In This Week’s How’s The Market | Edition 155
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Buyer’s Market Conditions Emerging
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Rate Hikes Are Impacting Premium Buyers
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Supply Is Increasing While Demand Softens
The Melbourne property market is shifting, particularly at the premium end.
Recent conditions are creating genuine opportunities for well-prepared buyers to secure high-quality homes below previous expectations.
Two consecutive rate hikes have impacted sentiment, reducing buyer confidence and shrinking borrowing capacity at higher price points.
At the same time, supply has increased significantly, with one of the busiest auction weekends in recent years bringing a large volume of stock to market.
Many buyers are hesitant due to ongoing economic uncertainty, geopolitical concerns, and election-related hesitation, resulting in fewer active bidders in the market.
When competition reduces, negotiation leverage can shift toward buyers.
A Quick Look at the Market
Higher value properties are often more sensitive to interest rate changes because buyers typically carry larger loan amounts.
Each rate rise reduces borrowing capacity, meaning fewer buyers are able or willing to compete at premium price levels.
At the same time, listing volumes have increased, creating more choice for buyers and increasing competition between vendors.
A large number of properties are passing in at auction, adding to the pool of available stock and increasing opportunities for post-auction negotiation.
Seasonal factors such as Easter, school holidays and Anzac Day may also reduce new listings in coming weeks, meaning the current window of opportunity may be relatively short.
When supply temporarily increases while demand softens, well-prepared buyers may be able to negotiate more favourable outcomes.
The 5 Ways to Buy a $3M
1. Target Properties That Have Passed In At Auction
With clearance rates in the mid-40% range, a significant number of properties are not selling under the hammer.
Passed-in auctions often indicate a gap between vendor expectations and buyer willingness to pay.
Post-auction negotiations can provide increased leverage, as vendors may adjust expectations after a public campaign does not achieve the desired result.
Many properties are also selling shortly after auction through negotiation, creating opportunities for buyers who remain engaged beyond auction day.
2. Use The Rate Hike Narrative To Your Advantage
Interest rate increases directly impact borrowing capacity, particularly for buyers purchasing above $2M.
As borrowing limits reduce, competition decreases at higher price points.
Referencing current market conditions rather than past peak sales can help anchor negotiations to today’s environment.
Comparable sales from stronger market periods may no longer reflect current buyer capacity.
3. Exploit Long Campaigns And Stale Listings
Premium properties are spending longer on the market, particularly those priced above $2.5 million.
Listings that remain active for extended periods may indicate that vendor expectations are adjusting over time.
Price reductions, extended campaigns, or a shift from auction to private sale may signal increased flexibility from vendors.
Longer campaigns can reduce marketing momentum and increase the likelihood of negotiation opportunities.
4. Structure Your Terms To Win Without Paying More
Negotiation outcomes are not determined by price alone.
Settlement timelines, deposit structures and contract conditions can significantly influence vendor decisions.
Flexible settlement periods, shorter timelines, or reduced conditions may provide value to vendors and improve offer competitiveness without increasing purchase price.
Understanding vendor motivations can allow buyers to structure offers that align with the vendor’s needs.
5. Use Comparable Sales, Not The Agent’s Price Guide
At the premium end of the market, comparable sales can be limited due to fewer transactions.
Agents may rely on previous price expectations that reflect stronger market conditions.
Reviewing recent comparable sales within similar locations, land sizes and property quality can provide a more accurate guide for negotiations.
Using current data can support realistic offers aligned with present market dynamics.
What The Agents Are Saying
Agents are reporting reduced buyer activity at inspections and auctions, particularly at higher price levels.
Some campaigns are being extended or adjusted due to limited competition, including auctions being postponed where buyer interest is low.
There are increasing instances of properties passing in with minimal bidding activity, creating more opportunities for negotiation after auction.
Price adjustments are also becoming more common shortly after campaigns begin, indicating vendors are responding to current market conditions.
In some cases, properties have sold after auction at levels below initial expectations, reflecting reduced competition in the current environment.
The Wow Factor!
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- Landmark corner villa with timeless French charm
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Price guide :$4,100,000 - $4,500,000
Final Thoughts
Market conditions are constantly evolving.
Periods of uncertainty can create hesitation, but they can also create opportunity.
An increase in available stock combined with reduced buyer competition can provide favourable conditions for negotiation, particularly at the premium end of the market.
The current window may be relatively short as seasonal factors may reduce new listings in coming weeks.
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.
