home, the timing now represents a good opportunity to buy such properties (so long as the ‘unchangeables’ are there, of course – such as position, land size and orientation). Who remembers the line ‘buy the worst house in the best street’?

Auction system not performing that well

As a result of muted buyer participation, agents and sellers are opting for quieter selling campaigns. Perhaps this is seasonal thing – not many properties look great in Melbourne’s winter, and who wants to attend an auction on a cold Saturday morning/afternoon? EOIs, off markets and private sales seem to be a more popular way to sell. Yet the problem with these options is that buyers don’t always feel comfortable in a process that lacks transparency. The media also relies on reporting ‘clearance rates’ – and, if this is low, as it is now, a blanket of negative sentiment is applied to the whole market, heavily influencing buyers and sellers alike.

Most properties starting their marketing lives as off-markets/pre-markets

This is fairly normal, for this type of year, when people are looking ahead to sell in spring but may sell ‘quietly’ now at their dream price. We have been through a number of off-markets in recent weeks, and advised of many more than normal. That said, talking to experienced agents in recent weeks, pipelines for August and September are not looking great, so it might be a while before buyers find and buy the right one for them. Such decreased supply will no doubt result in increased demand. Melbourne is still a very good place to live, right?

A lot of large modern period-inspired homes on the market

In Boroondara, in particular, we have seen a huge amount of French Provincial inspired homes (see snapshot below) on the market. Generally, we would see 5-10 of these homes for sale at any one time, but at the moment there are 40-50. In our view, the market can’t support this volume of similar stock, and it will be interesting to see how many of these remain for sale at the end of the year. After all, we do have a housing shortage.

A sample of these types of houses on the market at the moment, there may be more off market.

Multiple factors may be influencing this large volume, such as rising interest rates, increased land/vacancy applied taxes, reduction in immigration and the flow-on effect from the 2024 closure of the Business Innovation and Investment Program – 888 Visa).

Increasing buyer sensitivity around price

Properties are selling, yet the market is very sensitive towards price. Simply put, if a vendor’s product does not look like it represents good value to buyers, they are likely to remain an owner rather than a seller.

So where does that leave us? The market now takes its usual midyear break in July. But even if global events such as the Iran/US war subside, there are some local headwinds coming up for the rest of the year. These include new AML (Anti-Money Laundering) legislation, possible changes to the price quoting system in Victoria in October, possible interest rate hikes, and a state election at the end of November.

With less quality stock selling, statistics are naturally skewed to lower prices for the suburbs. This doesn’t mean the market has gone down, just that the better quality stock has not been sold. It’s easy to be persuaded by a media narrative of doom and gloom and prices crashing, but, from what we’re seeing on the ground, the reality is different. Good properties are still hard to buy.

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

24 Glendearg Grove Malvern – David Volpato/Joanna Nairn, Marshall White

20 Hodgson Street Kew – Paul Richards/May Zhu, Bekdon Richards

1 Park Street Brighton – Michael Derham/NellieJenkins, Whitefox

A selection of current ‘Off-market’/ Pre-market Properties:

• Near new 5-5-2, ~680sqm, pool, Kew – circa $5.15m
• Townhouse, north of the pair, 3-3-2, Kew – circa $2.3m
• Contemporary family home, 4-2-2, pool, ~700sqm, Canterbury – circa $3.15m
• Renovated period, 5-3-1, 3 living, north orientation, Kew – circa $3.65m
• Large, contemporary 5-5-2, ~650sqm, Balwyn North – circa $5.25m
• Period 4-2-1 looking for updates, Balwyn – circa $2.75m
• Fully renovated art deco, 4-2-2, pool, ~660sqm, Camberwell – circa $3.6m
• Fully renovated terrace, 3-2-2, East Melbourne – circa $5.0m
• Freestanding w/board, 3-2-1, fully renovated, Nth rear, Malvern East – circa $2.2m
• Brick Federation 5-3-2, pool, west rear, ~530sqm, Malvern – circa $5.25m
• Contemporary TH 3-2-2, North rear, Malvern – circa $2.1m
• TH w basement, 3-2.5-1, west rear, Prahran – circa $1.55m
• 2 storey brick Victorian, 4-3-4, ~410sqm, South Yarra – circa $3.7m
• 1940s brick 3-2-1, ~330sqm, east rear, Prahran – circa $1.9m
• Brick Edwardian single fronter, 3-1-1, ~180sqm, Toorak – circa $1.65m
• Brick single fronted Art Deco, 2-1-1, Prahran – circa $1.3m
• Renovated 2-storey Victorian 3-3-1, South Yarra – circa $2.3m
• ~860sqm development site (stca), west rear, St Kilda East – circa $2.35m
• Single level Victorian, 3-2-1, ~240sqm, Nth rear, Balaclava – circa $1.75m
• 2-storey, 4-bed family home, school zone, McKinnon – circa $2.65m
• Renovated 90s home, 4-5-3, ~540sqm, Beaumaris – circa $2.6m
• Original home, ~680sqm, reno or new build (stca), Brighton East – circa $1.7m
• 1940s brick on ~720sqm, 3-2-2, Brighton East – circa $2.55m
• 80s family home, 4-2-3, ~630sqm, Brighton East – circa $2.9m
• New home site (stca), ~760sqm north rear, Hampton – circa $2.0m
• Rear renovated villa, 3-2 w. OSP, near park/schools, Hampton – circa $1.65m
• Land w approved plans for two large THs, opp park, Sandringham – circa $2.3m
• New family 5-5-2 home, ~800sqm, west rear, Mordialloc – circa $2.95m
• Californian Bungalow on ~900sqm corner, 3-1-3, Brunswick East – circa $3.5m

Auction Spotlight:

1 Nyora Street Malvern East

• Quoted $2.4-2.6m
• Started $2.4m VB
• Ended, pass-in $2.4m
• Bidders 0

A crisp midweek auction saw about 30 people gather in the formal living/dining area for this unique offering, only stone’s throw from Central Park.

Auctioneer James Tomlinson gave a spirited preamble here – “Buyers asks us all the time what they want – single level, no body corporate, secure lock up garage into the house, north-facing rear – tick, tick, tick, tick – this has it all ladies and gentlemen.” Selling only few ago under very ‘hot’ market conditions for $3.0m, James looked for an opening bid, but when none were forthcoming placed a vendor bid at the bottom of the range. With no takers forthcoming the half-time break was taken then auction re-opened. But still no bidding, and the property passed in. Strange auction – strange times….So why didn’t this sell? Well one theory perhaps is that most buyers looking at this type of product (downsizers) are living in homes they need to sell, yet that market (dated large family homes, often needing update work) is quite cool right now – if they do sell before, where do they go?

57 Shepherd Street Surrey Hills

• Quoted $2.2-2.4m initially, then $1.8-1.9m, then $1.85m
• Started $1.8m VB
• On market $2.0m
• Ended $2.13m
• Bidders 5

A cool late Saturday winter afternoon saw about 50 people attend this auction, and Auctioneer Ming Xu with the help of a strong amplifier gave a good concise preamble, concluding within about 5 minutes. Well done, Ming – there should be more of this! This was a good property; north facing rear, pretty single level timber Edwardian updated inside, over 800m2 of land in the 3127 postcode.  Looking for an opening bid and understanding that none would be forthcoming, a vendor bid of $1.8m was placed. Still no crowd bidding and after a few minutes the half-time was taken.  Once the auction opened back up, it took a while but one bidder provided a $10K increase and the auction was up and running. It didn’t take too long for momentum to build and with the help of two other bidders the auctioneer announced on the market at $2.0m. Enter bidders four and five and the property sold for $2.13m. A solid result compared to the latest quote, yet well under what was originally quoted. A fairly predictable outcome but surely buyers would have been confused along the way here.

24 Balcombe Park Lane Beaumaris

• Quoted $1.79-1.96m
• Started $1.8m VB
• On Market $2.0m
• Ended, $2.16m
• Bidders 3

This 1966 modernist home, designed by architect Peter Carmichael, was commissioned and enjoyed for 60 years by the current vendors. Well maintained in its original form, the home is a testament to the design of the era.  Such offerings always attract crowds in the Beaumaris area, with the agents welcoming over 200 people to the property throughout the campaign. Many also came to the auction, although it took some effort for auctioneer Stephen Tickell to coax out active bidding.  Opening with a vendor bid at $1.8m it took until after the ‘half time’ break for bidder 1 to emerge. A few swift back and forth offers with bidder 2 quickly brought the home onto the market at $2.0m. Bidder two then fell away as a third party put their hand up.  After $2.1m, both parties were seemingly reaching the end of their limits but digging deep to secure the property.  The opening bidder, a couple with a passion for mid century design, was the successful party at $2.16m.  A good outcome we feel – quoted attractively, a realistic reserve and market competition setting the value for a unique offering.

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:

12 Hamilton Street Brighton

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.

The past few weeks since our last blog has seen one of the quickest turnarounds in the market since the Covid market and buyers now feel they are comfortably back in control.

Many agents, particularly this week, have started using the phrase ‘It feels like Covid version 2.0’, after experiencing a major change in both buyer and seller sentiment.

The reasons for this are self-evident.

While in recent times auction clearance rates have been quite normal (i.e. around the 65-75 per cent mark) last week saw a dip to around 60 per cent – a number we haven’t seen since 2022.

Stock levels also were up about 40 per cent from this time last year.

This does not bode well for sellers, but, on the flipside, it is favourable for buyers.

Each weekend, Melbourne property specialists at WoledgeHatt monitor auctions across Melbourne for properties above $1.5 million. The number of houses being auctioned has been steady but what is changing is an increase in the number of properties withdrawn from auction and converted to private sales. Agent quotes are changing quite a bit during the selling campaign and the number of properties selling above the end-quoted range is lessening. Rather than ‘underquoting’, we are more often seeing a trend to ‘over-quote’.

With the auction system faltering, many agents are favouring private sale or EOI campaigns instead of auctions, where it is much easier to hide a high vendor, and/or lack of competition.

The number of ‘off market’ properties remains solid; however, most of these are quite heavily overpriced, with vendors just testing the market and occasionally one or two getting ‘lucky’ with a buyer who pays the price.

The genuine sellers in this group eventually opt for a public campaign if their goal is to actually sell the property.  It can often still get the best price for the vendor.

In times of uncertainty, we believe it is even more important for vendors to consider who they choose to sell their (often) most valuable asset.

Experience counts.

Experienced agents give credibility to the property they are selling. Experienced agents have regular training (often outsourced by professional sales experts). Experienced agents collaborate with fellow workers and have good systems. It surprises us that we frequently see a house for sale with an agent or agency who has almost never worked in the area, and therefore has less understanding of the precinct and location nuances, and less involvement with the buyers in that area. As a result, they usually don’t have a database of passive buyers, who don’t check real estate websites each week but may buy if the ‘right’ home is brought to them.

We feel that buyers think the control in the process has now flipped more into their favour.  Control doesn’t always equate to good decisions. Just because a property may now be bought more cheaply than previous purchased or recently advertised, it doesn’t automatically make it the right property or a good property to purchase.

Just as we think that it is more prudent for sellers to use local, experienced agents skilled at selling their type of property, we believe engaging the skills of an experienced buyer advocate will help buyers work through the increased stock levels and varying quality of homes for sale. You need to trust your emotions when buying a home to live in – you have to like what you’re buying. But what you don’t want to do is make an emotional decision (i.e pay too much, buy the wrong property just because it feels like a bargain etc.).

Many buyers who did buy emotionally during recent Covid times (2020-2021) and have had to sell the home in the past year or so have suffered badly, rarely recouping transaction costs (i.e. around 5-7 per cent of the purchase price, which is considerable) and often lucky to get the new buyer to pay what they did originally.

For now, the ‘public auction’ market will take a pause during Easter, school holidays and the Anzac Day weekend. The next key auction weekends will present in May and the run-up to King’s Birthday weekend. That should provide the next litmus test as to how the market is tracking. Finding the right home and understanding price/value will perhaps be the biggest challenges for buyers. If sellers have a good product and don’t need to sell it, they may decide not to in times such as these.

If you’re looking to navigate these changing conditions with confidence, it’s worth speaking to an experienced buyer advocate to discuss your property goals and make informed decisions in a shifting market.

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

6 Foote Street Brighton – Sarah Korbel/Joel Fredman, Fredman

5 Bell Street Hawthorn – Elsa Liu / Richard Winneke, Jellis Craig

6a Kendall Avenue Elwood – Sam Gamon/Rhianna Hoyle, Jellis Craig

‘Off-market’ Properties:

• Renovated single level period home, 4-2.5-2, pool, Brighton – circa $4.8m
• Single level 4-2-3, corner block, ~780sqm, Black Rock – circa $2.6m
• Period semi attached in Golden Mile, 3-2-3, Nth rear, Brighton – circa $3.9m
• Freestanding TH, 3-2-2, Brighton East – circa $2.35m
• Modern 4-3-2, pool, park access, Brighton East – circa $3.7m
• Large 4-2.5-2, 3 living, pool, McKinnon Sec. zone, Bentleigh East – circa $3.15m
• Updated, brick single fronter, 2-1-0, South Melbourne – circa $1.1m
• Contemporary TH in small group, 3-3-2, downstairs bed, Armadale – circa $2.3m
• Brick Edwardian, 3-1-3, ~410sqm Nth rear, Prahran – circa $2.35m
• 1960s architectural brick 4-2-2, Nth rear, South Yarra – circa $3.1m
• Solid brick 2-1-1, looking for updates, ~610sqm, Kew – circa $2.3m
• Original period home, 3-1-2, ~540sqm, Kew – circa $2.5m
• Timber Period 3-2-2, 2-storey, quiet street, good north light, Kew – circa $3m
• Near new 5-5-3, 2-storey home, ~830sqm, Camberwell – circa $3.15m
• Brick 1920s 5-3-2, pool, ~1000sqm, Camberwell – circa $3.8m
• Family sized TH 4-3-2, ~400sqm, Balwyn North – circa $2.62m
• 2-storey period home, 4-2-2, ~620sqm, Nth rear, Glen Iris – circa $2.75m
• Single fronter looking for reno, 2-1-1, Richmond – circa $1.3m

Auction Spotlight:

5 Thomas Street Hampton

Quoted $2.2-2.4m

Started $2.2m (vendor bid)

Ended $2.5m

Bidders 2

The brick period home positioned within strolling distance to Hampton Street shops, cafes and transport, offers a flexible three-to-five-bedroom options, as well as 3.5 bathrooms, plus a garage and off-street parking. With rain threatening, the 25 plus crowd spread around the northern rear garden, ready to jump inside if need be.  Angus Graham, heading up the Hodges team, started proceedings with a vendor bid of $2.2m, at the bottom of the quoted range of $2.2-2.4m throughout the campaign. Two parties swiftly brought the property on the market at $2.4m, continuing with $25,000 rises.  The second party eventually secured the home for $2.5m.  No doubt both parties relieved to achieve their desired result in a hit and miss market.

8 Henrietta Street Hawthorn

Quoted $3.2-3.5m

Started $3.2m ended, pass-in (sold after for around $3.63-3.69m)

Bidders 2

A very pretty single level brick Victorian home in a convenient Hawthorn location.

In front of about 25 people, Auctioneer Davide Lettieri accepted a $3.2m starting bid from bidder one, then not long after bidder came in with a $50K increase. After the half-time break was taken at $3.35m, some more bidding followed and the property duly passed in at $3.45m to bidder two, who apparently turned up on the day undertaking minimal due diligence, saw the quote and assumed they needed to pay a bit over the top of it.

In a market of limited options, this property stood out as good option to move in to straight away. The big knock on it was the shopping centre carpark next door, and that did have an impact on interest levels and the price of course. The quote we and others felt was a bit ambitious, but the vendor got a bit lucky and sold very well in a market that is tough right now for sellers.

3-6 Findon Crescent Kew

Quoted $2.2-2.4m

Started $2.2m (vendor bid)

Ended $2.55m

Bidders 2

As the rain tumbled down and there was chill in the air, the auction was held inside. Good thing the hydronic heating had recently been installed and was working beautifully as expected. Auctioneer Steven James as always conducted a very professional auction; starting on time, announcing the property on the market at a proper level and communicating clearly. Staring on vendor bid of $2m, two bidders joined in, the property was on the market at $2.4m and then sold for $2.55m. This is the type of property that is still going quite well right now, and probably always will. It attracts downsizers and also those looking for a lock-and leave option. In addition, developers rarely build this type of thing anymore – as to why, we continue to shake our heads. Single level, good location, easy to live in, light and bright, good security, minimal body corporate, etc. Good auction and great result for buyer and seller alike.

Welcome back to the Melbourne property market for 2026.

Since we left off at the end of 2025, there have been quite a few disruptors to the property market: proposed government changes to agent price quoting, rising inflation levels leading to interest rate increases, another round of land tax payments for investors/multiple home owners. These disruptors do affect buyer and seller sentiment, which has resulted in a slow start, as many people are waiting to ‘see what happens’.

If we listen to the agents, there is plenty of positivity surrounding buyer activity.  Attendance numbers at opens has been solid both on weekends and mid-week – we have witnessed this ourselves – but how many viewers are actual live, hot buyers?

Whether these solid attendance numbers translate into strong clearance rates is yet to be determined, with the first of three big weekends commencing next weekend.

Big auction Saturdays at this stage look to be February 28, March 7 and March 28. April is looking messy, as it is obstructed by Easter at the start, school holidays in the middle and then Anzac Day at the end (which actually falls on a Saturday this year – not ideal for sellers).

Last year, we noted certain councils within Melbourne performing better than others, with some council areas less affected by interest rate rises than others. Certainly, there seems to be a continuing influence of Chinese money helping buyers (often second and even third generation Australians) in Boroondara to pass on a different kind of generational wealth than we have seen in other blue-chip areas, such as Toorak and Malvern, over many decades.

For some other inner-city suburbs, such as Fitzroy North, Northcote and Beaumaris, interest rate rises have more of an impact on buyer sentiment. Buyers in these areas tend to have large mortgages, with less help from the ‘bank of mum and dad’.

We don’t think this means we will see less sales this year, or buyers not wanting to buy, but we do think the market may be more ‘transactional’, meaning if a vendor wants to sell, there will be buyers around ready and willing to buy; however, if a vendor wants a certain price, then, unless the property is exceptional and scarce (in the local context), they may find themselves disappointed, with an unsold house.

With changes to the rental regulations coming into force over the next two years, along with rising land tax fees, we also expect to see an increase in ex-rental properties coming onto the market. How these will fare could depend on whether buyers become more open to the idea of renovating and updating.

Since the updated, ‘codified’ building regulations came into effect late last year, we have noticed firsthand (from planning applications we have been involved with and talking to peers in the design/planning space) that the time frame for approval has been cut significantly. The benefits of this include cutting holding cost times, and objections that may have once tied up an application for months, or even years, if there is no legal ground for the objection, are working through the application process with no additional down time. For applicants, this is valuable, providing certainty and confidence and helping minimise risk.

Another interesting observation we have noticed is that information pertaining to past sales results and vendor information stored in sales data programs such as PDOL are slowly being removed from the system. We are not sure whether this is by accident, or part of a new plan to make it harder to find the sale history of a property. If this trend continues, could it make it harder for buyers to determine value?

So where does that leave us for the first quarter of the year?

We expect not much change from the end of last year. Clearance rates may continue to be published in the 70% or even 80% ranges. But knowing how many properties each weekend that go to auction are withdrawn from the counting process, more often due to lack of interest, we think a more realistic view will be around the 55-65%. This indicates a generally healthy, quite balanced market.

The challenges in buying the right property for buyers will continue, particularly if they have little experience doing it. Vendors have selling agents to help them but the key question for buyers remains – who have you got in your corner?

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

 

38a Essex Road Surrey Hills – Peter Vigano/Leo Siragusa, Jellis Craig

10 Union Street Armadale – Jack Richardswon/Luca Pignalosa, Abercrombys

16 Gray Street Brighton – Halli Moore/Owen Bowdich, Buxton

17-19 Lang Street Beaumaris – Stefan Delyster/Romana Altman, Buxton

‘Off-market’ Properties:

• Renovated Queen Anne 5-3-2, pool, ~1500sqm, Camberwell – circa $7.75m
• 2-storey Californian Bungalow, 4 bed, ~745sqm, Camberwell – circa $3.3m
• Brick 2-storey family home, 5-3-3, ~670sqm, Camberwell – circa $3.15m
• Near new 2-storey 5-5-3 family home, pool, Kew – circa $7.75m
• 3 bed townhouse near amenities, Prahran – circa $1.45m
• Brick Edwardian w plans to extend, Prahran – circa $2.4m
• Renovated single fronted brick Victorian, 3-2, Armadale – circa $1.85
• Art deco 3-1.5-1 home near amenities, Balaclava – circa $1.85m
• Renovated Californian Bungalow, 4-2-2, Brighton East – circa $2.3m
• 4-3-2 townhouse near parks and schools, Hampton – circa $2.3m
• Edwardian, single level, 3-1-1, prime position, Sandringham – circa $2.25m
• Development site ~840sqm w. 18m frontage, Beaumaris – circa $2.0m

Auction Spotlights:

36 Hunter Street Malvern

A good crowd of over 60 people came out to watch the auction at 36 Hunter Street Malvern.  A pretty, single level, timber Federation home, with covered off street parking ticked a lot of boxes for prospective buyers.  The home was being quoted $3.1-3.4m.  Daniel Wheeler headed up the Marshall White team and was made to work hard for anything to start.  Looking like it was going to pass in on the opening $3.1m vendor bid, suddenly two buyers put their hands up, trading offers to steadily to bring proceedings to $3.4m.  After a chat to the vendors, the bidding was reopened, receiving a more cautious response from the buyers. Slower $10,000 bids eventually brought the property on the market at $3.45m, then selling to the opening bidder for $3.5m.  A fair result for the offering.

57 Potter Street Black Rock

A sympathetically extended and updated single level art deco weatherboard home. It’s size and configuration, made it an attractive proposition for “younger downsizers”, not quite ready to part with the benefits of a full block and keen on a double garage.  Mark Earle’s first auction of the year, started with a pleasant genuine bid of $1.9m (in the middle of the quoted $1.85-1.95m).  Again, two bidders were vying for the property; bidder 1 steady and strong, bidder 2 keeping things varied and unpredictable.  After quickly exceeding reserve at $1.98m, both parties were clearly hurting by the $2.1m mark, with the home eventually selling to the opening bidder for $2.13m.  A solid result for the property.

2025 has been a very different type of year for not only real estate, but the world in general. Off the back of the 2024 US election, the year started in a measured way, as a delayed federal election (taking place in May) saw a reduced number of properties on the market, as people waited to see what transpired. Once this passed, we moved into winter, a period of the year where the market always tends to slow down.

Things did pick up in August and September, rolling into solid numbers for October and November and is finishing now with a flurry of last minute activity.

Whilst clearance rates were reported as high through the Domain and REIV portals (often around 70-80%), we believe these stats were not telling the complete picture, due to a high number of delayed or unreported auction results. An average home – B or C grade – that was not priced well was hard to sell; in many cases, these homes remain unsold.

Some observations for 2025:

Influx of investment properties

As changes to Land Tax regulations filter through, we have seen more investment properties hit the market. Over the past few years, the rising costs associated with owning an investment property have increased disproportionately to rental payments. Higher interest rates, annual increased land tax bills, council rates, insurances, compliance costs associated with new minimum standards and annual and bi-annual safety checks are eating into (and often now outweighing) any potential capital growth gains.

For many investors, the numbers no longer stack up. In some ways, this has been good for the market, as it has helped with supply, but it is causing a depletion to available rentable stock. We believe home buyers need to be especially cautious in buying such properties. Whilst regulations have meant they need to have heating/cooling/blinds etc, bigger ticket items such as re-stumping, gutters (rusting out due to lack of cleaning), rotting weatherboards and other painted surfaces failing, etc., have often not been maintained. We think a building inspection on such properties is a must.

Planning changes

The de-codifying of the planning process has seen many changes, such as:

In addition, much of the second half of the year has been spent discussing new zoning regulations and height controls around many established, south-eastern suburbs.

We are still waiting on clear information and confirmation around zones and height limits, but it has certainly created a degree of alarm and concern to existing residents.

Whether these changes will actually have any immediate impact on suburbs will depend on developers being able to buy/obtain the land and build the properties at a price that is profitable for them (as building costs have not gone down) but also a price that buyers are prepared to pay to live in these smaller properties.

Downsizer demand

Often, we are working with downsizers who are prepared to move into apartments, but we’re not sure the developers are building what buyers want. Many downsizers spend more time at home (not less) because of age and/or health restrictions.  Frosted windows, narrow balconies and limited or no natural light is not conducive to a healthy environment. Multiple bedroom/bathroom combinations are perhaps not as important as good sized (and multiple) living areas. And it is really important to get the style and building typology ‘right’ for the area. What works in the inner north doesn’t necessarily resonate with the market in the inner east.

Price quoting

Quoting has remained a topic of contention, with the government, proposing a ‘reserve reveal’ date, seven days prior to any auction dates or fixed date private sales (ie expressions of interest) campaigns. Whilst on the surface some may think this is a good idea, there are two parties to a transaction and some consideration needs to be given to the vendor and what is in their best interests, particularly given they are the ones paying for the agent to sell the property, and get as much money as they can for what is often their biggest financial asset. Should the new reserve disclosure rules come into play, we may see an end to, what is still, the most transparent way to buy property in Melbourne.This is likely to lead to more ‘smoke and mirror’ processes and even more confusion for buyers. Or worse still, the death of the auction system in Melbourne.

We believe there is a simple solution that would eliminate confusion, uncertainty and conflict. Agents should only be able to work for one party – a selling agent should represent vendors exclusively and a buying agent should represent buyers exclusively.

Very clear, very simple. That way each party is acting, exclusively, in their clients’ best interests.

Interest rates

It seems the direction of interest rates will remain uncertain as we head into the new year, adding more stress for some vendors and buyers.

New regulations

Next year will also see the introduction of new ‘anti-money laundering and counter-terrorist financing’ regulations. The responsibility for managing and reporting will fall on professional services including real estate agents and buyer advocates, adding another lay of complexity to the transaction process. We are still learning whether, or how, this may impact buyers and sellers.

Where to from here?

With the year closing in, many agents are signing off early, with Saturday their final auction weekend before commencing an extended break for summer.

Looking forward, 2026 should commence well. We hope to see good stock levels for both February and March, with the first campaigns kicking off on or after the Australia Day weekend.

As we wrap up our Market Pulse for the last time this year, we note some of the difficulties for all participants in the market and hope for a less tumultuous year in 2026.

For buyers, the events of this year have added greater complexity to a property market that is already heavily weighted in the vendor’s favour.

If 2025 hasn’t resulted in the purchase success you were hoping for, consider engaging the services of a buyer advocate in the new year. Look for one that is independent and works exclusively for you, the buyer.

Thank you for reading and following us this year. We appreciate the support.

Our offices will be closed from Friday 19 December 2025, re-opening on Tuesday 20 January 2026.

We wish you all a Merry Christmas and a happy and safe holiday with your family and friends.

‘Pre-market’ or ‘Off-market’ Properties:

Auction Spotlights: 

37 Denham Street Hawthorn

Quoted $4.5-4.9m

Started $4.825m

Ended $5.8m

Bidders 4

A wet and cold December morning meant this auction needed to be held inside; luckily this home had good-sized front formal rooms to accommodate comfortably a crowd of about 80 people. On offer was a solid Italianate Victorian home with reasonable volume and good covered parking – north facing rear, opposite St James Park. House is very livable for now, but would benefit from renovation down the track. Auctioneer Doug McLauchlan conducted the auction really well (experience counts!), facilitating offers from 4 bidders. The auction opened at $4.825m, was announced on the market at $5.075m then ultimately sold for $5.8m. A strong result, but such good offerings do not come along too often and the market responded accordingly.

24 Glendearg Grove Malvern

Quoted $6.0-6.5m

Started & passed in $6.0m VB

Last purchased in very original condition in 2022 for $3.4m, this brick Edwardian has been entirely transformed. The original rooms have been retained and restored at the front, with a modern 2 storey rear replacing the old. A pool has also been added, alongside the garage accessed from the rear ROW (this perhaps a little tight).

While many observers crowded the open plan rear as the rain fell outside, it seemed no one was prepared to truly participate in the auction.  David Sciola started off proceedings with a vendor bid of $6.0m and that’s where it stayed.  Although the renovation was all encompassing and visually stunning, perhaps an example that if you don’t get a renovation spot on, people may not pay what you are after to cover your costs (and more).

With clearance rates being quite high over recent weeks (according to REIV stats – 82%, 84% then 83%; Domain stats – which tend to include more unreported sales – 67%, 69%, then 70%), the market in Melbourne has been strong, with demand considerably outstripping supply.

Despite recent rises to fees and taxes, foreign investment into Melbourne climbs. The population growth is strong, the economy is diverse and the investment by the government in local infrastructure remains high. Compared to Sydney, Melbourne is a relatively cheap alternative.

While Melbourne has posted four consecutive months of home price growth in 2025, not everything is selling well. In order to sell, the property needs to be priced right, and vendor expectations need to be realistic.

As a buyer, how do know if a property you are looking at is going to have strong competition? How far are you going to need to stretch? And what is the property’s ‘true worth’?

While not an exact science, key indicators to look for include:

• very large numbers at the first open for inspection.
• the property is being sold by a very experienced selling agent and agency in the area.
• multiple building inspections have been sought, and contracts have been issued.
• The property has been held for a long time – this often illustrates the home has been a happy one, set within a good street / neighbourhood.
• advertising brochures have run out!

What is ‘hot’ right now:

• Turnkey, well-located family homes, particularly those that have been held for a long time.
• Single-level downsizer homes, which are not too dated or part of mews arrangement, and have minimal or no body corporate element.
• Land in inner-eastern established areas (Boroondara, Monash, Whitehorse), which are not affected by heritage overlay (ie less restrictive to build on).
• The first home buyer market (buoyed by recent initiatives).

What is ‘not hot’ right now:

• Dated single-fronted period homes (construction costs remain high, builders are hard to find, numbers not stacking as they once did).
• Large, recently completed spec-home family homes In Balwyn (oversupply?)
• Townhouses (particularly in the Bayside area) – oversupply/quality/rising body corporate fees).
• Properties that are close to or part of recently designated government local activity zones – people are concerned about rapid change, congestion, overshadowing etc. which may affect current amenity.
• Dated apartments (work ahead, rising body corporate fees, supply exceeding demand)

Trends we are observing right now:

• More EOI campaigns (particularly in the Bayside areas, where key buyer numbers are limited, vendor expectations altruistic and agents can use a less transparent ‘smoke and mirror’ selling strategy.
• Rising numbers of pre-market off-market offerings (as vendors who have decided to sell next year try to ‘snag’ a hot buyer – typical and we see a bit more of this late November / early December.
• Properties that have not sold this year ‘remaining on the shelf’ as vendors remain steadfast in their search for the key buyer. Unfortunately for such vendors, most buyers see such properties as ‘damaged goods’ and, unless the price is revised significantly, the home will be unlikely to sell.

Weekend highlights:

Next week the market takes a mini pause for the Melbourne Cup Weekend. The next big auction weekends look to be November 15 (already strong numbers of listings are committed for that date), and then November 22 and 29 should also be quite popular.  A good number of the homes sold hereon will be representative of people who have recently bought, so hopefully that should give buyers confidence that the vendor expectations will be realistic. But having to beat competition could be the real test. As a buyer, are you prepared to wait another 4-6 months (say) until the market returns in earnest in 2026?

Some of the better properties going to auction 15 November; an architect’s view

10 Crisp Street Hampton – Robin Parker/Tas Bartels, Marshall White

54 Maitland Street Glen Iris – Carla Fetter/Aylin Demir, Jellis Craig

62 Empress Avenue Surrey Hills – David Banks, Joyce Liu, Jellis Craig

Off-market / Pre-market Properties:

• Single level brick Victorian, 5-2-2, pool, ~780sqm, Hawthorn – circa %5.25m
• Timber Period home, 3-2-2, good north light, Hawthorn East – circa $3m
• Contemporary 4-2-2 family home, ~760sqm, Surrey Hills – circa $4.1m
• Corner brick home, 2-2-1, ~380sqm, Camberwell – circa $1.5m
• Clinker brick, 4-2-2, ~770sqm, Balwyn North – circa $2.6m
• Period brick home with HO, ~940sqm, dated reno, Toorak – circa $8.5m
• Large period brick home, no HO, ~1000sqm, Toorak – circa $12.5m
• Brick single fronter, renovated, 3-1-0, Armadale – circa $2.1m
• Renovated brick Victorian, 3-1-0, ~250sqm, Armadale – circa $2.1m
• Brick art deco semi attached, 2-1-0, ~210sqm, Prahran – circa $1.8m
• Mid-century, immaculate original condition, 3-2-3, ~440sqm, Caulfield North – circa $1.9m
• Contemporary 5-4-6 family home w basement, pool, Brighton – circa $7.25m
• Tuscan inspired townhouse, 4-3-4, basement, Brighton – circa $2.9m
• Contemporary 3 storey w lift, 3-2-2, water views, Hampton – circa $4.7m
• Large timber family home, 5-3-2, pool, ~700sqm, Beaumaris – circa $2.4m
• Edwardian brick double fronter, 5-3-2, Albert Park – circa $5m
• Double fronted Victorian, 3-2-0, ~240sqm, South Melbourne – circa $1.7m
• Pretty timber period home, 2-1-1 on ~270sqm, Northcote – circa $1.25m

Auction Spotlights:

8 Elgin Street Hawthorn

• Quoted $2.8-3.05m
• Started and ended $2.85 VB
• Bidders 0

A good single level period home in a good Hawthorn location.

One of the first auctions in a very busy Melbourne auction day. A reasonable (mainly local) crowd of about 50 people gathered as Auctioneer James Tostevin conducted proceedings.

Front and rear parking, north light and an adaptable floor plan with a pretty period facade are the pluses, but internally the feel is not that warm, and the property was not that well maintained in places. Flow is a bit tricky and original proportions a little distorted. This auction wasn’t a very long one, with James setting the tone with a vendor bid of $2.85m, waited for some bidding (which didn’t eventuate), referred the bid, resumed the auction and then closed the auction without too much fuss. Selling last back in 2023 for $2.72m, vendor expectations were clearly too high here and the quote reflected that. A good example of a recently sold property not selling for much more than it was bought for, due to the market stabilising.

37 Anderson Street Malvern East

• Quoted $1.8-1.925m
• Started $1.9m (crowd bid)
• Ended $2.490m
• Bidders 4

1pm auction and a small crowd gathered for this auction – but there was clearly a buzz here. What was on offer was a free-standing modern home, with a functional floor plan and secure double garaging in a fringe Gascoigne Estate location. The property was on its own title, set within a street not encumbered by a heritage overlay (unlike surrounding areas) and this property had not sold for a very long time, which also helped the agent quote as vendor expectations were very reasonable. Auctioneer Steve James conducted proceedings right on 1pm (big tick) and didn’t have to look too hard for an opening bid as $1.9m was offered by the first bidder. Short fire bidding between two bidders saw the property quickly on the market at $1.95m (second big tick), then a further two bidders ultimately saw it sell for $2.49m. A very strong result, but not totally unexpected given such offerings don’t come along too often, and it is well suited to a downsizer who wishes to remain in the area and not have to pay and deal with body corporate bodies.

38 Hambleton Street Albert Park

• Quoted $3.5-3.75m, $3.6-3.8m
• Started $3.75m (crowd bid)
• Ended $4.0m – Passed In
• Bidders 2

The current vendors purchased a vastly different looking home when they bought 38 Hambleton Street 27 years ago. Reverting to one home from the then two units, as well as peeling back an extra layer of bricks to expose the name “Evelyn” and the beautiful Hawthorne brick façade. While a south rear, the rear extension added celestial windows and uses the full width at the rear to create an excellent living space.

Over 70 people crowded around the front of the home to see Oliver Bruce head up the auction on behalf of Marshall White. A solid opening bid of $3.75m was received, countered by a second party, going back and forth to quickly reach $3.9m. Smaller increments were requested, at first rejected, then accepted. Various calls for “is it on the market?” were also rejected as the level slowly crept to $4.00m.  At this point a break was announced, yet when the team emerged, the home remained below the vendor’s expectations. Bidder 1 was not prepared to offer more, so the property was passed in to the second party.  At time of publication, the home remains on the market, without an adjustment to the published price range.

The third property quarter for the year is over. Recent weeks have maintained healthy clearance rates, and it certainly does seem to be a seller’s market right now. Finals footy will take hold for the next week and once the school holidays finish, the short run into Christmas will be on.

Based on our discussions with agents, we expect volume to remain up. Speaking with an agent in Boroondara, he advised their office stock levels are up about 30% more for the coming October market, compared with October 2024.

Whether the quality will improve is perhaps another question.

Some vendors are expecting A grade prices for B or C grade properties. At the right price, we are sure there are buyers out there prepared to undertake renovations or new builds but vendors who believe a renovation made at the turn of the century (or earlier) is still current need to adjust their thinking. It’s actually 25 years old! Renovation trends, like many things in the modern world, date quickly. For example, black steel-framed doors and windows were popular a few years back, but they now seem out of favour (personal insights of course).

As a result, we have seen some strong results, but also some big misses.

Low quoting has continued to reward vendors, so buyers shouldn’t expect anything to change on the pricing front.

The challenges for buyers right now are real:

Added to all of this is skewed representation. The seller has not only the selling agent in their corner, but it seems, more often recently, also a vendor advocate. As a buyer, who have you got?

Most of the talk over the last fortnight has been the proposed new height restrictions across the Eastern and South Eastern suburbs of Melbourne. While many residents are concerned about immediate changes within their community and how it may affect their properties, privacy and light, some are getting (perhaps prematurely) excited about how much their properties might now be worth.

We also don’t see the price of building (labour or goods) going down in the future, so for projects to stay viable and completed at an affordable price for buyers, land may potentially be the commodity that suffers. If land prices remain or continue to go up, we might not see too much development at all.

Another area of conversation – Home security.  It is as topical and contentious as it has been for some time – properties with tall brick fences (often hard to get through council today) are seen as key selling points.   A real shame for those with beautiful gardens, however, becoming more desired out of necessity, living in Victoria’s crime state.

Moving forward for the remainder of the year, we think the market should be promising for those with a desire to purchase before Christmas.   Buyers should be buoyed by the expected continuing increase in stock for the final quarter of the year and be hopeful that their property hunt will be completed before the end of the year.

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

1/76 Molesworth Street Kew – Robert Le/James Tostevin, Marshall White

112 Darling Road Malvern East – Ari Levin/Jake Sulley, Slater & Levin

60 Shasta Avenue Brighton East – Matthew Pillios/Melissa Grinter, Kay & Burton

‘Off-market’ Properties:

• Single level Victorian, 3-1-0, ~245sqm, Kew – circa $1.35m
• New home site (non contr. HO) ~697sqm, Camberwell – circa $2.4m
• Victorian 3-2.5-0 with modern extension, Hawthorn East – circa $2.15m
• Brick renovated Edwardian, 3-2-0, Windsor – circa $1.7m
• 2 storey town residence, 3-2-2, Toorak – circa $2.1m
• Extended Edwardian, 4-3-2, ~594sqm, Prahran – circa $5.25m
• Fully renovated Victorian w. modern rear, Prahran – circa $7m
• Large family Edwardian, 5-3-2, ~744sqm, Malvern East – circa $5.5m
• Townhouse, 2-storey plus basement, 3-2.5-2, Toorak – circa $3.15m
• Townhouse, 3-2-2, quiet street, Toorak – circa $2.1m
• Townhouse, 2-2-2, upside down living, Albert Park – circa $1.5m
• Brick semi-detached with approved reno plans, ~223sqm, Elwood – circa $1.45m
• Large family home, 5-5-2, pool, Elsternwick – circa $4.2m
• Renovated 2-1-1 apartment, Elsternwick – circa $700k
• Modern family home, 4-3-6 car basement, pool, Brighton – circa $5m
• Contemporary 3-3-4 home w. water views, Brighton – circa $5.75m
• Contemporary family home w. pool & court, 5-3-2, ~1200sqm, Brighton – circa $11m
• Family home, 5-3-2, pool, ~475sqm, Brighton East – circa $2.85m
• Modern 4-3-2 home with pool on ~810sqm, A grade Hampton – circa $7.35m
• Elevated Victorian single fronter, 3-1-1, looking to update, Moonee Ponds – circa $1.35m
• Brick 3-1-2 family home, Rosanna – circa $1.675m
• Basic house / land, Balwyn High school zone, – circa $2.2m
• Renovated single fronted home Middle Park, circa $4m
• Two-storey family home with pool, Surrey Hills, circa $3.5m

The second term has finished nearly as quickly as it started.

It has been quite an eventful couple of months, featuring a federal election, turbulent global politics and warfare, and this has had an impact on the Melbourne real estate market with less activity and supply.

Vendors are holding onto high hopes that the recent interest rate cut will encourage buyers to pay more, just because they might be able to borrow more.

It doesn’t always happen like that and buyers are becoming more savvy. Some properties simply don’t deserve more to be paid for them. The belief that, if a vendor or agent knows that a buyer has more money to spend, the buyer should just spend it to secure a home that maybe isn’t worthy, is just not right.

Key observations this month (which has mainly been a market of off-markets/pre-markets) include:

• Low quoting – it is working for the homes that need money spent on them.

‘A’ grade properties, requiring work, quoted well below market price have sold with good competition at expected price levels. It is important to note that, although they may appear to have sold well above the market, they have really only sold where they should have. It was only a low quote that made them look like they sold well above expectations:

• 1 Kerferd Street Hampton – quoted $2.09-2.39m, sold $2.83m
• 11a Binnie Street Brighton East – quoted $1.15-1.25m, sold for $1.61m
• 37 Northcote Avenue Balwyn – quoted $2.65-2.915m, sold $3.345m
• 5 Madden Street Balwyn North – quoted $3.2-3.5m, sold for $4.21m
• 69 Littlewood Street Hampton – quoted $2.1-2.3m, sold $2.605m

• A number of properties that have failed to sell have been repackaged with a new agent and presented for sale again, often with the same asking price (or more)!
  • 4 Missouri Avenue Brighton
  • 22 Garnet Leary Ave Sandringham
  • 9 Hillcrest Ave Brighton
  • 2 Cosham Street Brighton
  • 29 Shakespeare Grove Hawthorn
  • 57 Beaver Street Malvern East
  • 27 Leopold Street South Yarra
  • 9 Goldthorns Avenue Kew

• The market is awash with a lot of main road properties ideal for development, yet this is not being taken up – possibly due to a lack of development companies in existence and also the planning system is transitioning into a more streamlined process.

Planning and zoning is a topic in the front of many buyers’ minds. A number of suburbs around train stations have been identified to become new activity centres, with significant proposed changes to site coverage and height controls; however, for most, guidelines or details in place are not yet clear on what will or won’t be able to be built.

Homes that have otherwise been in very high demand, due to their proximity to stations and shops, are now vulnerable to some nervousness from buyers, who are not sure how future developments may affect the property.

It may be worth noting that, even with the proposed zoning changes, the properties in these locations will need to be acquired, designed and built. Developing can be risky, especially when undertaking larger scale constructions. Developers will also expect to make a profit.

Development isn’t going away, but hopefully developers will get the design and quality right. Sustainability is becoming a key focus, which is a good thing. But if the dollars don’t stack up at levels buyers are prepared to pay for the completed products, then the buildings may not even get built.

A trend we are seeing in converse to this is the selling of established ‘total’ apartment or unit blocks, which will likely be replaced by one single dwelling. The reason? The unit structure is dated and the rising costs of land tax and compliance costs do not make profit numbers stack up anymore for owners/corporations. The problem with this, as we see it, is a likely reduction in density – for example, three apartments serving three households could be replaced by one. There is also the loss of embodied energy that comes with the removal of existing building fabric that, in the main, really has nothing wrong with it. In our opinion, in the context of discussions around the housing crisis and shortage of homes, this issue is not being discussed enough.

A selection of multi-dwelling properties currently on the market, with the potential to be redeveloped into single family homes.

Moving toward the second half of the year the talk from agents has been all about more stock coming on in Spring.

It will be interesting to compare their expectations with the reality and whether the volume will be more of the generally unwanted, over-priced stock, or whether it will include a variety of family home and downsizer options. From where we see it, there doesn’t really seem any imminent great desperation for vendors to sell.

With increased volume in stock, price will also be tested, because if the number of buyers doesn’t increase to match the increased number of homes, the scales could tip the other way and prices not rise as expected and spruiked by both the media and agents since our interest rate reductions.

For the short term, we hope everyone stays warm, enjoys the school or other holidays and we look forward to a more ‘normal’ second half of the 2025 year. Unlike at the start of 2025, there will be plenty of time and good opportunities for vendors to sell – but will they get the soaring results they are looking for?

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

9 Macedon Avenue Balwyn North – Daiman Kane/Lily Zhang, Marshall White

20 Woodmason Street Malvern – Jack Resic/John Chartres, Thomson

3 Linacre Road Hampton – Jonathan Dixon/Marty Pask, JP Dixon

‘Off-market’ Properties:

• Art Deco, 3-1-3, multiple living ~700sqm, Canterbury – circa $3m
• Renovated single level villa 3-2-2, Glen Iris – circa $1.95m
• English brick 2 storey, 5-3-3, ~1,020sqm, Camberwell – circa $4.0m
• Single level dbl front Victorian, ready to update, Hawthorn East – circa $2.25m
• Victorian, 3/4 bed, 2/3 car, ~600sqm, Armadale – circa $4.0m
• Renovated dble front Victorian, 4-3-3, Prahran – circa $7.0m
• Brick dble front Victorian, 3-1-1, ROW, needs reno, Malvern – circa $4m
• Refurbished brick 3-4 bed Edwardian, ~650sqm, Malvern East – circa $2.5m
• Renovated brick single fronter, 3-1-1, Prahran – circa $1.6m
• Brick Edwardian, renovated, 3-2-2, ~360sqm, Prahran – circa $2.2m
• Extended double fronter, 3-2-0, St Kilda – circa $1.75m
• Renovated brick dble fronter, 3-2-0, Port Melbourne – circa $2.05m
• Renovated 5 apartment full block for investment, Elwood – circa $5.25m
• Large contemporary, 5-3-2, Brighton – circa $3.2m
• Renovated family home, 4-2-2, pool, Mentone – circa early $3m
• Freestanding 3-1-1, brick, well positioned, Hampton – circa $1.3m
• Large 80s brick w granny flat, 5-3-2, ~725sqm, Glen Huntly – circa $2.5m
• Home w plans/permits for new, McKS zone, ~780sqm, Bentleigh East – circa $2.25m
• New 32 square TH, 4-3-1, Bentleigh East – circa $1.69m

Sales results for the second term have been hit and miss. For as many that have sold strongly with multiple bidders, there have been as many (or more) that haven’t.

With such an interrupted quarter, many vendors have made the decision to wait until August (after the winter holidays are over) to sell. The general sentiment from agents across Melbourne is that stock levels will be strong in Spring. That said, there will be plenty of buyers too. We think this could lead to a more ’balanced’ or normal market, but buying the better homes in the better areas could be as difficult as ever.

The current market is very price-sensitive, and the initial agent price quote is an important element. It is an integral part in determining early interest and how a campaign may travel. Even if the home ticks all the boxes and is selling in isolation (with no other similar homes competing for buyers), if the quote is wrong, the buyers may miss considering the property all together.

As is quite normal for this time of the year, when weather conditions are sub optimal and gardens do not present in their best light, most homes currently on the market are ‘B’ graders.  Some of them could become ‘A’ graders again, with some love and attention, and a good renovation plan. But high building costs remain a big obstacle for many to do this work. This is not impossible , but being patient (i.e.save for a few years to do the required works) and/or open minded – i.e. do you really need a home with abundant storage or can you simply live in a different way (ie more streamlined/organised, with less furniture clothes, toys etc).

Other properties, at their asking prices, just don’t make sense. They remain on the market until such time as the price range is lowered and the market then re-engages. Oddly enough the property will ultimately sell at a price lower than what it possibly could have.

A number of homes on the market currently have found their way to the market as ex-rental stock. This is often because compliance costs and taxes have become too burdensome for owners, and/or a lot of the homes have been long-term family properties where vendors have either passed away or become too old to remain in their property any longer.

Walking through a number of these homes, it can be quite confronting to see how some people have lived in their final years. Many homes need repairing or maintenance, they can be draughty, cold, damp and often have original features (even bathrooms and kitchens). It seems to us that many ‘newer’ homeowners don’t understand that homes require ongoing basic maintenance. This includes simple things such as cleaning gutters, maintaining gardens, painting timberwork every seven years … the list goes on. As a homeowner, if you don’t do these tasks (or pay for them to be done), you will likely pay a heavier price down the track.

So when is it the right time to downsize?

Often by the time someone needs to downsize, it is already too late. Selling and moving can be one of the most stressful times in a person’s life.  Trying to do it when your health is also failing is usually too overwhelming for vendors. Big decisions need to be made, and you mental fitness is key to handling it all.

Preparing a home for sale, particularly if it has been lived in for 20 years or more, requires enthusiasm and stamina to work through life’s collections. This is not easy.

Many downsizers also assume that if they are downsizing their house, they will also be downsizing the price of their next purchase. It is, after all, most likely to be a smaller property!

Good planning is the key to good outcomes. Getting an accurate understanding of what your house may be worth, as well as looking at how much is required to buy back in, will help for a smooth transition.

The process also takes time; lack of time can put pressure on price and presentation if it becomes the determining factor when downsizing.

Of course, everyone’s timing is different and what may make sense for someone in their 60s may still be a decade or more away for another. What we have seen, more often than not, is that once in your 80s, the process seems almost insurmountable and can overwhelm even the most healthy downsizers.

Moving isn’t always the answer either.  The family home could still be the best choice, depending on its size and condition. Stamp duty costs (for a move) could pay for a lot of gardeners, cleaners and food if your current home is suitable. Being comfortable in your house, knowing that it can provide the modern comforts for easy living and a safe environment, is key.

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

40 Claremont Avenue Malvern – John Morrisby, Jellis Craig

45 Mary Street Hawthorn – Désirée Wakim, Marshall White

33 Margarita Street Hampton – Jenny Dwyer, Belle Property

‘Off-market’ or ‘Pre-market’ Properties:

• Updated double fronted Victorian, 4 bed, pool, Kew – circa $3.4m
• Renovated 2-storey, Edwardian single fronter, 3-1-1, Malvern – circa $1.8m
• Brick Edwardian, 4-2-2, ~650sqm, Malvern East – circa $2.5m
• Modern TH, 3-2-2, internal lift, Malvern – circa $1.7m
• Renovated family home, Grace Park Hawthorn circa $10m
• Single level 4-2-2, ~650sqm, updated in parts, Malvern – circa $3.7m
• Brick attached single fronter, 2-1-1(small), Prahran – circa $1.4m
• Brick freestanding double fronter, 3-2-2, Windsor – circa $1.5m
• Freestanding single fronter, 2-1-2, looking for reno, Prahran – circa $1.5m
• Victorian Terrace (end of row), NW rear, 4-1-1, Albert Park – circa $3.5m
• 1940s clinker, fully renovated, 2-1-1, Port Melbourne – circa $1.55m
• Contemporary TH, 4-2-2, ~374sqm, Caulfield – circa $1.9m
• Warehouse conversion Hawthorn – circa $3m
• 2-storey period home with good garaging, renovated Mont Albert – circa $3m
• Solid brick, 2-1-2, or ~690sqm new home site (stca), Bentleigh – circa $2.3m
• Beach Road new home site, ~560sqm, Hampton – circa $3.3m
• Modern townhouse Malvern circa $1.7m
• Renovated single level, 4-4-2, ~481sqm, Brighton – circa $2.8m
• New home site, approx. 590sqm, south rear, near beach, Brighton – circa $2.8m
• Period TH, prime location b/w Church St & Beach, 3-2-2, Brighton – circa $1.6m
• Contemporary 3-2-2 TH, north rear, near beach, Hampton – circa $2.1m
• Dated home in a quiet court location, 650m2Kew, circa $2.6-2.8m
• Boutique apartment, architect designed Kew circa $4.5m
• 2-storey mid century architectural home, 4-2-3, ~690sqm, Beaumaris – circa $2.1m
• Single level mid-century home, large land, Deepdene, large land circa $6m

Auction Spotlight:

This offering was always going to appeal to a large group of buyers.  Those looking for a sold functional home (original 80s style) that could accommodate a growing family and be worked with over time.  Others likely saw the north rear, flat block in prime position to some of Bayside’s nicest beaches as the ideal opportunity for their dream new build (stca).  The home had been quoted $2.05-2.15m during the campaign and was well attended at opens.

Rod Richardson headed up the Belle Property team. An opening bid of $2.15m brought on swift bidding to bring the home on the market at $2.25m. A 4^th, 5^th and 6^th bidder joined in at various points, with three parties still in the game at $2.4m. The eventual successful party at $2.405m should feel comfortable in the social proof of the commitment at this level.