In This Week’s How’s The Market | Edition 157
Right now, in Melbourne, there is an incredible opportunity for people who are upsizing into their second, third and forever homes.
However, there is also more risk than ever for those who get it wrong.
And right now, there is blood in the water in Melbourne’s property market…
Particularly, in the price points above $1.5m around inner Melbourne.
So today, we are going to go through some of the biggest mistakes upsizers make and how to create a strategy for you so that you can minimise risk and maximise your results.
How To Upsize in an Uncertain Market (Without Taking on Unnecessary Risk
1. Always Run Your Buy & Sell Campaigns At The Same Time
This is probably the biggest mistake I see.
People sell… and then start looking to buy.
Or buy without having market feedback on their home.
And by that point, they’re on the back foot.
You want to be inspecting properties while buyers are inspecting yours.
You want to be speaking to agents, understanding what’s actually happening on the ground, getting a feel for how competitive things are.
At the same time, you’re getting real feedback on your own property.
Because the reality is… what you think your home is worth and what the market is willing to pay right now can be two very different things.
If you sell first and then start learning the market, you’re forced to make decisions quickly.
That’s when people overpay or simply make mistakes that can cost them hundreds of thousands.
Simultaneous settlement – pro tip with removalists
2. Always Do What’s Harder First
If the goal of upsizing is to buy very obscure architecturally designed north-facing residences in your favourite estate of a particular school zone and they come up for sale once a year and budget is not a concern… you probably want to do that first so you don’t sell and end up homeless.
However, for most people and considering the market we are in…
You absolutely should consider selling first.
This is because we are in a buyers market and not a sellers market… in Inner Melbourne above $1.5m at least… This is why there is opportunity out there.
If you end up buying a $3.5m home and then have to sell a $2m home but find out that there are no buyers for your particular property right now, and you are forced to drop your price to bargain levels in order to get a buyer, this is a very bad exercise for you.
In order to reduce risk, do what is going to be harder first.
An example of when this is not the case in today’s market is when you are selling a property for below $800k.
What we are seeing on the ground is that this is still a mostly HOT market in Melbourne and regional Victoria.
This does not apply if it is a studio apartment in a high-rise in Southbank, however, if you have a 500m2 3 bed, 2 bath, 2 car brick house in Frankston – you’re probably going to get a quick and competitive result.
3. Be Conservative On Your Property’s Valuation
And I mean conservative.
I have had too many conversations over the last few weeks with brokers, bankers and vendors who have had clients purchase properties prior to selling and then had to make the tough decision of multiple price drops in order to get an offer on their property.
Sometimes their properties are selling for $200k or $300k less than what they ran all their numbers off.
Stress levels are extremely high.
They’re staring down the barrel of bridging finance.
And they’re forced to get a result, even if it is not a good one.
My advice here is to get multiple sales appraisals, take the lowest one as best case scenario and even budget your new purchase on 5% below that.
This way, if everything goes wrong and you need to make a major price adjustment down, you will still be more than okay.
And if things go well, you’re very comfortable.
4. Protect Yourself With Terms (Where Possible)
In a buyer’s market, you can typically stack more terms in your favour.
This is something most buyers don’t even think about.
They just focus on price.
But in a market like this, terms matter a lot.
You can start to get creative.
Longer settlements.
Shorter settlements.
Flexibility around timing.
License agreements, leasebacks – even subject to sale clauses are starting to come back in certain situations.
This is where you can actually reduce risk in a big way.
Especially as an upsizer.
Because your biggest problem isn’t just buying well… it’s managing the transition between the two properties.
If you’re only negotiating on price, you’re missing half the opportunity.
Unfortunately, I have also seen a few situations recently where vendors have jumped the gun or fumbled negotiations, which has led them to move into short-term accommodation whilst waiting for settlements and move belongings into short-term storage.
Not fun.
5. You Have To Buy Well
This is non-negotiable.
In this type of market, you don’t have the luxury of overpaying.
If you overpay in a rising market, you can sometimes get away with it.
In a flat or declining market, you massively increase risk.
So you need to be really clear on what something is worth.
Not the price guide.
Not what the agent is telling you.
Actual comparable sales.
And you need to negotiate properly.
Now, I’d rather buy a great property for a good price than a good property for a great price…
But that doesn’t mean you can just throw money at it because you like it.
That’s how people get stuck.
What The Agents Are Saying
Extremely cautious sentiment across the market right now from vendors.
Lots of people are putting off selling due to the market and seeing so many properties passing in around them.
Many agents have said that they have struggled selling lots of properties and signing up clients, however, A grade properties on A grade streets are still achieving huge results.
The Wow Factor!
64 Surf Parade, Inverloch, Vic 3996
Landmark dual-title coastal holding in Inverloch.
Why it WOWs:
- Rare 4,932 sqm (1.2 acres) across two titles opposite dunes and beach.
- Designed by Archier with strong indoor – outdoor connection.
- Native forest setting with total privacy and elevation into tree canopy.
- Premium finishes: timber, marble, travertine and Japanese tiling.
Price guide: $5,500,000 – $6,000,000
Final Thoughts
Upsizing in Melbourne’s current market presents real opportunity, especially in the inner ring above $1.5M, but only for those with a clear, disciplined strategy..
Without the right structure, the same conditions that create opportunity can quickly turn into unnecessary financial and timing risk.
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.
