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.