How’s The Market? Melbourne’s Market Update
In This Week’s How's The Market | Edition 72
How’s The Market? Melbournes Market Update
Off-Markets Are Back
How Much Is A 1000m2 Apartment With City Views Worth?
How’s The Market? Melbournes Market Update
Are we back to a normal market yet?
If you’ve listened to or read previous podcasts/articles you would know that 2023 has been a turbulent year for real estate.
We have had a huge increase in net overseas migration whilst new dwelling approvals have been low, build costs have gone up, we’ve been in a rental crisis, stock on market has gone down and dwelling prices have gone up.
But as we enter the spring selling season, stock has come back so are we out the other side and heading into a normal market? Let’s take a look at some recent CoreLogic insights to find out.
Dwelling Values - Three Months Change to October
Melbourne has experienced a slower increase than some other capital city markets, however, it has still increased by 1.2% in value in the last 3 months and 2.4% over the past year.
National Sales Volumes
Interestingly, national sales volumes are returning closer to their 5-year average.
CoreLogic estimates there were 40,993 sales in October nationally, compared to a historic five-year average of 44,813 for the month of October.
Whilst this is great news for home buyers as more stock is now coming back to the market and transacting, it’s also important to contextualise this data with the other recent changes of the year.
The biggest change being that there is an additional 180,000 people in Australia from last financial year due to net overseas migration plus an additional 213,000 forecasted for the 2023 - 2024 financial year.
This means that whilst sales volumes and stock are increasing and they are higher than what they were last year, they are still below 5-year averages and will need to rise above the 5-year averages to be able to keep up with the increased demand.
Median Days On Market
This increase in demand has been felt in Melbourne's capital city market and is evident in our days on market as they have dropped from a median of 31 days on market in Oct 22 to 28 days on market in Oct 23.
On the ground, it appears that houses are selling much faster than apartments with units being roughly in between.
Dwelling Approvals
Both house and unit approvals continue to trend well below historic decade averages with dwelling approvals falling a further 4.6% in September.
What The Agents Are Saying
Listings are coming in for 2024.
There are now only 5 weeks left until Christmas… yikes.
This means for agents that when they list a house now, they are most likely going to plan it for a January to February campaign.
After catching up with an agent this week, he told me that he has already got 18 listed for campaigns starting next year.
We are now in the final run of properties for 2023 that will be coming online in the next week or so.
However, there are going to be a lot of properties transacting off-market this year that were due to come online next year if you know how to find them.
The Wow Factor!
1101/150 Clarendon Street, East Melbourne, Vic 3002
1000m2 apartment overlooking the city.
You need to have a look at the floor plan of how this apartment is laid out.
Plus check out some of the best city views money can buy!
Whilst this certainly does have a huge Wow Factor. I am struggling to see how it’s worth what they are quoting…
Some of the rooms look like they require renovating…
Price Guide: $29,000,000 - $31,000,000
In The Media
Will rising interest rates put the brakes on Australia's property market recovery?
The November rate rise had been widely expected after higher-than-expected inflation in the September quarter gave the RBA little choice other than to increase interest rates in order to get inflation back to its 2-3% target band within a reasonable timeframe.
This article reflects exactly what we covered in the first half of this weeks How’s The Market, though provides an interesting angle on why this months interest rate increase will be unlikely to stop price growth in its tracks.
Read more above.
Final Thoughts
We are now well past the bottom of the market and into our next growth cycle with each capital city market moving at very different speeds.
Whilst listings have increased, they have not increased enough compared to demand due to net overseas migration and low new dwelling approvals which is likely to continue the increase in dwelling values through to next year.
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 tristan@tomii.com.au
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.
