In This Week’s How’s The Market | Edition 150
Many buyers are asking the same question right now.
Is uncertainty creating one of the best buying opportunities Melbourne’s Inner East has seen in years?
The start of the year has not unfolded as expected. After rate cuts last year, many anticipated strong momentum. Instead, hesitation has taken hold.
A February rate increase from the Reserve Bank of Australia lifted the cash rate to 3.85%, with further hikes being discussed. Combined with an upcoming election cycle and constant media coverage, confidence has slowed.
Uncertainty does not necessarily mean falling prices.
Often, it simply means fewer people are willing to act.
What The Auction Market Is Showing
Recent auction data across Melbourne highlights this shift clearly.
Auction volumes jumped significantly week-to-week, yet clearance rates only moved slightly higher, sitting around the low-50% range.
In the prestige market above $1.5 million across Stonnington, Boroondara, Port Phillip, and Yarra, clearance rates have tracked slightly below the broader market.
That is unusual.
Typically, higher-end homes perform stronger.
Many auctions are now seeing limited bidding or vendor pass-ins, with negotiations continuing privately afterwards.
This is not necessarily a failed market.
It is a cautious one.
Why Clearance Rates Don’t Tell The Whole Story
Headline auction numbers combine vastly different property types.
A single clearance rate includes everything from small accommodation units through to multi-million-dollar family homes.
Understanding what actually sells matters more than the percentage itself.
Recent campaigns have also shown wide quoting ranges and unexpected results, with some homes selling hundreds of thousands above guides.
In uncertain markets, pricing becomes harder to judge.
That creates opportunity for prepared buyers.
Sentiment Versus Fundamentals
Reporting from realestate.com.au recently highlighted auction withdrawals linked to rate fears.
Mortgage stress projections and economic commentary understandably make buyers cautious.
Articles circulate quickly.
Friends and family share warnings.
Confidence pauses.
But sentiment often moves faster than fundamentals.
Melbourne’s market has been relatively flat for the past two years, yet this sits comfortably within its historical cycle.
Periods of consolidation have regularly been followed by recovery.
Why Buyers Gain Leverage
When competition reduces, negotiation power shifts.
Properties passing in with only one genuine buyer create very different conversations behind closed doors.
Auction day carries enormous emotional pressure for vendors.
If bidding fails to materialise, certainty becomes valuable.
Agents and sellers may prioritise securing a deal rather than restarting campaigns.
For buyers who understand their numbers and remain disciplined, this environment can deliver significant savings.
The Long-Term Outlook
Forecasts remain optimistic despite short-term hesitation.
KPMG expects Melbourne prices to grow steadily through 2026 and 2027, while ANZ estimates the city is currently undervalued compared with historical pricing relationships to Sydney.
Gaps between major cities rarely close slowly.
When sentiment changes, momentum can return quickly.
Interstate buyers are already noticing affordability differences and beginning to relocate.
Why The Inner East Still Stands Out
Short-term sentiment changes.
Fundamentals do not.
The Inner East continues to benefit from heritage housing scarcity, established streetscapes, and proximity to leading schools.
These factors cannot be replicated through new supply.
Older homes on land and boutique apartments remain limited assets.
Long-term demand tends to follow scarcity.
So, Is Now The Time?
There is no perfect moment to buy.
Timing should depend on readiness rather than headlines.
Buyers with finance organised and clear requirements may find less competition and more negotiable vendors in the months ahead.
Uncertainty makes markets uncomfortable.
But historically, it has also created opportunity for those prepared to act.
What The Agents Are Saying
- Auctions are quieter, but well-priced homes still attract interest.
- Upper-end properties are seeing longer days on market.
- Off-market and pre-auction opportunities can offer significant value.
- Knowledge of your numbers and market trends is critical to secure the best deals.
The Wow Factor!
34 Motherwell Street, South Yarra, Vic 3141
South Yarra Contemporary Estate
Why it WOWs:
- Stunning modern design with lift‑connected interiors.
- Expansive living and entertaining zones opening to a north‑facing pool.
- Gourmet kitchen with Miele appliances and quartzite benches.
- Luxurious bedrooms, deluxe bathrooms, and a 400‑bottle wine cellar.
- Secure parking for up to five vehicles, rare in South Yarra.
- Prime location near trams, Hawksburn Station, Como Park, and shops..
Price guide : $6,900,000 – $7,500,000
Final Thoughts
Melbourne offers opportunity and timing advantage.
Prepared buyers can negotiate leverage when others hesitate.
Focus on fundamentals, such as location, property type, and long-term demand, rather than headlines.
Clarity and patience ensure your purchase fits your goals and not just the current sentiment.
If you or someone you know would like assistance to buy this year, book in a call and we can discuss if we can help.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at [email protected]
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
