In This Week’s How’s The Market | Edition 163
How Each Price Point Is Performing Right Now
The Two Speed Market Above $2m
How Each Price Point Is Performing Right Now
Melbourne recorded 1171 auctions last weekend with a clearance rate of 42.78%.
The top end above $1.5 million cleared at 50% across 54 auctions.
1. The Sub-$1 Million Market Is Still Performing Well
Despite the recent budget news – there is still competition across the board in the lower-end price points below $1m.
Particularly between $500k – $750k, where a lot of first home buyers and investors are competing.
I think this price point is actually going to be competitive after the budget…
My reasoning is that there are a lot of investors with a budget of $700k – $800k that were going to benefit from negative gearing – a lot of these investors will still buy, but now where yields are stronger at price points closer to $500k – $600k.
The first home buyers in this price point won’t be affected, so I simply think we will see an increase in investors in the lower end.
2. $1-1.5m Sweet Spot
This range has performed strongly across Melbourne – depending on the property type.
Villa units in this price range are in high demand across all of the inner east markets.
Lots of young professionals are searching for Victorian terraces in this price point too or homes with some period charm.
Apartments I’ve seen struggle a lot more at this price point.
Houses further out that are renovated and make good family homes are under huge competition and I’ve seen some big results here right now.
3. The $1.5m – $2.5m Market: Where Everything Changes
One theme dominates every market from $1.5 million upward.
Renovated versus unrenovated.
So many buyers have purchased properties that they planned to knock down and rebuild on or extend or even just complete a major cosmetic renovation.
Perhaps they thought they may wait a few years to help them save a bit more before completing this renovation/build, though now they have gone and actually gotten quotes for the works and they have come in significantly above expectations.
I have heard this time and time again.
Now a lot of vendors are considering if it’s even worth it to try to go ahead with the process…
Or…
Do you just try to sell the current property as is and then find something that has been fully renovated or a recently built property and just buy that.
I can tell you that many of these vendors have decided to do exactly that and just look for a finished product.
This has meant that there is a real 2 speed market happening at the moment where well-done properties that are renovated, in a good position and a great block size are performing VERY well.
Even achieving some record breaking results with multiple bidders and strong competition.
The unrenovated properties, however, are passing in left, right and centre.
4. $2.5m – $5m Market
In this market, whilst we are still seeing the large disparity in number of buyers between the renovated and unrenovated stock, we are seeing a slightly weaker market overall.
This market has cooled off a lot this year.
As more properties are passing in at auction there is starting to form a build up of stock left on the market.
We are repeatedly hearing from agents that vendors are comparing their property to some of the larger sales in previous years and better markets.
5. $5m+ Market
Interestingly, there have been some great sales in the upper end of the market.
Huge amounts of off markets are available, as many vendors prefer to test the market and sell their properties privately.
We have been sent 20+ off markets in this price point in the last week.
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What The Agents Are Saying
Lots of buyers are after the same properties and when it comes to good stock, there aren’t many options.
I was chatting with an agent this week that is selling a villa unit.
Great floor plan, size and location but with no outdoor space at all.
It’s really struggling and passed in at auction about a month ago.
He told me that he has 5 or 6 buyers that are all after the exact product, but just with a better outdoor space and nobody is budging.
This agent along with many others are all calling vendors to try to list their properties, but a lot of the good homes are being kept off the market right now.
The Wow Factor!
20 Madden Grove, Kew, Vic 3101
Luxury Brand New Contemporary Residence in Prestigious Studley Park
Why it WOWs:
- Designed by renowned architects Herbert & Howes
- Striking curved façade on a prestigious corner allotment
- Exclusive Studley Park location surrounded by luxury homes
- Grand interiors with bespoke finishes and soaring ceilings
- Dramatic ribbon staircase with skylight feature
- Expansive indoor–outdoor entertaining zones
- Designer kitchen with Gaggenau appliances & butler’s pantry
- Elevated heated pool with alfresco BBQ entertaining
- Luxe six-bedroom layout with lavish main retreat
- Wine room, gym, study and multiple living spaces
- Imported Italian lift and premium security throughout
- Auto-gated entry with secure 4-car garage
Price guide: $8,500,000 – $9,000,000
Final Thoughts
Melbourne’s property market isn’t one market, it’s five different markets operating in isolation.
The renovation cost crisis has fundamentally changed buyer behavior above $1.5 million, with buyers choosing turnkey over $600,000-800,000 renovation bills that vendors still don’t believe exist.
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.
