It seems like 2025 commenced only a few weeks ago.

It has, however, been a long first quarter as far as real estate goes. Because Easter has fallen so late in the year, we’ve had 10 weeks of almost uninterrupted campaigning. There has been plenty happening and most selling agents we have talked to have enjoyed very profitable times.

With Saturday our last ‘big’ auction weekend, it will quieten down quite significantly as agents, vendors and buyers alike head away for the school holidays and the Easter break.

The past two weeks has seen the property market turn from a public (or auction) market to a private or ‘off market / forthcoming’ market, whereby properties are quietly for sale. While many of these are just testing the market, there have been a few gems among the options.

How has the Melbourne market tracked this year?

Overall, we feel the first quarter was a stronger version of the end of 2024.

What has not gone so well are properties needing serious renovation (particularly if they don’t have other good fundamentals such as land size, location and orientation), dated villa units and apartments.

That said, the market has been very strong for good properties. Some good examples in recent weeks:

There has been a lot more stock on the market this quarter with a reasonable amount of ‘good’ stock. That is, stock that a majority of buyers are looking for – the single storey downsizer, ready to move into family home, etc.

What buyers believe to be a good property is continuing to evolve. The most fought over properties at auction were once the properties often recognised as ‘the worst house in the best street’.

What we mean by that is a property with good fundamentals such as generous land size, good orientation, in well located precincts of suburbs close to amenities. These properties, whether the home was new, old, needing cosmetic renovation, major renovation or a new build site attracted multiple and often frenzied bidding from buyers.

Now, given the unknown factors and high building costs to build or renovate, the demand has lessened. And perhaps for the first time ever, there are many ‘unrealised’ or unbuilt projects out there.

If, however, the property has been recently renovated (ie move in, nothing to do), in an A grade location, the demand from buyers has actually intensified.

What do we expect for the second quarter? With so many uncertainties ahead, such as the Federal Election, wars ongoing in Gaza and Ukraine and unknown effects from the new Trump global tariffs changes, we may start to see the market falter a little as we head into the second quarter.

The tightening of rules for overseas buyers also came into effect on 1 April, making it, on the surface, harder for non-residents to purchase. That said, most buyers live locally, so is this really going to have much of an effect? Perhaps the big change for slowing foreign investment happened a few years ago when the Australian Golden Visa program ended. Whether this will slow demand in suburbs where demand has been high (eg Balwyn North, Kew, Toorak etc) is yet to be determined.

Buyers are also becoming frustrated with expression of interest and smoke and mirror campaigns. Quoting among agents is erratic. Some agents are more accurate, some can be hundreds of thousands off the mark, while others are narrowing quote prices down to within a $20,000 to $30,000 range, yet the vendor is nowhere near that price, making it even harder for buyers to work through values, particularly if there is no transparent competition.

We have noticed, however, that buyers are prepared to bid and pay strongly if the property is good, although nearly all of them would still prefer to do it under transparent conditions.

In the blink of an eye, it will be the end of the financial year, where there are expected to be further changes that could affect the market. There are the proposed changes to planning laws and who will be in charge, with the State Government taking back control from the local councils, with the goal to make it easier and quicker for applicants to design and build.

In the meantime, for those who celebrate, Happy Easter, enjoy the holidays and we look forward to an interesting second quarter of real estate.

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

9 Goldthorns Avenue Kew – Mike Beardsley , Jellis Craig

24 Clarence Street Malvern East – Kevin O’Brien, Jellis Craig

184/85 Rouse Street Port Melbourne – Ben Bongiorno, Marshall White

A great house to renovate – an architectural concept:

1 Linda Crescent Hawthorn – Chris Barrett / Nikki McCarthy, Marshall White

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

• Victorian single fronter, freestanding, 2-1.5-1, renovated, Prahran – circa $1.5m
• Brick Victorian 3-1-1, ~165sqm, Prahran – circa $1.8m
• Contemporary 2 storey family home, 4-3-2, Armadale – circa $7.0m
• Edwardian 3-2-1, ~350sqm, Windsor – circa $2.5m
• Victorian single fronter, 3-1-0, Fitzroy North – circa $2.0m
• Contemporary family home, 4-2.5-2, ~900sqm, Surrey Hills – circa $3.3m
• Californian Bungalow on good land, 4-2-2, Hawthorn East – circa $5.0m
• Modern apartment 3-2-2, sweeping views, Hawthorn East – circa $2.2m
• Two-storey, Californian Bungalow, 4-3-2, ~625sqm, Kew – circa $2.8m
• Hawthorne brick Victorian, 4-3-2, ~880sqm, Brighton – circa $4.9m
• Renovated brick single level Edwardian, 4-2.5-1, Brighton – circa $4.9m
• Contemporary 2 storey with bungalow, 4-2-2, Brighton – circa $2.3m
• Near new Hamptons style TH, 4-3-2, near amenities, Hampton – circa $3.1m
• 2-storey apartment, some water views, 3-3-2, Sandringham – circa $1.35m
• New home site in iconic street, 470sqm, south rear, Sandringham – circa $1.5m
• Renovated villa, 2-1-1, north rear, small group, Beaumaris – circa $800k
• New home site or dated 4-2-2, Bay Views, ~780sqm, Beaumaris – circa $2.4m
• Modern family home, 4-2-4, ~600sqm, Caulfield South – circa $2.9m
• Renovated Edwardian, 5-3-2, pool, near amenities, Elwood – circa $4.5m
• Fully renovated brick period home, 3-2-1, St Kilda – circa $2.0m
• Extended and renovated Victorian 3-2-2, St Kilda East – circa $1.8m

Auction Spotlights:

27 Oak Street Hawthorn

A scattered crowd of about 30 people gathered for this auction which was conducted by Peter Vigano of Jellis Craig. On offer was a renovated period home, located on good land in the perfect part of the hill, with prized northern-rear aspect. Peter gave a concise preamble and then turned to the crowd for bidding, which were not forthcoming at all. Three vendor bids of $5.0, 5.1 and 5.2million were placed during the course of the auction, which last lasted about ten minutes, then the property was ultimately passed-in.  While this property offered a turn-key solution in a premier Melbourne suburb, factors such as a weak front facade, lack of covered car-parking and a first-floor main bedroom suite (never ideal for younger families or downsizers) could have tempered buyer interest. It could also be the price ask, which is courageous, and/or the uncertainty of the times currently. That all said this home will sell, but some things will need to change for that to happen.

12 Foam Street Elwood

A beautifully renovated and extended single level brick Edwardian in one of Elwood’s iconic tree-lined streets. The home is positioned near the shops and restaurants of Ormond Road, as well as the sporting amenities on St Kilda Street.  A reasonable 20 plus crowd came to see or participate in the auction, headed up by Marcus Peters from the RT Edgar group. Quoted $2.7-2.9m throughout the campaign, proceedings started with a $2.7m vendor bid. After a short break to give potential parties some thinking time, a genuine offer of $2.725m was received, very swiftly followed by another VB of $2.8m. Reluctantly, the bidder secured negotiation rights with another bid at $2.825m before the home was passed in.  Agreement could not be reached, and the home remains for sale at the original quote level at time of publishing.

Welcome to our first Market Pulse for 2025.

The market has commenced as nearly every February market has over the past 20 years – with renewed energy, some new buyers and plenty of optimism.

Over the past three weeks, we have seen a number of very strong results, properties sold before auction or EOI closing dates, and strength in competition at auction.

These solid results tend to drag up buyer sentiment, giving a flow-on effect across the market. While there have been some quality homes among the stock on offer, we think quality offerings overall are few and far between.

An interest rate reduction, just at the right time, has provided agents with a narrative that now is a good time to buy or sell.

The later date for Easter this year will also provide two months of an almost uninterrupted selling campaigns for vendors.

It’s almost perfect!

However, under the perfect picture, there are some cracks.

The break between the first quarter and second for the year is also unusually long, as school holidays (commencing 5^th April), Easter holidays and Anzac Day roll into each other, taking us through to almost May.

When the market returns, other distractions will also have set in, such as the footy season, colder weather and thoughts of holidays north or overseas, and non-residents no longer able to purchase.

With so many variables coming into play after Easter, we are not confident that the current spike will continue and we may see more of a mixed market for the remainder of 2025.

Highlights:

• 5 Stawell Street Prahran, quoted $1.5-1.65m – auction sale, undisclosed mid $1.8ms
• 271 Tooronga Road Glen Iris , quoted $1.8-1.9m – auction sale, undisclosed almost $2.25m
• 426 Whitehorse Road Surrey Hills, quoted $2.0-2.2m – auction sale, undisclosed over $2.5m
• 20 Lister Street Kew East, quoted $1.8-1.95m – auction sale $2.375m
• 80 Great Valley Road Glen Iris, quoted $3.0-3.3m, $3.3m – auction sale $4.01m
• 19 Arama Street Balwyn North, quoted $2.0-2.2m – auction sale $2.48m
• 60 Black Street Brighton, quoted $2.0-2.2m – auction sale, undisclosed over $2.5m
• 18 Shasta Avenue Brighton East, quoted $1.75-1.9m – auction sale, undisclosed over $2.35m
• 68 Fenwick Street Clifton Hill, originally quoted $1.5-1.65m, increased to $1.6-1.76m –auction sale $2.31m
• 5/65 Royal Avenue Sandringham, originally quoted $1.15-1.25m, increased to $1.25-1.29m – auction sale, undisclosed over $1.51m
• 46 Harts Parade Hawthorn East – quoted in the high $3m’s and sold for just under $4.4m

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

27 Findon Street Malvern East – Carla Fetta, Jellis Craig

34 Kinkora Road Hawthorn – Mike Beardsley, Jellis Craig

248 Esplanade East Port Melbourne – Warwick Gardiner, Jellis Craig

27 Collingwood Street Sandringham – Paul Bond, Hodges

‘Off-market’ Properties:

Auction Spotlights:

5 Range Street Camberwell

In hot sticky late summer conditions. Auctioneer Scott Patterson gave a concise spiel in front a smallish crowd of maybe 50 people. What was on offer was 860m2 approx. with a well-kept Merchant Builder house. Quote was $3.0-3.3m which seemed about right – while the land characteristics were good here (wide block, north facing to rear), this part of Camberwell is not as strong as others (due to being a bit further away from prominent private schools). Opening on a vendor bid of $3.0m, it took a while, yet some soft bidding saw this property trot along with a few bidders and ultimately pass in at $3.15m. Sold after auction for an undisclosed amount within the quoted range.

Good result for buyer and seller alike.

1/7 Southey Street Sandringham

After early offers brought the home on the market, the auction was pulled forward over a week to deliver a transparent process for the prospective purchasers. Well positioned to the beach, shops and Sandringham station, this property is underpinned by its prime location. The villa itself ticks many boxed – single level, up to three bedrooms, spacious living, north rear, front one of three with own driveway and street access. While certainly liveable, the inside is looking for a thorough update. The home had been quoted $1.2-1.32m during the open campaign.

Christian Hegarty headed up the Buxton team for the auction, commencing proceedings at $1.35m, the point where early offers had brought it on the market. Two parties were keen to secure the keys – a downsizer couple versus a young professional couple. Swift bidding brought the home over $1.41m where both groups then clearly started to hurt.  $1,000 and $2,000 bids slowly inched along until bidder two, the young couple, secured the property for $1.427m.  They are likely to possess more energy and enthusiasm for the renovation work now required for the excellent long term potential.

It’s nearly Christmas and, as the year draws to an end, tension levels seem to be rising.

In the past, as the market gets closer to wrapping up for the year, we usually see both vendors and buyers soften in their negotiations to secure their desired outcome.

It seems (for the time being at least) that many vendors, sitting on properties that have already failed at auction, are quite content to keep asking their ‘above market’ prices and hold onto their homes. Many vendors need a certain price, either to match a bank valuation or to provide the funds for their next purchase.

Perhaps new buyers will enter the market in the new year and the prices will be paid; however, these vendors may find their property among a growing number of homes that haven’t sold. Or, worse still, among a large pack of ‘fresh’ new listings.

One of the bigger differences in 2024 is the increase in homes (at all price points, even some villa units and apartments) being marketed using the ‘expression of interest’ method.

While most buyers find the EOI process challenging, it provides the vendor with some protection around interest levels and pricing, particularly if they are wanting a higher than market price.

Having monitored many EOI campaigns throughout the year, a high majority have sold within, or below, the quoted range.

We have seen a number of homes purchased during 2021 and 2022 quickly come back up for sale. Although some have sold well, others have seen quite a loss.  As an example:

Most vendors who bought for a very strong price during those years are now struggling to get back what they paid. If they are also asking on top for ‘transaction costs’ (ie stamp duty etc) that is almost impossible to achieve.

There have also been some very big sales at the top end of the market, although some also took a while to sell:

 So what can we expect for 2025? We think there are still a number of vendors suffering from mortgage stress. If there is no reprieve in sight, there could be quite a few new options for buyers in the new year. With interest rates not likely to drop until May, can vendors hang on?

This year we have seen a steady climb for ‘land’ sales, as buyers’ confidence grows to build new and/or renovate. We would expect this to continue, as the planning process has become more streamlined and councils in certain parts a bit more ‘relaxed’.

Some vendors of the more rural areas of Melbourne that experienced very rapid growth during the Covid years (such as the Mornington Peninsula) are now suffering from the interest rate hikes and land tax increases. We expect to see a further increase in homes for sale as many vendors have their ‘last summers’ before putting their properties on the market.

With the increased supply and decrease in demand, there are likely to be some very good opportunities for buyers. But, as always, you need to know exactly what you are buying and ensure you do the proper due diligence. If you don’t, it could cost you dearly.

For now, though, it’s time to regroup and relax with family and friends and we wish everyone a Merry Christmas, Happy New Year and safe and happy holidays.

There are a multitude of “pre-market’ properties scheduled for campaigns in February/March 2025 with vendors happy to receive early (high) offers now, along with a variety of more traditional ‘off-market’ properties. Here a selection:

• Near new, Hamptons style, 4-4-2, ~580, west rear, Brighton – circa $5m+
• Spanish mission, 4-2-2, single level, ~700sqm, Brighton – circa $5m
• Updated family home, 5-3-2, north rear, ~650sqm, Brighton East – circa $3.9m
• Cal Bung, Castlefield Estate, 4-2-2, ~700sqm, north rear, Hampton – circa $3.4m
• Single level family home, 4-2-2, ~560sqm, east rear, Sandringham – circa $2.5m
• Period w modern rear, 4-3-2, ~680sqm, west rear, Sandringham – circa $3.75m
• Family sized TH, water views, 4-3-4, ~470sqm, Black Rock – circa $2.85m
• Original home 4-2-2, pool, ~900sqm, ~23m frontage, north rear, Beaumaris – circa $2.75m
• Renovated 3 storey townhouse, 3-2-2, north terrace, Prahran – circa $1.8m
• Vacant land with pool foundations, ~1150sqm, north rear, Kooyong – circa $5.1m
• New home site ~580sqm (~18.3m frontage), north rear, no HO, Toorak – circa $6m
• 3 storey TH, 4-3-2, north balcony, Malvern East – circa $1.4m
• C1910 brick home, 4-3-2, pool, ~790sqm corner block, Glen Iris – circa $3.35m
• Striking modern home, 4-4-2, pool, Camberwell – circa $6.3m
• Double fronted Victorian, 4-2-2, pool, Kew – circa $3.45m
• Two storey period home, 4-3-2, pool, Kew – circa $4m
• Brick 2 storey Californian Bungalow, 4-2-2, pool, Kew – circa $3.15m
• Renovated Victorian, 4-2-2, pool, ~530sqm, Hawthorn East – circa $3.95m
• Victorian dble fronter, architectural extension, 4 bed, pool, Hawthorn East – circa $3.25m
• Single fronter, 2-1-1, ~340sqm, north rear, Hawthorn East – circa $1.85m
• Family home w pool, 4-2-2, ~630sqm, east rear, Glen Iris – circa $2.4m
• Near new contemporary home, 4-2-2, pool, ~800sqm, Glen Iris – circa $5m
• Renovated period 4-2-2, ~630sqm, south rear, Surrey Hills – circa $2.3m
• Two storey contemporary, 4-2-2, ~650sqm, Balwyn – circa $3.15m
• Victorian single fronter, 2 storey, 3-2-1, Carlton North – circa $2.3m
• Freestanding period home, 3-2-1, ~230sqm, corner site, Elwood – circa $1.65m

Melbourne’s multi-tiered property market has highlighted the winners and losers in the game, at one of the biggest auction days for the year last Saturday.

We do not believe the weekend’s reported clearance rate of 76% accurately reflects what is actually happening in the market. Many properties are now being withdrawn from auction, often due to no buyer interest, or the auction result is not reported, meaning these figures are therefore excluded from the final results.

For this half of the year, the properties we’ve been monitoring are consistently circling the 55% mark. Granted, we are focusing on homes over $1 million within the key councils of Melbourne, including but not limited to Bayside, Port Phillip, Glen Eira, Stonnington, Yarra, Darebin and Boroondara, where not every home is auctioned.

From our record, we were pleased to see the clearance rate for those properties on Saturday at 60%; however, this is well below the advertised 76% being pushed into the market.

A number of homes sold before auction this week (particularly in Balwyn, where there were no ‘live’ auctions). While some of these sales may have been because there was only one party interested, others were over-run with buyers and there were some very strong results reported, such as 37 Elizabeth Street Malvern. It was quoted $6-6.6 million and received an early offer, which induced a board room auction.  Five parties pushed the price to an undisclosed price comfortably above $8 million.

Quoting remains a problem for buyers, with many finding themselves ‘swimming in the wrong pool’ time and time again, missing out on homes they think they can afford. Or buyers do not understand the type of property they are competing for. For example, on the weekend, a well updated original family home on a very large allotment in Surrey Hills went up for auction. Those looking to live in the home (which was perfectly fine) or even extend it in the future simply could not compete with the majority of buyers, who were looking to knock it down and start again.

We hear so many buyers when we are out and about lamenting about ‘low quotes’, yet they change nothing to achieve a different outcome when trying to purchase their home.   Without research and a plan, the likelihood is they will keep failing, or ultimately buy something sub-standard with their budget just to get the job done.

In addition, council valuations remain an issue for vendors. While traditionally councils would be on the conservative side with their assessments, more often lately we are hearing of very high assessments which do not make sense in the current market for what the property really is. Naturally a vendor would rely on the council information (as it is in writing and comes from an authoritative source) and frame their pricing thoughts accordingly – more often than not though currently it just doesn’t help when it comes to sell … and vendors struggle (or simply don’t), sell.

Understanding the nuances of the Melbourne market is a full-time job for most people working in the industry. If you find you’re not having success and don’t want to give up any more of your weekend to research and learn more, it might be worth engaging someone to assist with the process.

There is a small break now for Cup Week(end) before the last of the campaigns for 2024 commence. With only six ‘good’ Saturdays left for the year, there is really only another month for vendors to get their properties prepared and online. The alternative is February 2025 and that, for some, will seem like a long way away at this stage.

For buyers, that means there is a good chance you could be starting 2025 still looking for your new home. Now is an easy time to make a mistake. Good agents will recognise your eagerness to purchase before the end of the year, convincing you to relax your requirements and accept sub-standard properties for your price bracket just to get the job done before Christmas.

Yes, that may be a great relief; however, rushing to buy the wrong property can ultimately lead to dissatisfaction, stress and possibly the desire to resell and try and get it right next time. The onflow effect of this is more stress and a lot more costs, including advertising, agents’ fees and more stamp duty fees. The cost can be emotional and financial.

For the last six weeks, we expect to see an increased number of ex-rental properties for sale and for younger buyers, or first-time buyers, there should be some good opportunities if you are prepared to take on some of the maintenance tasks and upgrades that many of these properties require. Some of these are located in the best precincts of some of Melbourne’s most desired suburbs. It can be a great opportunity to break into these areas at more affordable price points.

Family homes in the $3-4 million range are in high demand but low supply, as are single storey homes, particularly suitable for downsizers.

As an example, 5 Garden Street Hampton, a single storey with an older renovation, yet still comfortable home, on 639sqm approx., quoted $2.25-2.35 million, sold for $2.672 million with eight bidders. 

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

5 Emo Road Malvern East – Jack Moss/Justin Long, Marshall White

9 Campbell Street Kew – Nick O’Halloran/James Scoones, Jellis Craig

24 Haydens Road Beaumaris – Kate Fowler/Spiro Vasiliadis, Jellis Craig

‘Off-market’ Properties:

• Renovated family home, 5-5-5, pool, ~1030sqm, Hawthorn – circa $8.4m
• Brick semi-attached, 3-2-2, ~460sqm, Hawthorn East – circa $2m
• Modern 5-4-5, pool, ~560sqm, Kew – circa $7m
• New home site, ~640sqm, west rear, city views, Kew – circa $3.6m
• Contemporary single level 4-3-3, Balwyn North – circa $3.15m
• Californian Bungalow, 5-3-2, pool, Surrey Hills – circa $2.5m
• Brick Edwardian, 4-2-2, ~630sqm, Malvern – circa $3.75m
• Renovated Victorian 4-3-2, ~450sqm, Prahran – circa $4m
• Victorian Terrace, 3-2-1, ~120sqm, South Melbourne – $1.9m
• 80s family home, 5-3-4, ~750sqm, Caulfield South – circa $2.8m
• School zone, 4-2-2, ~770sqm, McKinnon – circa $2.1m
• Cal Bung w dramatic reno, 5-5-3, pool, Elwood – circa $5.9m
• Brick Edwardian 4-2-5, ~680sqm, Elwood – circa $4.3m
• Modern family home, 4-4-6, pool, ~1000sqm, Brighton – circa $9.8m
• Clinker brick, likely new home site (stca), ~740sqm, Brighton – circa $3.3m
• Californian Bungalow, 3-2-1, near shops/train, Brighton – circa $2.1m
• New home site, ~1,100sqm, north rear, Brighton East – circa $3.15m
• Single level clinker brick, 3-2-2, ~700sqm, Hampton – circa $2.2m
• Single level 4-3-2, ~620sqm, Black Rock – circa $2m
• Contemporary 4 bed home adjoining golf course, Beaumaris – circa $2.75m

Auction Spotlight:

Far enough from the higher density developments taking place around Hampton Street, yet an easy walk to shops, trains and the beach, 5 Garden Street Hampton ticked many boxes for buyers.  The single level made it especially attractive for “right sizers”, as did the established, yet low maintenance gardens.  The choice of two living zones with 3 to 4 bedrooms also made it appealing to families.  The home had been quoted $2.2-2.29m before being lifted to $2.25-2.35m during the campaign.  Plenty of people came to watch and participate in the auction.  Christian Hegarty headed up the Buxton team and quickly received an opening bid of $2.3m. In no time at all, 4 bidders took the property past reserve, and two further parties entered, as others stepped out. When most thought the auction was coming to a close, bidders 7 and 8 jumped in. The home eventually sold to bidder 7 for $2.672m

Land in Boroondara has been well received by buyers recently, particularly good-sized land with no heritage overlay.

That was what was on offer here at 3 Tyndall Street Surrey Hills, and with next door selling not long ago for $3.45 million (slightly smaller land, slightly better house) buyers no doubt should have had conference in this property and its respective value.

In front of about 60 people, auctioneer Tim Heavyside opened the auctioned with a friendly $2.5m and it did not take long for bidders to see the property announced on the market at $2.7m and eventually sell for $3.286m. Six bidders in all participated here, with most of them over the $3m mark.

Under the shady canopy of the street plane trees and in front of about 30 people, auctioneer Daniel Wheeler conducted the auction for this well renovated, beautifully presented single level, north facing rear  period home at 21 Hope Street Glen Iris. With the auction opening at the bottom of the quoted range of $2.7m, a series of measured bids between bidders 1 and 2 saw the price rise to $2.9m and with bidding halting, the half time break was taken. Bidder no. 3 entered at $2.92m and the property was announced on the market. It took a bit of time for the original bidder to come back but they did with a further rise of $5,000 and they won the auction and ultimately the home.

As we draw towards the conclusion of the property market for the third term of 2024, buyers have seen generous stock levels for the winter months, when compared with previous years.

Of that stock, however, much of it has been stock that doesn’t meet current buyer criteria.  A lot of it is ex-rental stock with vendor/landlords determining that the benefit-to-cost ratio of holding a property portfolio in Victoria (even just one property in addition to their principal place of residence) is heavily out of balance and too onerous to retain.

A number of these homes are at lower price points, and include older apartments, villa units, blocks of land with old homes on them, which has provided choice for first home buyers. However, many first home buyers have limited financial capacity and an aversion to undertake too much work, given the negativity surrounding building costs and builder viability over the past two years.

A lot of rental stock may have functional heating, cooling, new hot water systems and working appliances, but some of the fundamental maintenance items have not been tended to for years, even decades, with tasks such as re-stumping and sub-floor ventilation causing structural issues for many older homes, affecting more than just some bouncy floorboards.

We have always believed that pre-purchase building and pest inspections are worthy things to get done, particularly as over recent years homes have not been that well maintained (do many home owners actually do this maintenance these days?) and the prevalence of dodgy renovation or upgrade work (often inspired by fashionable reality tv shows) means it is an important due diligence item for buyers to tick. Our clients will do this, but few of their competitors will.

Good houses needing renovation are also available. As always, there are opportunities for brave buyers willing to take on this work, and, if priced right with experienced agents, these ‘renovator’s delights’ are selling through competitive auctions (and over the top of quoted ranges). Two double-fronted Hawthorn examples on the weekend:

Both sold for about $150-200K above the top of quoted ranges, and we’re not sure this would have been the case earlier in the year. Why? Because the cost of such work was ‘seen as’ prohibitive and even finding a good builder to take it on at an affordable price was ‘seen as’ impossible. It seems to us the tide is turning in this regard, and buyers in general are getting comfortable with the idea (and/or cost) of renovating.

Largely due to lack of supply and convenience, a segment of the market that is going very well is modern or older homes that have been nicely updated, particularly in Boroondara. Noted strong examples from the weekend:

It should be noted that the buyers for these offerings are not needing finance to fund these purchases, and therefore increased interest rates and/or borrowing capacity are moot factors.

This winter we have seen an increase in ‘off market’ properties. This is in part driven by increased costs for advertising, which is an up-front cost that is often impossible for cash-flow-poor vendors to find.  While we have purchased some of the good ones, many of the asking prices of these ‘off market’ properties are so far above reality that we don’t think they are really even for sale. Vendors, in many instances, are dreaming and some agents, in many instances, are humoring their vendors in the hope that they will sell via a public campaign in the future when the vendors become more realistic about price.

Buyers can waste a lot of time looking at homes that aren’t really even for sale. When some of these homes eventually do make it to market, a number of them are seen as ‘that’s been around for ages’ before the official campaigns have even started. The damage done can be quite considerable.

So where does that leave us as we prepare for the final quarter of 2024?

General sentiment from agents is ‘October is going to be big’. At this stage, we believe big to mean ‘good volume of stock’. Big, in terms of sales results, may depend a bit more on the type of stock being listed.

For anything not quite right, or above market expectations, there could be more pain for vendors as stock levels rise further, increasing the negative sentiment out there for this type of stock.

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

107 Ruskin Street Elwood – Rachael O’Connor/Nicole Prime, McGrath

6 Clive Road Hawthorn East – Scott Patterson/Garrick Lim, Kay & Burton

28 Elizabeth Malvern – Will Bennison/Tim Bennison, Jellis Craig

‘Off-market’/Pre-market Properties:

• Modern family home, 5-8-3, lift, pool, ~750sqm, Kew – circa $11.5m
• 2 storey family home, 6-4-3, pool, Sackville area Kew – circa $6.2m
• Period front, modern rear, 4-3-0, north rear, Kew – circa $3.3m
• Single level 3-1-2, north rear, ~500sqm, Surrey Hills – circa $1.65m
• Single level needing reno/extension, ~620sqm, Hawthorn – circa $2.9m
• Brick single fronter, 2-1-1, north rear, Hawthorn East – circa $1.7m
• Period family home, 6-3-2, ~830sqm, Camberwell – circa $3.15m
• Timber Edwardian, renovated, 5-3-2, ~730sqm, Canterbury – circa $3.75m
• Iconic period building, 2-1-0 apartment, South Yarra – circa 1.25m
• Brick Victorian, 2-1-1, renovated, north rear, Armadale – circa $1.75m
• Brick Edwardian, 3-1-0, needing reno, Windsor – circa $1.3m
• Victorian weatherboard, 4-2-1, pool, ~300sqm, Malvern – circa $2.3m
• Brick Edwardian, 3-1-0, north rear, ~225sqm, Middle Park – circa $2.55m
• Brick Edwardian, 3+study, 2 bath, 4+ cars, Elwood – circa $5m
• Semi-attached brick, needing reno, 3-1-1, Elwood – circa $1.85m
• Brick villa, 1-of-2, north courtyard, 2-2-1, Caulfield North – circa $1m
• Victorian dble fronter, 4-2-3, pool, Caulfield South – circa $3.25m
• Contemporary townhouse, 4-3-2, Nth of pair, Bentleigh – circa $1.69m
• 2 storey family home, 5-3-2, ~870sqm, near beach/shops, Brighton – circa $8.4m
• Brick Victorian, renovated, 3-1-0, walk to Bay St shops, Brighton – circa $2.2m
• Contemporary 4-3-4+, huge rear garage/retreat, Sandringham – circa $3.5m
• Large Edwardian w bonus studio, 5-3-2, pool, ~810sqm, Sandringham – circa $2.8m+
• Single level Edwardian, 4-2-2, near shops/beach, Sandringham – circa $2.3m
• Single level, 5-2-3 near parks, ~600sqm, Highett – circa $1.55m
• Modern family home w Bay views, 4-3-2, ~790sqm, Beaumaris – circa $3.5m
• Large family home, 4-5-4 plus 2 study, 4 living, pool, Mentone – circa $3.5m
• Renovated period home, 4-2-2, pool, ~640sqm, Mentone – circa $2.1m

Auction Spotlights:

8 St Columbs Street Hawthorn

A good crowd gathered for this auction which was conducted by Campbell Ward of Jellis Craig (listed by Richard Winneke). On offer was a double fronted brick Victorian home which has been updated in the past, yet many would see challenges today in its floor plan layout and it likely will need work in the near future to update. Within the shadows of Swinburne University and opposite the old Vicarage of St.Columb’s Anglican Church (now used as  offices) this property was not without its issues. That said after a frosty start it attracted good bidding from three parties. Starting at $2.4 million bidding crept along consistently up to $2.625 million when the property was announced on the market. After this, it climbed to $2.7million in regular bids then at $2.76 a very bold jump bid of $40,000 was taken which knocked out the under bidder and the property was sold under the hammer. A good result for a property that has good potential – it seems now the market is receptive to taking such projects on and are a little bit less fussy on location.

16 Hudson Street Hampton

Built sympathetically in a style to suit surrounding traditional homes of Hampton, 16 Hudson Street offers single level living with a long list of modern eco features. It delivers 3 bedrooms and 1 bathroom, which is possibly the limiting factor of the home.  Some not too complicated reconfigurations (stca) could deliver the second bathroom.  The home had been quoted $2.1-2.3m throughout the campaign.

A decent crowd lined the street to see Stephen Tickell head up the Belle Team. An opening bid of $2.1m started the auction, with two parties trading swift $50k bids to quickly bring the home on the market at $2.35m.  The $50k bids kept coming, only slowing to $25k for the final three, and bidder 2 succeeding in securing the keys for $2.575m.  A solid result for the size of home, showing position, all done and environmental features can add value for vendors.

With the winter break behind us, the market has resumed with good interest from buyers and solid increase in the number of options available for sale.

Investment properties and holiday homes are continuing to underpin the overall volume, with agents citing new land tax changes as a key driver in the decision to sell.

With demand for finished products still the preference for most buyers (and some encouragement many are coming on, see below), we believe there are some good opportunities for buyers who are prepared to take on a project.  While there may be future risk associated with building costs, supply availability and builder viability, the weaker market for these properties is allowing buyers to get into some A grade areas at more affordable prices.

We note the long winter break also saw a number of homes that had been for sale since the start of the year (or earlier) finally sell.  While they may not have sold at the vendors’ original expectation levels or quoted prices, the lowering of asking prices opened the door for buyers to regain interest in the properties.

As we know, price is a major factor contributing to a property not selling.  At a certain point, however, once the price has been reduced, a property can be seen as good value again, therefore increasing the number of buyers who may be interested in it.

These price reductions, combined with a lack of new options (common for this time of year), resulted in a number of homes selling (some below having two or three parties vying for them again, providing some good results for vendors).

• • • 57 Morey Road Beaumaris
    • 59 Crisp Street Hampton
    • 1 Mildura Street Sandringham
    • 3 Royal Crescent Camberwell
    • 61 Warburton Road Canterbury
    • 38 Ross Street Toorak
    • 6 Torresdale Road Toorak
    • 43 Athelstan Road Camberwell
    • 3 Cascade Drive Kew East

Who says you can’t sell property in Melbourne in Winter?  July buzz auction, Leor Samuel (Gary Peer) conducts a spirited auction in front of around 200 people – 36 Tourello Avenue Hawthorn East sold for $5.051m, well in excess of vendor’s reserve.

The auction weekends for August and September are looking steady and should provide a good test of the strength of the market as we head into Spring, where historically stock levels are strong. We have seven auction weekends ahead of us (not really counting August 3, as it hasn’t had the best lead-up in terms of colder weather and lower numbers of people in Melbourne), culminating in September 21, which looks to be the showcase auction Super Saturday. The weekend after features the AFL Grand Final day and the middle week of school holidays, providing the market a short rest before spring really takes off.

The market has been calling for ‘turn-key’ home offerings and there does seem to be some good options out there, where some vendors are looking to take advantage of listing before the spring ‘rush’ really comes in to play. Large family homes, particularly in Boroondara, (where buyer groups often aren’t hindered by bank lending and interest rates) seem to still be well received and there are a few out there…..

Some of the better options for sale now:

An architect’s view of some of the better properties currently on the market; 

35 Emo Road Malvern East – Alex Voronin/Karl Fitch, FitchPartners

54 Broadway Camberwell – Scott Patterson/Walter Dodich, Kay & Burton

12 Grandview Road Brighton – Alex Schiavo/Shantelle Francis, Kay & Burton

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

• Townhouse, 3-2.5-1 plus study, Hawthorn East – circa $1.45m
• Renovated Victorian, 4-3-3, ~730sqm, Hawthorn – circa $4m
• Single level villa, 3-2-2 car basement, Nth c/yard, Toorak – circa $2m
• Single level villa, 3-2-2, updated, Nth c/yard, Toorak – circa $2.6m
• Federation brick, 4-2-2 pool, ~830sqm, Malvern – circa $6m+
• Brick Edwardian single fronter, 2-1-0, Nth rear, South Yarra – circa $1.65m
• Double fronter looking for full reno, ~420sqm, Nth rear, Malvern – circa $2.5m
• Brick Edwardian single fronter, 3-1-1, Elwood – circa $2.275m
• Victorian double fronter, 3-1-2, ~330sqm, Elwood – circa 1.95m
• 2-1-1 apartment with north c/yard, St Kilda – circa $950k
• Contemporary 3 storey TH, 4-3-2, rooftop, views, Albert Park – circa $2.4m
• Modern 5-5-4 family home, ~970sqm, Brighton – circa $14.5m
• Renovated 2 storey Victorian, 4-3-1 pool, Brighton – circa $4.75m
• Contemporary family home 4-2-2, ~630sqm, Brighton East – circa $2.1m
• 1,200sqm development site on Beach Road, Beaumaris – circa $6.45m
• 1,600sqm development site near Chadstone, dual access – circa $4m
• Single fronter on ~250sqm, free standing, needing reno, Northcote – circa $990k

Auction Spotlight:

Nick Jones heading up the Hodges Team on auction day

When looking for a downsizer or first home, these are the types of properties we think are a great option – well positioned, one of two, rather daggy now but with the opportunity to create a fantastic home with the spaces already on offer. The dreary weather conditions didn’t deter the buyers interested in 2/27 Middleton Road Highett. A mix of older couples and young singles/couples were keen to get their hands on the keys. The home had been quoted $790-850k during the campaign, opening with an $800k first offer. Quick bidding between two parties had the bid at $915k before the auctioneer could even get a word in and call it on the market. At this point bidder three replaced one, offering quick replies to bidder two’s much more considered (and eventually clearly quite painful) counteroffers.  Bidder three, an older couple, were the eventual successful buyers at $965,000.

It seems that as quickly as the winter weather hit this week, the market has just as quickly tightened up, with many vendors now holding off considering selling until Spring and a large number of buyers, sellers and agents have moved their attention to focus on warmer weather interstate and overseas. This traditionally happens in Melbourne when mid-year school holidays take place, and buyers shouldn’t be too disheartened with not too many advertised listings in the next month.

The market has continued to see some very strong results for the good homes (as highlighted in our last blog), particularly larger homes and apartments in the councils of Stonnington and Boroondara.

Recent sale examples:

Equally, however, a number of properties have struggled to sell, even after some heavy reductions in quote prices. Often the market views such offerings as ‘damaged goods’, whereby there is not too much wrong with the property other than what the asking selling price is.

Ex-rental stock has dominated the homes available for sale. On the positive side, a lot of this stock has been lower priced, which has provided some choice for first home buyers at more affordable price points. But a lot of this stock is also in need of money being spent on it, not just for aesthetic improvement, but for structural or safety reasons. This means buyers may require additional unknown amounts to be spent beyond the purchase price, making it more of a deterrent for younger buyers to purchase, depending on their budget or wage limitations.

We have also noticed an increase in stock for sale that was purchased during the Covid era, where buyers often paid a lot of money (sometimes well over the asking price), often sight unseen, for homes to move into for lockdown.

Many of these vendors have an expectation that their property has continued to grow and that buyers will also pay more than they did, plus extra to cover their stamp duty costs (a cost of purchasing and not part of the purchase price). Some also, at the time, thought a renovation to what they had bought was the way to go, but greatly underestimated the work and costs involved, therefore not making it a viable option.

Some suburbs saw extraordinary exponential growth over the two-year period of lockdowns and are now starting to level back to pre-Covid prices.  Vendors who purchased some of these Covid homes and now need to sell, will most likely have to accept that the current buyers are not prepared to pay the asking prices, just because it’s been paid before, and cut their losses so they can move forward with their lives.

So where to when the market returns? We think quality options are going to remain low. For vendors whose properties are compromised in some way (eg weak locations, poor orientations, poor light, needing renovation, awkward flow etc), making the decision to sell at a price the market will accept, before they commence their campaign, is probably the best way to support a desired outcome – that is, the sale of their property.

The number of rental properties for sale will continue to increase, particularly as we get closer to the end of the year, as vendors will not want to sign up for another year of land tax (especially as they can’t apportion any of the cost onto buyers anymore).

We also think the number of new apartments for sale will continue to increase, particularly while the idea of investing in Melbourne property is considered unattractive. Importantly, some have had council cladding orders removed and /or addressed, making them a more appealing option that what they previously were. As always, conducting required due diligence into what you are buying is critical. This is not the responsibility of the selling agent, who is working, of course,  for their vendor.

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

7 Charles Street Hawthorn – Mike Beardsley/Ellie Morrish, Jellis Craig

21 Seymour Avenue Armadale – Jack Nicol/Fraser Cahill, Marshall White

30 Mills Street Hampton – Kosta Mesaritis/Kate Fowler, Jellis Craig

‘Pre & Off-market’ Properties:

• Modern townhouse, 3-3-2, north rear, South Yarra – circa $3.25m
• Double fronted Victorian, 3-2-0, pool, ~330sqm, Malvern – circa $2.65m
• Land w plans/permit, 4-3-2, pool, ~630sqm, Malvern East – circa $2.7m
• Brick Edwardian, single fronter, 3-1-1, ~345sqm, Armadale – circa $2.1m
• Single level brick Edwardian, 3-1-1, renovated, Prahran – circa $1.85m
• Brick Victorian single fronter, 3-2-2, Hawthorn – circa $2.0-2.2m
• 2 storey townhouse, 3-2-2, Hawthorn East – circa $1.85m
• Fasham Johnson single level, 4-2-2, ~590sqm, Hawthorn – circa $3m
• New 4-3-2, pool, roof deck views, Hawthorn East – circa $3.3m
• Near new 2 storey 4-3-2, ~310sqm, Kew – circa $3.2m
• Rear one of two on ~600sqm, 4-3-2, Surrey Hills – circa $2.1m
• Semi-attached 3-1-1 on ~344sqm, looking for reno, St Kilda East – circa $1.725m
• 4-2-2 plus pool, ~600sqm, Elsternwick – circa $3.15m
• As new TH, 4-3-1, Elwood – circa $2.2m
• Renovated 4-2-2 w pool, ~610sqm, Brighton – circa $3.05m
• Renovated two storey period 5-3-2, Brighton – circa $5.15m
• Character single level, Cal Bung, 4-2-2, Hampton – circa $2.9m
• New build site, ~880sqm, 18m frontage, north rear, Brighton – circa $5.1m
• New home site near amenities, ~698sqm, NE rear, Brighton – circa $3.85m
• Single level home 4-2-3, adjoining golf course, Brighton East – circa $3.05m

Auction Spotlights:

Russ Enticott auctioning 69 Mills Street Hampton for Atria Real Estate

The pretty façade of this Californian Bungalow shows the potential on offer for this reasonably original, single level home. Positioned well within Hampton and set on around 627sqm on north rear land, the home ticks many boxes if you are prepared to invest in it for the long term.  The home had been quoted $2.3-2.4m, then $2.3-2.5m. A good-sized crowd gathered for the auction, which was opened with a genuine bid of $2.3m.  With no further offers coming, Russ followed up with a $2.4m vendor bid. Again all was quiet, until bidder 1 eventually relented to match the vendor bid, but did not go above it. The home was passed in at this level and sold after for an undisclosed amount.

Justin Long heads up the Marshall White auction at 1 Ethel Street Malvern

A small crowd gathered in the rear garden of this family sized home on approximately 544sqm. Well oriented to the north sun, the home is comfortable to live in while offering opportunities to improve over time. Well positioned to shops and transport, although the one-way street is somewhat of a local cut through. The home had been quoted $2.6-2.8m. Justin started the auction with his customary immediate vendor bid to open proceedings at $2.6m.  What followed is an example of the hit or miss nature of the current market, with nobody prepared to place a bid on this home under auction conditions. The property was eventually passed in on the opening vendor bid and at time of publication remains for sale, asking $2.85m.

The second term for the 2024 property market has well and truly settled in. Stock levels have increased (as expected) but stock quality remains low. Auction clearance rates have remained steady (in the 60-70% mark), giving vendors the confidence to sell.

This is perhaps a generalisation, but it appears vendor expectations have risen along with the stock levels.

The Melbourne property market is very topical and sells newspapers. Depending on where you sit, there is bound to be an article buyers and sellers can latch onto that supports the narrative that suits their goals.

For a property to change hands, a transaction needs two willing participants to agree on price and terms.

Ultimately, it is the vendor’s property to sell and they hold the final decision. Buyers can make it easier or harder for the vendor to make a decision, depending on the price they offer. Vendors do run the risk, however, of asking too much and damaging a campaign. Even with a price reduction the product can look damaged in the mind of the buyer, who wonders ‘what is wrong with it?’

To us, there appears to be many vendors at the moment who don’t really need to sell their properties. They can clearly afford to spend money on staging and advertising the property but at the same time are very happy to remain owners if they don’t achieve their dream price.

Take, as an example, one postcode (3193 – Beaumaris/Black Rock). Below are just a few of the properties that have been for sale since the start of the year and remain unsold.

• 55 Second Street Black Rock
• 2 Pacific Boulevard Beaumaris
• 9 McGregor Avenue Black Rock
• 57 Morey Road Beaumaris
• 2 Stanley Street Black Rock

There are just as many homes that have been removed from the internet after failing to sell.

Other areas are defying the market. For example, quality period homes in Armadale and East Prahran are in strong demand and the supply is struggling to keep up with the demand.

As an example, only a couple of weeks ago, 34 Northcote Road Armadale sold very strongly under auction for just over $5 million – about 20% over the quoted price. Why? Good location, north rear, great building bones and prized garaging – a scarce offering….

There are several other offerings in Northcote Road at the moment, but, although located in the same street, will they attract the same interest?

Knowing your product is important.

As robust as the media loves to say the market is, there are many micro markets within the market. It could benefit both buyers and sellers to know where they sit, to ensure they approach their property sale/purchase with the best available information to make the right/best decision for them.

There have been other strong results throughout Melbourne over the past month, and these include:

Well-located homes with volume and a functional floorplan (even if they have aged internally) appear to be in strong demand and being sold with limited competition.

Land is still going quite well – yet it needs to be good land – and, more often than not, width is the key here. Take 21 Madden Street in Balwyn North – 21m frontage, north rear – selling for $3.6 million on the weekend (just over 10% above the top of the quoted range). Not everything in Balwyn North is selling that well….

Another area of the market that is increasing in supply is the apartment market. With the number of new apartments increasing, this is adding to supply where many vendors (who have previously been landlords in this area) are exiting the market as the cost of maintenance, compliance and other taxes eat into their profits while growth remains low.

Quoting from an article in Sunday’s Age by Melissa Cunningham, ‘up to 60% of new apartments are riddled with construction flaws including cracked foundations, leaks, balcony defects and flammable cladding’.

Many buyers still do not wish to purchase apartments, and many who have are no doubt wishing they hadn’t.

We do not suggest that there isn’t an apartment market in Melbourne; however, we believe that, for younger buyers in particular (where it may be their first time buying), the opportunity to make a mistake has never been higher. Would you not be better to buy a less fashionable ‘villa unit’ for example (limited shared walls, minimal body corporate, arguably built better (for their time)?

Looking ahead, a few auction weeks (and EOI deadlines) remain now until the mid-year break – which essentially lines up with school holidays. The run to June 22 is on, but most of the better homes are likely to come on the market in September / October, when spring weather arrives – the traditional Melbourne ‘selling season’.

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

8 Glendearg Grove Malvern – Gary Ormrod/Tom Staughton, Kay & Burton

41 Chrystobel Crecent Hawthorn – Désirée Wakim/Nikki McCarthy, Marshall White

4 Holmwood Avenue Brighton – Kate Strickland/Campbell Butterss, Marshall White

‘Off-market’ Properties:

• Single level period family home, 4-2-1, Canterbury – circa $4.1m
• Renovated 2 storey Victorian, 4-2-1, Hawthorn – circa $2.9m
• Renovated Edwardian, 4-2-2, pool, Canterbury – circa $4.2m
• Brick Victorian, renovated, single level, 4 bed, Deepdene – circa $6.75m
• Brick Edwardian single fronter, 2-1-0, South Yarra – circa $1.8m+
• Brick Edwardian single fronter, 3-1-0, Prahran – circa $1.85m
• Contemporary 4-2-3 w pool & court ~930sqm, Brighton – circa $4.2m
• Edwardian single level, 4-3-2, pool & studio, Hampton – circa $3.7m
• Fully renovated single level 4-2-2, ~595sqm, Black Rock – circa $2.7m
• Modern TH, 4-3-1, north one of pair, Elwood – circa $2.3m
• Art Deco renovated semi-attached, 3-2-2, Elwood – circa $2.35m
• Family home w granny flat, pool, 4-3-4, Ormond – circa $2.9m

Auction Spotlights:

54 Arkaringa Crescent Black Rock – Samuel Jay heading up the Marshall White auction

Having been in the one family’s hands since it was built, it is time for new owners to make this location their own.  A large block just under 800sqm sits elevated with Bay Views from upstairs. The position and land size give ample opportunity to build new stca. The campaign had first been quoting $2.3-2.4m. Early interest suggested this was high and the quote was subsequently lowered to $2.0-2.2m.

A good sized crowd came to watch and participate as three bidders quickly took the offers over $2.2m.  A fourth party entered the action against bidder three, as bidding slowed and settled on $2.3m.  The auctioneer called for a break, coming back out with the property stated to still not be on the market – perhaps the vendor was hoping to get closer to the top of their original range?  The home was passed in and sold straight after at the price it was passed in at.

38 Connell Street Hawthorn – Campbell Ward calling the auction for Jellis Craig

A clear sky presented yet the weather was cool for this auction and a good crowd of around about 50 people gathered on the footpaths and the fringes of Connell Street to watch this auction unfold. What was on offer was a dated single level period reproduction home on south rear allotment, with low ceilings, basic quality and dated finishes – it’s advantages were off-street car parking, single level living and a functional plan. Yet there would be money to be spent here and such offerings are getting a lukewarm response from buyers at the moment. Auctioneer Campbell Ward opened the bidding with a vendor bid of $1.65 million which he eventually advanced by $25,000 to get things moving. After the halftime break 1 bidder came in at $1.7m and that is where the property passed in at, selling afterwards for $1.74 million –  a fairly expected outcome.

The market returns this week for the second quarter of 2024. Many buyers have been frustrated that not many new listings have popped up in the past few weeks (due to Easter, school holidays and the upcoming Anzac Day long weekend), but that will change soon. In May, and possibly up to 22 June, there will be auction weekend activity and a good selection of properties to look at.

What do we expect? A pretty ‘normal’ market.

What we mean by that is there are buyers and sellers ready to transact.

In general, it seems balanced; however, among the stock, there are both properties that are performing well and many that are struggling.

A lot of the struggles appear to be from overzealous vendors who believe their properties are worth more than buyers are prepared to pay. These are often homes that have been renovated without addressing fundamental issues, or properties that need a renovation, extension or development. Or they have simply been quoted too high.

The move-in family home or single-storey downsizer is still in strong demand and in very limited supply.

There are numerous properties still for sale from the first quarter of the year (or last year). While that could suggest a weaker market, there have been buyers prepared to purchase, often within the quoted price range, yet the sale has not occurred.

The property is the vendor’s to sell.  They can ask whatever price they like, so long as they are happy to remain the owner of the property indefinitely while waiting for their ‘unicorn’ to appear.

The market down in the Peninsula areas has come off in a pretty big way, largely due to sizeable land tax bills sent to landlords.

We are seeing an increase in buyers using the bank of ‘mum and dad’ to help get into the property market.

While this isn’t unusual, the form of help is changing. It’s not just ‘stumping up the deposit’ anymore. There is lot more creativity among families to make it work.

In the last census, the Australian Bureau of Statistics revealed an increase of just over 20% in the number of three-generational households between 2016 and 2021, and that was before the newer and higher cost of living increases we have experienced over the past couple of years.

Children are staying at home longer or returning home with partners and/or children. In some instances, members of families are selling their homes, amalgamating their assets and buying one larger home to accommodate everyone into the future.

Over the past 25 years in particular, larger family homes on big blocks have been divided and replaced with new townhouses, often over two levels, to retain the internal spaces required for a family.

For those looking for a larger home again, often with 4-5 bedrooms and at least 2-3 bathrooms to accommodate sleeping arrangements and working from home needs, stock is limited and demand is increasing.

There is still also a desire to buy something ‘turn key’, with many buyers still unwilling to take on the ‘risks’ associated with renovating or extending a property to make it work for them.

There is a great opportunity for buyers at the moment if they are prepared to improve a property. For our clients, we advocate this strongly.

Yes, it takes time and planning; however, the rewards include remaining in a preferred location, creating a floorplan that is bespoke to your family needs and offering the opportunity to improve the property over time as cashflow allows. If you design smart, chances of over-capitalising are minimised.

Building new is another area of the market buyers are looking to again and we have seen some strong ‘land sales’ in the Boroondara Council, which often leads the way to recovery.

• 18 Cremorne Street Balwyn, quoted $2.3-2.5m, ~670sqm – sold $3.06m
• 44 Rowell Avenue Camberwell, quoted $2.5-2.7m, ~693sqm – sold over $2.9m
• 33 Fairview Street Hawthorn, quoted $3.4-3.7m, ~695sqm – sold over $4.05m
• 10 Doonkuna Avenue Camberwell, quoted $2.1-2.3m, ~697sqm – sold $2.71m
• 14 Nungerner Street Balwyn, quoted $2.3-2.5m, ~678sqm – sold $2.751m

Where last year, these properties were almost off the menu completely for buyers, savvy buyers realise that they can purchase at a more affordable level into some of Melbourne’s blue-chip suburbs, particularly if they are prepared to live in a home that is less than perfect in the short term.

Success, however, is dependent on knowledge and research to ensure buyers are cognisant of all that is involved in the process, including planning, design, building, costs and time.

Building costs are similar no matter where the property is located (one could argue it costs more to renovate a home with a south-facing rear than one that has a north-facing rear, due to the benefits of passive solar gain – but that is a discussion for another time). Due diligence and support to ensure all the boxes are ticked before purchasing a property that needs work is the key. We are seeing a number of our clients taking advantage of Adam’s skills (as a registered architect with 25 years of experience) in this area so they can maximise their future property outcomes, both emotionally and financially.

Renovate or relocate? 

This is a question we are often asked. We feel fortunate to be in a position where we can give a more balanced advisory view. We see the homes that have been renovated well or ‘smartly’ – and those that have not been. Sometimes it is just better to move on and buy again.

There are many factors to consider here, including –

A selling agent will often say ‘sell’. An architect will often say ‘renovate’. What is in your best interests? That is the real question. Understanding the nuances of precinct and what the market often calls for in that precinct is another thing to consider. What is important though in all of this is when you do decide to buy, what is your ultimate plan for that property and what are you really buying? That is the real question to ask when you are making, what is for many, the biggest financial decision you will ever make.

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

34 Northcote Road Armadale – Justin Long/Justin Krongold, Marshall White

4 Georgiana Street Sandringham – Stephen Tickell/Tanya Pickering, Belle Property

3 Edward Street Hawthorn – Mike Beardsley/Richard Winneke, Jellis Craig

‘Off-market’ Properties:

• Renovated 2 storey townhouse, 3-2.5-1, Armadale – circa $1.75m
• Top floor 90s apartment, 2-2-2, ~170sqm + balcony, South Yarra – circa $2.05m
• Renovated townhouse, 3-3.5-1, ~165sqm, South Yarra – circa $2.1m
• 1940s family home, 5-2-4, dated, ~970sqm, Canterbury – circa $6m+
• Renovated mid-century, 5-3-4, ~810sqm, Balwyn North – circa $4.2m
• Californian Bungalow, 5-2-2, ~705sqm, needing reno, Surrey Hills – circa $2.1m
• Renovated 2 storey brick single fronter, 3-2-1, Hawthorn East – circa $1.9m
• Contemporary townhouse, 3-2-1, near amenities, Middle Park – circa $2.15m
• Victorian single fronter, 2-1-0, renovated, Albert Park – circa $1.45m
• Updated single fronter, extra width w OSP, 2-1-2, St Kilda – circa $1.55m
• Single level Edwardian 4-2-3, ~840sqm, Elsternwick – circa $4.0m+
• Single level, renovated, 4-1-2, ~640sqm, Brighton East – circa $2.7m
• Mediterranean style family home, 7-4.5-8, Brighton East – circa $4.2m
• Timber Edwardian, 4-2-0, ~520sqm, North Brighton – circa $2.85m
• Renovated contemporary 4-2.5-2 family home, Hampton – circa $3.4m
• Renovated family home, 5-3-2, indoor pool, ~825sqm, Beaumaris – circa $2.85m

Four weeks into the Melbourne property market and there is definitely a pep in the step of both buyers and sellers. On the weekend just past, which was, we think, the first or second ‘real auction’ weekend of 2024 , the REIV recorded a clearance rate of 75% for the 746 auctions held, which is a healthy number. While buyers and sellers both have the confidence simultaneously to transact, it is still a mixed bag when it comes to results.

Key insights –
Large family homes in signature suburb streets are performing very well.
Land in Boroondara is popular (particularly land without restrictions or heritage overlays), with many buyers gaining confidence to again build new homes.
Generational period family homes with floor plans not suiting modern day living or requiring complicated renovations are losing favor with buyers.
The townhouse market is fickle, as buyers become more aware of build quality and the quality of spaces (i.e. outlook, light and space).

And:

The market is price sensitive.

In order to sell, vendors must get their price right, and it’s key that there’s a good understanding of what their property is and where it sits in the market. There are several components determining a vendor’s price.

Quote – the price set by agents to attract buyers to their home.
Reserve – the price they’re willing to sell for on auction day (most buyers expect this to be in the quote range).
Bottom price – the price willing/needing to sell if the home is still for sale in six month’s time.
Dream price – exactly that, vendors shouldn’t spend too much time thinking about it!

Buyers are becoming increasingly frustrated to see properties pass in (both within and above the quote range), with the vendors wanting a significantly higher price than the quote.

We understand, from a selling point of view, that the quote (along with photos) is one of the first things that attracts a buyer to a property and if it is quoted too high, they will not come through, making it very difficult to get a campaign back.

You may recall our comments around ‘listing’ in our December blog, where a number of agents appraised the same property with a variance of up to $1 million between the highest and lowest appraisal.

That property went to auction on the weekend and passed in on a vendor bid.

To keep things confidential, hypothetically let’s say the property was appraised for $2-3 million.

The agent who said they could get $3 million won the job.

They then advertised the property for sale for $2.4-2.6 million (well below the price they said they could get).

It passed in for $2.5 million on a vendor bid.

So, is the property worth $2m, $2.5m or $3m?

Were the vendors wrong to want to believe their house was worth more than the market? Maybe the agents really thought it was worth that much. The Statement of Information, however, wasn’t able to show any comparable homes. Of course, it hasn’t sold yet, so maybe they will still get it …

If the vendors are only willing to sell their home for their dream price, perhaps it is the agent who was dreaming or are they hoping that because the vendors have invested a lot of money and time to sell their home, that they will eventually come down to the market.

Either way, it leaves a lot of people (both buyers and sellers) frustrated and disheartened with the process.

On another note, we are seeing a number of downsizers struggling to find properties that may suit their needs after selling their larger family homes.

Downsizers want to believe the advice of their financial advisers, that they should sell their large family homes to move into a smaller home of lesser value, allowing them to reduce debt and/or put additional funds towards their retirement plans.

It sounds great and, for some, this works.

In reality, however, it can be a different story. Many buyers come to us after 20, 30 or more years in their family home, unaware that the home they have just sold may not even be enough money to buy something smaller and more suitable for their retirement.

It can be quite a shock to realise that they may no longer be able to live in the suburb they have always lived in, or that their only options are an apartment, villa unit or two storey town house (bedrooms upstairs!), often needing a cosmetic renovation, in their desired price range and location.

Downsizing the family home doesn’t necessarily mean downsizing your investment in the property market. It can actually sometimes require more money for the purchase than the amount the family home was sold for.

Downsizing is about reducing the often physical obligations that a larger property demands to ease the burden on vendors physically and emotionally, so they have less stress on their bodies and more time to do what they want to do after years of work.

It doesn’t mean that downsizers want to move into a ‘shoe box’. They still want family gatherings, often involving children and grandchildren, so they need more space than 70 to 100sqm apartments being built may offer, and that is why the downsize often isn’t downsizing financially.

There are options available for downsizers and we have helped many buy homes that work for both their current and future needs (and budget). But, before selling the family home, it is good to know what you may or may not be able to afford, as financial planning advice doesn’t always cover this.

The market will take a pause now for the Labour Day long weekend, then solid auction numbers come for the March 16 and 23 weekends How quickly the year goes – we are nearly at Easter!

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

‘Off-market’ Properties:

• Multi-generational home with sep. villa, 5-3-3, ~690sqm, pool, Beaumaris – circa $2.85m
• Large 80s home w. views, 5-3-3, ~720sqm, pool, Beaumaris – circa $3.4m
• Californian Bungalow, Castlefield Estate, 4-2-2, ~600sqm, Hampton – circa $2.6m
• Modern 2 storey, 4-3-2, ~440sqm, key position, Hampton – circa $3.75m
• Timber Edwardian, 4-2-2, ~760sqm, pool, North Brighton – circa $3.65m
• Edwardian 2 storey family home, 4-2-1, ~650sqm, pool, North Brighton – circa $4.25m
• Hamptons style family home, 4-3-2, pool, Sandringham – circa $4m
• Secure Townhouse, 4-3-2, North Brighton – circa $2.7m
• Contemporary family home, 5-3-3, ~650sqm, Brighton East – circa $3.7m
• New home site ~720sqm, 18m frontage, walk to beach, Beaumaris – circa $2.2m
• Edwardian family home, 4-2-0, ~390sqm, Elwood – circa $2.4m
• Renovated period single level, 4 bed, ~660sqm, Camberwell – circa $2.4m
• Family sized Townhouse, 4-3-2, master ground, Camberwell – circa $2.0m
• Modern large family home, 5-4-6, ~900sqm, Camberwell – circa $7.0m
• New home site, city views, ~640sqm, Kew – circa $3.4m
• 60s single level 3-1-2, ~640sqm angled block, Kew – circa $2.4m
• Fully renovated single level villa, 2-1-1, Glen Iris – circa $1.35m
• Californian Bungalow style, 5-4-4+, ~860sqm, pool, Malvern East – circa $5.4m
• Fully renovated single fronter, 3-2-0, ~300sqm, Armadale – circa $2.85m
• Period brick 2/3-1-1, looking for update, ~290sqm, Prahran – circa $1.5m
• Townhouse, 3-2-1, walk to amenities, South Yarra – circa $1.5m
• Victorian brick single fronter, 3-2-1, two storey, Fitzroy North – circa $2.4m

Auction Spotlight:

9 Hughes Street Malvern East

A crowd of about 30 gathered in the family friendly street to witness this auction.

On offer was an original Spanish Mission brick home, that had been renovated and extended back and up around 20 years ago – so a little dated, but with good fundamentals of bedroom separation, easy front-to-back flow and generous volume.

Auctioneer David Sciola gave a concise preamble and looked for bids in the lower part of the quoted range, and while none were forthcoming, announced a vendor bid of $2.85m. It didn’t take long for two bidders to take part in measured bidding, with the property passing in at $2.91m and eventually sold after for an undisclosed result just over $3.0m. Pretty good result for buyer and seller alike here.

41 Vincent Street Sandringham

The secluded front garden provided a relaxed location for the crowd of neighbours and prospective buyers at the auction of this well presented single level home. Set within the beautiful Vincent Street, the home appealed to a mix of downsizers, smaller families or professional couples looking to enjoy an indoor-outdoor lifestyle near the amenities of Sandringham. The home had been quoted $2.4-2.5m, before being lowered to $2.2-2.35m during the campaign. The higher starting point was likely where the vendors really wanted to see the sale, with post auction negotiations unable to seal the deal after being passed in for $2.25m on a genuine bid. The home remains for sale at time of publishing, at the second SOI range.