Is It Still a Buyers Market?

In previous blogs, I’ve written about the different markets operating across Melbourne.

The sub-$950,000 first-home buyer market has been thriving, while conditions for family upgrade homes—particularly through the mid-$1millions—have generally been softer.

Over the past fortnight, however, I’ve noticed a shift.

That mid-$1 million segment has started to move. We’re seeing more bidders at auction, properties selling above expectations and increased competition for quality homes. This was also reflected in the weekend’s preliminary auction clearance rate, which nudged the 70% mark.

A fortnight ago, I attended an auction for a property in a great location with all the fundamentals of a good home. However, it required significant investment to update it. It was certainly not turnkey—the type of property that has typically performed best in this market. In fact, it was quite the opposite. Even two months ago, I suspect it may have struggled to sell.

The opening bidder attempted a knockout bid approximately $30,000 above the top of the quoted range. To my surprise, two other bidders became involved. The property eventually sold for $125,000 above the top of the range. While only three parties actively bid, several others in the crowd looked particularly disappointed.

Isn’t this supposed to be a buyer’s market where you can pick up a bargain?

This most recent weekend, I had several auctions on my radar. During the week, I received a barrage of messages from agents, with at least four of those properties receiving acceptable offers before auction and selling early. Every one of those offers was above the quoted price range. The agents handling another property managed to close the floodgates and proceed with the scheduled auction. I couldn’t find a car park in the street. There were people everywhere, a coffee van and a multitude of agents ensuring every potential buyer was being shadowed.

It certainly didn’t feel like a subdued market.

Finally, there was a property scheduled for auction the following weekend that I had been stalking for my clients. While I was getting their ducks in a row, another buyer submitted an offer $35,000 above the top of the quoted range. The auction was brought forward to an online auction over the weekend, where four bidders became involved. All four remained active until the price reached $100,000above the top of the range.

Unfortunately, my clients finished as the underbidders,with the property eventually selling for $127,000 above the quoted range.

So, is it still a buyer’s market?

While sections of the media and various property pundits continue discussing a crashing market, the story on the ground—particularly across Melbourne’s inner ring suburbs —is looking quite different.

But that doesn’t necessarily mean the entire Melbourne market is suddenly increasing. When agents quote properties extremely low, competition will naturally create an impressive-looking result above the range. A sale price well above the quote does not automatically mean the market has risen by the same amount. I’ll be interested to see what the broader data tells us at the end of the quarter.

For now, my advice remains the same: every property requires—and deserves—its own independent due diligence.

There will always be factors that push the price of one property higher, while another nearby attracts subdued interest. Melbourne is not one market, and even within the same suburb, two seemingly similar properties can perform very differently.

Before bidding, have a conversation and bounce your thinking off an independent property expert. You need to know, firstly, that it’s the right property—and secondly, that you have realistic expectations about where the sale price is likely to land.

And most importantly, don’t let a media headline determine what an individual property is worth.

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