Shackles Lifted: How One City’s Real Estate Market is Rebounding
Tristan Larkin - Tomii Buyers Agents
Buyer’s Agent | Expert in securing off-market and pre-market properties in Melbourne and the surrounds of VIC
In This Week’s How's The Market | Edition 88
Shackles Lifted: How One City’s Real Estate Market is Rebounding
Melbourne experienced the most significant monthly increase in its median dwelling price, rising 0.5% to $793,000, according to the PropTrack Home Price Index.
Adelaide and Perth experienced 0.4% and 0.3% price increases respectively, while Sydney and Brisbane recorded 0.2% gains, while Hobart and Darwin remained flat.
Surprising signs of growth
Melbourne experienced its first price growth in six months, marking a significant shift from a "subdued" growth compared to other capitals.
REA Group senior economist Ms Creagh stated that Melbourne has been the weakest-performing capital city market since the pandemic with houses being the cheapest relative to Sydney in the past 20 years.
The reasons behind this, according to Ms. Creagh, include a stronger building sector, a greater selection of houses for purchasers in Melbourne compared to other cities, and higher taxes for investors.
Although there is still a lot of ambiguity about the date of the first interest rate decrease, prospective purchasers are looking ahead to next year and the beginning of a downward trend in interest rates.
Melbourne-based agent and Buxton Brighton director Halli Moore was surprised to hear prices start to rise despite strong buyer activity throughout spring.
Adelaide's prices have risen, making units more expensive than those in Melbourne, with a median price of $609,000 compared to $608,000.
In October, Sydney's house prices reached a new peak, primarily driven by housing, with the median price rising to $1.45 million.
The western capital Perth experienced the strongest annual gain at 20.6%, followed by Adelaide at 14.9%.
In October, Western Australian regional areas experienced a 0.2% price decline, with Victoria's areas also experiencing a 0.1% price drop.
South Australia experienced a 0.6% increase in regional areas, with Barossa - Yorke - Mid North area experiencing the largest monthly increase of any SA4 in the country.
What The Agents Are Saying
Many agents are still saying that Melbourne's inner markets are in a buyers market, however, they are still getting results.
A very common piece of dialogue that I am hearing from multiple agents, which I am also seeing on the ground is that buyers are hesitant to go first and make offers.
At auctions, there may be one or two buyers who are interested, however, no buyer wants to make the first bid and so no buyers bid, the property passes in and then the campaign fizzles out after auction, only to have the price reduced and then multiple buyers coming back.
The exception for this is fully renovated properties.
Specifically, fully renovated period homes in great locations.
We are seeing some of these properties fetching great prices, significantly more than they would achieve in recent years and breaking suburb records.
We are going to auction for a client this Saturday on a fully renovated period home which is going to be very competitive with multiple bidders registered.
The Wow Factor!
What a gem for a discerning South Yarra connoisseur!
The magnificent Victorian mansion displays premium green spaces, ornate ceilings, bay windows, and intricate detailing. It has a north-facing frontage and Mason Street access, providing exclusivity and natural light, making it an ideal opportunity for those seeking to own a piece of South Yarra's history.
The property's appeal is enhanced by its proximity to the Royal Botanic Gardens and stunning views of Fawkner Park, offering a serene yet prestigious urban lifestyle.
Check out the facade and the period details!
Price Guide:$9,800,000 - $10,750,000
In The Media
The Australian property market is experiencing significant value growth, with new-build apartment prices expected to rise by 23% by 2026 due to a supply shortage.
New apartments are fetching higher premiums than older ones due to enhanced amenities like security, gardens, and gyms, with premiums ranging from 16% to 45%.
Rising construction costs, strict planning rules, and labour shortages are causing a severe undersupply in new apartment developments, particularly in urban centres like Sydney, Melbourne, and Brisbane.
Global construction costs are rising, forcing developers to raise prices or delay projects, exacerbating supply shortages, and apartment prices are expected to rise.
Why this is a trend to watch closely
New apartment prices are expected to rise, but established apartments offer a strong investment opportunity, especially in well-located, family-friendly properties.
Australians are shifting to apartment living due to affordability and lifestyle changes, but this shift comes with faster growth in apartment values than house values in many cities.
Final Thoughts
Melbourne has been in the spotlight from investors and opportunistic home buyers for the last 6+ months. It now appears that some green shoots are starting to sprout.?
If you or someone you know would like assistance to buy this year in these markets, 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.