Melbourne property market: hot or not?
The Melbourne property market over recent weeks has been particularly strong. We believe one of the reasons is that there is still a great demand and urgency from property buyers to buy, for many reasons: fear of missing out, having a greater appreciation/need of living at home, greater savings and not having much to spend on…. the list goes on. There is a lot of talk out there about there not being enough supply. We feel that supply is not necessarily just the issue but also the high demand from buyers.
Some other key observations:
- Bank loans are taking longer to process due to resourcing issues.
- Many people that bought in regional/Peninsula areas are possibly starting to question that move. As employers demand more people return to the office in person, some people are finding the extra travel onerous.
- While there will be a slight pause for Easter and school holidays, May is looking to be a particularly busy month (there are five Saturdays). With such a good steady run of selling opportunities, will this flush out a lot of the demand? By the end of May, we should know where the market is really standing.
All of the above is predicated on Melbourne not experiencing any significant future Covid-related interruptions.
As you might have read in the media, there have been some very strong results in the past few weeks.
Many homes have sold before auction, more often still with competition. There are some properties out there, however, that have struggled or failed to attract buyers.
As a general rule when out and about, many buyers have decided a good strategy is just add 10-20% to the quote and you’ll be about right.
That is one strategy, but what if the quote is accurate already? Do you add 20% and then make an offer? You could be the only buyer at this level and well above everyone else – or possibly on your own.
While the market is still positive, if vendors don’t get the quote right, or, more importantly, if their expectations are not in line with the market, then they may not see a positive result for their home. For example, here are some pass-ins from last weekend:
- 16 Mountview Road Malvern – quoted $4.65-5.1m and passed in VB $4.65m
- 24 Anderson Street Malvern East – quoted $3.8-4.1m and passed in for $4.055m
- 22 Warley Road Malvern East – quoted $3.25-3.5m and passed in for $3.26m
- 6 Lileura Avenue Beaumaris – quoted $2.3-2.5m and passed in for $2.42m
- 20 Benson Street Surrey Hills – quoted $2.6-2.75m and passed in VB $2.6m
- 20 Fairmont Avenue Camberwell – quoted $2.5-2.75m and passed in for $2.61m
- 130 Sackville Street Kew – quoted $4.7-4.9m then reduced to $4.5m and passed in for $4.59m
For the type of properties these were, in the context of ‘their’ market, these results did not necessarily surprise us. Vendors need to know how their property fits into the market. Just because a house around the corner achieved a certain price, it doesn’t necessarily mean that nearby houses will fetch the same.
There were also some very big sales over the last week:
- 107 Prospect Hill Road Camberwell – quoted $2.7-2.9m, sold just under $3.3m
- 72 Elgin Street Hawthorn – quoted $1.8-1.98m, sold for more than $2.4m
- 31 Carson Street Kew – quoted $4.18m, sold for $4.563m
- 12 Portland Place South Yarra – quoted $2.65-2.7m, sold for $3.34m
- 42 Toorak Road West South Yarra – quoted $4-4.4m, sold for $5m
- 11 Davie Avenue Cheltenham – quoted $1.85-1.98m, sold for $2.401m
- 69 Kerferd Street Malvern East – quoted $2.27m, sold for over $3m
- 30 Asling Street Brighton – quoted $2.7-2.8m, sold for just under $3.2m
So where to from here?
Easter (and the school holidays) may provide some time for buyers to pause and reflect. The recent results may also instill confidence in some vendors to take the plunge and put their homes on the market.
There could be an increase in homes for first/second time buyers in the market. Changes to the Residential Tenancies Act come into place this week, with landlords and their homes required to meet minimum standards of living for their tenants.
A number of landlords have owned homes for 20, 30, 40 years or more with little or no maintenance to the properties over the years. For some, costs to meet the new standards may be $50-100k or more, of which many may not have the cashflow to fund, possibly resulting in more choices for buyers if they are prepared to do some work. As we’ve found for some of our clients, looking for a B-grader that could become an A-grader could result in greater opportunities in the coming months.
Generally, however, Melbourne and Australia are continuing to prove a great and safe place to live. Expats are still moving back and families are wanting to enjoy their homes with the thought that if we are ever locked down again, at least it will be something a little more comfortable. Stock and interest rates remain low, so possibly things won’t be too different after all. But who really knows?
Some of the better properties scheduled for Auction; an architect’s view
85 Finch Street Malvern East – Joanna Nairn/Maria Vovos, Marshall White
44 Hawthorn Grove Hawthorn – Sam Wilkinson/Gerald Delany, Kay & Burton
- Edwardian on approx. 1,300sqm with court & pool, Brighton – circa $11m
- Timber Edwardian on corner block, Malvern East – circa high $2m
- Two storey brick Edwardian, 4-3-2, approx. 800 sqm, Malvern east – circa $5m
- Fully renovated Victorian Terrace, 4-2.5-2, South Yarra – circa $5.65m
- Brick Edwardian, 3-2-0, approx. 187sqm, Armadale – circa $1.8m
- Well positioned older contemporary home, approx. 720sqm, Camberwell – circa $2.3m
- Fully renovated/extended Edwardian w pool, Hawthorn – circa $6m
- Fully renovated 3 bed home, close to beach, Sandringham – circa $2m+
- Single level, fully renovated family home, Brighton East – circa $3.4m
- 3-4 bed period home on approx. 505sqm, St Kilda East – circa $1.8m+
- Contemporary family home on approx. 772sqm, Brighton – circa $5.75m
- Large, renovated, family home, approx. 800sqm, Elwood – circa mid $4m
- Updated 80s family home on over 700sqm land, Brighton – circa high $2m
- Timber single level Edwardian, pool, Brighton – circa $2.5m
- Extended period home, looking for update, Brighton – circa mid $3m
Positioned on the corner to Coppin Street, 52 Finch Street Malvern East offers the new owner the opportunity to work with the original front of the period home to create their dream family home (stca), on a good sized block of approx. 811sqm, with a bright north rear aspect. The front rooms deliver lovely proportions to work with, while the whole rear would benefit from a fresh start.
A large crowd of interested parties and neighbours came to watch or participate in the auction, run by Iain Carmichael on behalf of the Jellis Craig team. Opening with a vendor bid of $3.1m, two bidders dug deep to secure the property. The home ended up selling for a solid $3.575m.