Multiple factors impacting Melbourne property market
The more recent trend toward buyers preferring the ready-to-move-into homes over the ‘renovator’s delight’ or new build sites is potentially here to stay and we are noticing more and more buyers are prepared to pay a premium for it.
Another major player in the new build arena collapsed last week, leaving around 1500 clients unsure of their futures. This is likely to encourage more buyers to purchase an existing home, rather than land to build, increasing demand on a market already in low supply.
While land has always been considered the key factor in underpinning property values in Melbourne, the current trend to buy ‘turn key’ established homes suggests that this could be becoming as important, if not more important, than the land on which it sits.
Since the Covid lockdowns, Victorians have put more focus on what is important to them – for themselves, for their families, for their well-being and for their comfort.
The home has taken on a new meaning. It is not just a house for after hours and somewhere to sleep at night. It has become our sanctuary, our work place, our school space, our castle and our kingdom.
While position is still important, perhaps even more important now is the house itself. We have seen this trend strengthen as the building industry suffers collapse after collapse, diluting the confidence of buyers who are quickly realising the increased value of a home they can live in straight away.
Current issues we see influencing the market as we move toward winter include:
- Strong competition for ‘turn key’ homes if stock remains low.
- An increase in land / new build sites as some vendors no longer have the appetite or the budget to build.
- Fewer buyers interested in purchasing properties that need major works or replacing.
- Land tax increases pushing some vendors to sell.
- Landlords unable to afford to improve properties to meet minimum requirements for rental properties being pushed to sell.
- Demand increasing for rental properties – local demand and from migrants. Some people are now being forced to buy, rather than rent.
- More international buyers returning to the market.
- Agents moving toward more EOI (expression of interest) campaigns to manage the sales process, providing less transparency for buyers.
- Low Australian dollar making housing more affordable for overseas buyers.
- Construction workers continuing to choose less financially risky alternatives (many have made the switch to large government builds); therefore, fewer skilled trades available for private builds.
- Building costs to remain high while trades are in short supply.
- Low stock cycle to continue – many vendors won’t sell until they have bought, but can’t find anything to buy because stock is so low.
With a number of agents saying vendors want to wait until Spring before considering their next move, buyers should understand what they’re looking for and where it sits in the market. This will mean they don’t miss their opportunity to buy, as it could be a while waiting for the next opportunity to come around.
Highlights – ready to move into homes and homes that could be updated, but don’t need to be straight away:
- 14 Motherwell Street Armadale – well located, two bedroom townhouse (all bedrooms upstairs) – 5 bidders – $1,562,500
- 9 Daly Road Sandringham – original ‘Inform’ home, good floorplan, walk to most amenities – 5 bidders – undisclosed over $2,700,000
- 5 Ardrie Road Malvern East – neat period home, well positioned on block, north rear – 4 bidders – $2,330,000
- 22 Gilsland Road Murrumbeena – good location, north rear, single storey home with garaging – 4 bidders – $2,110,000
- 24 Bent Parade Black Rock – newer build home with pool, great location – 3 bidders – $3,920,000
- 4 Lyndhurst Crescent Hawthorn – good family home – 3+ bidders – $4.110m
- 11a Mayfield Avenue Camberwell – single level villa unit, close to amenities – 3 bidders – $1,245,000
Some of the better properties currently on the market; an architect’s view
41 Victoria Road North Malvern – Andrew James/Michel Swainson – Belle Property
28 Miller Grove Kew – Andrew Gibbons/Shamit Verma – Marshall White
13 Lileura Avenue Beaumaris – Noel Susay/Adam Gillon – Buxton
- Californian Bungalow, 2 storey, pool, north rear, Hampton – circa $3.4m
- Modern family home, 4-3-5, pool, west rear, Brighton – circa $11.5m
- Beachfront ground floor apartment, 3-3-2, ~240sqm, Brighton – circa $7m
- Extended period home, 4-3-3, ~720sqm, east rear, Sandringham – circa mid $2m
- Fully renovated semi-attached, 2 storey, 4-3-2, ~400sqm, Brighton East – circa high $2m
- Single level townhouse, 3 bed, DLUG, west courtyards, Brighton East – circa early $2m
- Fully renovated single level Cal Bung, 3-2-2, north rear, Brighton East – circa high $2m
- 2 storey upside down TH adjoining golf course, 3-2.5-3, Beaumaris – circa early $2m
- Double storey brick family home, 5-3-2, approx. 970 sqm, Malvern East – circa $4m
- Edwardian family home, 5-2-2, approx. 1,388sqm Hawthorn – circa $6.5m
- Townhouse, 3,3,2, tandem garage, Hawthorn East – circa $1.45m
- Cal Bung 5,3,2, in need of renovation (STCA), approx. 875sqm, Camberwell – circa high $3m
- Renovated Edwardian cottage, 4-2-1, approx. 283sqm, south rear, Hawthorn East – circa $2.2m
- Landmark home, 5-4-4, ~3,080sqm, court & pool, Canterbury – circa $10m
- Single level period home, renovated, 4-2-2, walk to trains, Malvern – circa $4m
- 2 storey dated renovation Californian Bungalow, Malvern East – circa early $4m
- Renovated modern home 5-3-2, pool, Armadale – circa $9m
The single level 3 bed, 2 bath, garage and 2 living zone property at 63 Fewster Road was always going to attract a range of buyers. The crowd attending was a mix of downsizes, as well as young couples looking to get into the Hampton area. While the home is looking for an update, this could be done over time. The quote of $1.1-1.15m was an attractive proposition for buyers. Adam Gillon headed up the Buxton team on auction day, quickly receiving a $1.0m opening bid. 4 bidders joined in the action, quickly pushing the property past its reserve and eventually selling for $1.257m. A sound result for what was on offer.