By Janine Ballantyne, Partner at Nelson Alexander
As we venture into the warmer months, it is imperative to examine the Melbourne property market with a discerning eye. The Melbourne property market has had solid changes over the past couple of years, experiencing both remarkable growth and a temporary slowdown. However, the tides have turned, and the market is once again showing signs of strength and resilience. As an experienced property consultant here at Nelson Alexander, I am pleased to share my insights on the current trends and opportunities that are shaping the Melbourne property landscape.
Buyer demand remains robust, and the scarcity of available properties has intensified competition at auctions, leading to outstanding results for sellers. In particular, renovated homes have garnered significant interest from buyers who appreciate the value and convenience of a move-in-ready property. However, concerns surrounding building costs and sourcing trades have led buyers to shy away from large-scale renovations. Instead, well-maintained or ‘turn-key’ renovated homes, especially on bigger blocks, are becoming highly sought-after gems, making them a challenge to find in the current market.
First-home buyers are playing a crucial role in driving the demand for apartments and townhouses. Interest rate rises have posed challenges for their borrowing capacity, making the typical first home purchase of a single-fronted Terrace further from reach. As a more affordable alternative, apartments and townhouses offer an enticing opportunity to enter the market and build equity in an asset rather than paying rent. Over time, this can be a stepping stone to leverage towards their next property. It is true that entering the property market can be a daunting task for first-home buyers, but they are now recognising the attractiveness of apartments and townhouses as accessible and viable options.
Reflecting on the recent past, the market experienced solid growth during the Covid period, peaking towards the end of 2021. However, concerns about interest rate rises prompted a temporary slowdown in 2022. Nevertheless, as interest rates settle and uncertainty regarding fluctuating repayments diminishes, market confidence is on the rise. This sentiment is expected to lead to a more balanced and predictable market in the short to medium term.
Considering these factors, prospective buyers and investors can capitalise on the current opportunities in the Melbourne property market. With buyer demand remaining strong and limited supply, well-maintained or renovated homes present a chance to secure a prized property that is likely to appreciate in value over time. For first-home buyers, apartments and townhouses offer an excellent entry point into the market, providing an opportunity to build equity and lay the foundation for future property investments.
As a property consultant, my advice is to take a long-term view of the market and assess your own financial situation and readiness. Rather than attempting to time the market perfectly, embrace the opportunities available now. If the time is right for you and you are in the position to–don't hesitate to make your move into the resurgent Melbourne property market.
In conclusion, Melbourne's property market is once again on the rise and as we see a ‘new market’ emerge, it creates a favourable environment for both buyers and sellers. As the city continues to attract a growing population and offers a unique lifestyle, real estate in Melbourne presents a wealth of opportunity.
Take advantage of the current market conditions, seek professional advice, and make informed decisions to secure your position in our thriving city.