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.