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