Melbourne Market Starts Strong + Off Markets Galore
In This Week’s How's The Market | Edition 96
Melbourne Market Starts Strong + Off Markets Galore
Sophisticated Family Retreat in Coveted Balwyn High Precinct
Annual change in construction costs picks up pace
Melbourne Market Starts Strong + Off Markets Galore
I always find it interesting to see how the first couple weeks of the year play out and I think it gives a good sentiment check from buyers and agents alike.
Last year, it seemed like a lot of agents were working right through the Christmas season and things kicked off early with many listings coming on in mid Jan for mid Feb auctions.
However, this year it feels very much the opposite from the agent perspective.
Across the inner Melbourne and eastern & south eastern corridors, it looks as though many agents have taken extended breaks with many only starting back this week and scheduling campaigns to launch online from next week, the final week of January.
Buyers, on the other hand, seem to be out in force.
On Saturday I attended a property in Hawthorn that had been on the market since November. I spoke to the agents about it in December and they were struggling with the campaign. I told them I thought it was overpriced and they agreed that interest had been below their advertised price.
I attended the property on Saturday to see how flexible the vendors would be in the new year and to my surprise, there was a line forming outside the property 15 minutes before the opening started.
The agent ended up opening the property early and 5 minutes after the opening was scheduled to start, they already had 25 groups checked in. They received an offer on the same day and the property is currently under offer.
This property was priced at $1.3m.
I spoke with a few other agents to see how their inspection numbers were across Stonnington & Boroondara.
Another agent said that their office only had two properties open, however, they had 87 groups checked in between them.
Many agents have echoed similar sentiments.
Additionally, my emails and texts have seen a huge upswing in off-markets that are being sent out as agents are getting properties prepared for March campaigns.
I think this is also largely due to a lot of agents returning to work and seeing my client brief emails from December and early January and looking to get some quick wins under their belts.
The Wow Factor!
5 Hertford Crescent, Balwyn, Vic 3103
This family residence in Balwyn High School zone is a stunning architectural masterpiece, showcasing European-inspired opulence and showcasing a new standard of luxury.
The vast two-story location presents a fusion of classical grandeur and contemporary finesse, enhanced by a massive columned façade and wrought iron gates.
The grand hallway boasts intricate ceiling designs, French-inspired detailing, and bespoke oak parquetry flooring, complemented by a custom-built oak staircase and natural light from a stunning leadlight skylight.
This prestigious new home is ideally situated in a quiet crescent area, just a short distance from the famous Maranoa Gardens and Beckett Park, as well as top-notch Balwyn Village dining options and retail establishments, trams, Box Hill Central, Westfield Doncaster, and the Eastern freeway. It also features a remote-controlled internal double garage and low-maintenance gardens.
Unveil a new level of family luxury and scale in the highly sought-after Balwyn High zone.
Price Guide: $5,800,000 - $6,200,000
In The Media
Annual change in construction costs picks up pace
According to CoreLogic's most recent Cordell building Cost Index (CCCI), residential building costs increased 3.4% in the 12 months ending in December 2024, the most annual increase since the year ending in September 2023 (4.0%).
Construction costs decreased to below 1.0% in 2023 and first half of 2024, accelerating quarterly growth to align with pre-COVID decade average, boosting annual trend.
CoreLogic Economist Kaytlin Ezzy said the latest data represents another challenge for an industry that is already struggling.
The recent increase in construction costs, despite being 40 basis points below pre-COVID average, will be unfavorable for builders struggling with tight profit margins.
The CCCI has increased by 30.8% since the start of COVID-19, presenting significant profitability challenges for residential construction companies.
The construction industry is facing a potential shrinkage in its construction pipeline, in addition to labor challenges and compressed margins.
She said building commencements have trended lower, with ABS data for new dwelling commencements over the year to June 2024 at 10-year lows.
The 2023-2024 Financial Year saw a significant rise in insolvency cases, with 2,832 construction companies becoming insolvent, largely due to a combination of factors.
Queensland experienced the most significant increase in construction costs (1.2%) across all statesWhile, construction costs in New South Wales, Victoria, and Western Australia increased by 1.0% in the three months to December, while South Australia saw the smallest increase at 0.9%.
This quarter saw mixed results with both increases and decreases across various categories, with labor being a consistent driver of cost increases.
Final Thoughts
I have a feeling that 2025 is going to be a big year for real estate in Melbourne.
Our enquiries have been strong to start the year and sentiment on the ground seems more positive than last year with more investors returning to the affordable markets.
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 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.
