Will the market change for the final quarter of 2022?  Most property platforms (media and databases) have taken to using emotive and sensational phrases to sell their papers and the reports don’t always provide a true reflection of what is happening out there.

There are definitely a number of factors that could support a further drop:

• Increasing interest rates
• Reduced access to finance 
• Increasing stock numbers (expected, but may not eventuate)
• November election looming
• Fixed rate vendors needing to sell as their fixed term ends
• Cost (dollars and trade availability) of renovating
• Indecision generally

However, there are also some factors that could result in the market staying the same, which we see as a more normal market, rather than a ‘down and out market’ that the media are pushing:

• Less stock (compared to previous years)
• Less good quality stock
• Opportunity (less competition)
• Buyers preferring to buy to upgrade rather than renovate
• A number of cashed-up buyers who believe now is a good time to buy
• Buyers who have been waiting a long time to buy and are becoming increasingly impatient
• Families looking to establish themselves in homes for the 2023 school year

In a slowing market, we tend to find that the volume of good properties reduces and unless a vendor needs to sell (already purchased, divorce, death, relocation etc), there is a preference for vendors to hold onto their homes.

As a result, fewer quality properties are available to purchase and the gap between the A graders and C graders grows. The current market is one where, if you have purchased a C grader in a flying market and need to sell, you may find yourself having to accept less than you paid for it (depending on when you purchased it).

Many buyers think that buying anything is better than buying nothing when the market is racing; however, if you purchase something that doesn’t work or has some fundamental issues, it can really hurt financially as well as add to the already stressful decisions associated with selling a property, if you need to sell it down the track (particularly if it wasn’t purchased that long ago).

We believe stock levels will play a big part in determining where 2022 finishes up at the end of the year. At the moment, stock is still considered low and the good stock, quality downsizers and family homes (ready to move into), is even lower.

At the inspections for a downsizer property at 1 Nyora Street Malvern East (a well located, single storey home, in original condition but a quality build with good proportions) the queues were reminiscent of the post-lockdown opens, all waiting for the agent to arrive.

Originally quoted under $2 million, the response was overwhelming and the auction was brought forward, selling for an undisclosed amount around $3 million, supporting our belief that if it’s good, there is still solid demand and currently no shortage of buyers willing to step forward.

Some other quality properties that have sold well more recently include:

• 12 Hawthorn Grove Hawthorn, pretty period home with good front rooms on large land, ready for a new rear update, sold for $7,920,000.
• 19 The Avenue Hampton, sold for an undisclosed amount in the higher $5 millions.
• 59 Union Street Armadale, renovated period home on 800sqm, sold for $7,950,000.
• 281 Richardson Street Middle Park, double fronted period home on 371sqm, great street, ready for the next renovation, sold for $5,050,000.
• 14 Christowel Street Camberwell, renovated period home on 1180sqm, sold for $6,700,000.
• 17 Kerferd Street Malvern East, family home on 920sqm, modern style home in a predominant heritage precinct, sold for $5,370,000.

The above properties represent what we think are good properties. There are many more we could list that have compromises, require significant work or have been priced incorrectly, that have struggled to sell and are still for sale.  Will these sell before the end of the year? Only time will tell.

We do feel there are quite a lot of off market properties around at present and this can be a good way for a seller to achieve a result without risking a failed campaign.

With around 80 days until Christmas and the Melbourne Cup weekend not too far away, there may not be too many properties advertised publicly in the next couple of weeks. If the market is to pick up this year in terms of volume, sellers may back themselves in for a late sprint to get in before the summer break. Or they might just decide to wait until early 2023. As always, it will depend on the motivations of the vendor.

 

Some of the better properties currently on the market; an architect’s view

 

64 Hawthorn Grove Hawthorn – James Tostevin/Désirée Wakim, Marshall White

53 South Road Brighton – Simone Chin/Suzie Farrell, Atria Real Estate

28 Kerferd Street Malvern East – Matthew Morley/Jeremy Rosens, Gary Peer

 

‘Off-market’ & ‘Pre-market’ Properties:

• Contemporary 4 bed home, east rear, Toorak – circa $5.25m
• Renovated Californian Bungalow, single level, Malvern – circa $3.5m
• Double storey 1920s home, renovated, near Central Park, Malvern East – early $5m
• Neo-Georgian 2 storey family home, Kew – circa $4m
• Tudor style home on approx. 870sqm, Camberwell – circa $3m
• Renovated Victorian, ~800sqm, Camberwell – circa $6m
• Federation family home, ~890sqm, Camberwell – circa $6m
• Basic Cal Bung/land, east rear, approx. 1100sqm, Kew – circa $5.8m
• Single level Edwardian near amenities, Brighton – circa $3m+
• Extended art deco family home, central Brighton – circa high $4m
• 2 storey Californian Bungalow, ~630sqm west rear, Hampton – circa early $3m
• Modern 2 storey executive style home, Brighton – circa high $3m
• New home site near amenities, NW rear, ~650sqm, Brighton – circa high $4m
• Victorian family home, ~900sqm, good position & car access, St Kilda East – circa $4m