In This Week’s How’s The Market | Edition 164
Melbourne’s Huge Changes
Clearance Rates
Sentiment Shifts
Actual Examples
Melbourne’s Huge Changes – How Is The Market?
I was away over the last month.
A friend’s wedding in Sri Lanka and then a holiday to China.
And when I came back, it feels like a different market.
Macro Changes
The last interest rate rise from May 5th is starting to have its impact.
Investors are starting to come to terms with the effects of the budget and change their investing strategies – mostly focusing on lower price points and higher yields.
Developers seem to be coming back to the market as the new build negative gearing benefits are starting to have some effect.
And blue-chip family homes are struggling unless they tick all the boxes, in which case, they are selling under incredible competition.
So what’s actually going on?
Clearance Rates
According to SQM, Melbourne’s clearance rates for last weekend (Jul 19th) were 37.83% over 637 auctions.
Melbourne’s auction market has continued to trend downwards with our clearance rate dropping from 61.14% on the 24th of August in 2025.
The last time Melbourne’s auction market experienced clearance rates this low was in the lockdowns of 2021.
Our office tracks the clearance rates, specifically for the top end of Melbourne, focusing on the LGAs Boroondara, Stonnington, Port Phillip & Yarra.
This past week there were only 6 auctions with 3 selling.
Changes In Sentiment
Each market has seen extremely different changes in sentiment.
Every pocket seems to be performing in its own bubble.
Some agents have told me that they are lucky to get 2 groups through an open on a Saturday.
Particularly across the inner Melbourne markets.
Some really great agents have been telling me that there are certain properties that they simply cannot sell.
I’ve seen many vendors lose hundreds of thousands of dollars on renovations that weren’t considered appealing to the market in the $2m+ price point.
The Affordable Market
The biggest shift I have seen is a huge drive towards affordable properties – particularly blue-chip suburb apartments in Melbourne as well as villa units under $800k.
If we were to look at Cotality’s 3-month change in dwelling prices across Melbourne, we can see that the upper end has experienced the worst decline, estimated around a 4% drop, whilst the mid market has experienced a moderate decline at 1.9% and the lower end market has experienced a drop of 0.3%.
This is as a whole and dragged down by a lot of rubbish investor stock and 1-bed high-rise apartments in new builds.
When we look at top quality brick 2-bed, villa units in the bayside or 2-bed, 1-bath boutique apartments walking distance to amenities in great suburbs – I’ve seen stronger competition on these than I’ve seen in years.
Actual Examples
This year we have purchased a lot of high-quality properties that came with strong competition that you would expect to see in rising markets.
Collingwood – May
We purchased the above architectural residence in May at auction for circa $1.83m.
This is an example of a property that ticked a lot of boxes for a lot of people
At auction, there were 5 bidders.
Brunswick – June
This is a property we went to auction for in Albert St, however, we were the underbidders.
This is a really interesting example to me as this property ticked a lot of boxes for my client as well as the rest of the market.
Initially quoted $1,450,000 – $1,550,000, this property received over 60 groups in the first 2 weeks.
I had priced it at around $1.7m – $1.75m at the max.
This property sold at auction for $1.9m to a downsizer who had to have it.
Many agents in the area are still speaking about how big of a result this was.
Chelsea – July
This is a purchase we made last weekend.
A brick, 2 bed, 1 bath villa unit walking distance to the beach.
This property came online on Friday, as I walked into the home on Saturday the agent told us that if an offer came through, she would close offers on Saturday at 5pm.
We were 1 of 4 offers on the property and purchased this for circa $650k.
This is a property that last sold for $216,000 in 2017.
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What The Agents Are Saying
In my career, I’ve never heard more agents tell me how much they are struggling to find stock.
Unfortunately, I’ve also seen a lot of good agents leave the industry over the last 6 months too.
One great agent I was chatting with yesterday was telling me that he has never found it harder to move on some properties as well as close new listings.
A few agents have actually been telling vendors that it might be worth waiting a few more months before selling to try to get a better market in spring.
So many vendors are saying they will only test off-market campaigns right now as they are too scared to go to market.
I don’t blame them.
The Wow Factor!
20 Ethel Street, Malvern, Vic 3144
Round Edge Design
Why it WOWs:
- The most curved walls I’ve seen in a house
- Incredible open plan design of the kitchen
- Very unique for Malvern
Price guide: $4,000,000 – $4,400,000
Final Thoughts
The market is falling.
There are multiple pressure points affecting sentiment and prices, though it is very important to remember that all price points are affected differently.
Great homes still achieve great results.
The affordable market is picking up and likely to rise by the end of the year in many suburbs.
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.
