Welcome To The Market You’re Actually In (Turns Out, Life Doesn’t Read Property Headlines)
If you’re in the market and watching the news. Stop it. The watching the news bit. There’s a lot of talk. It’s all pretty dire. “Houses are on fire and only worth $4:50 so you may as well abandon it and go live in your car…”
There’s one thing missing from a lot of the commentary about Melbourne’s “unpredictable” spring market:
People don’t usually buy property because they read a headline and thought, “NOW’S THE TIME!”
They buy because life happens.
They’ve had a baby.
They’ve separated.
The kids have left home.
They’ve got a new job.
They’ve inherited money.
They’ve finally found the right house.
They’ve sold something else.
Or they’ve simply decided they’re ready.
Sellers
They’re not sitting around waiting for Melbourne’s median to hit some magical number either. They’re selling because they need to move, want to move, have a new job, maybe retired or have simply found their next thing. And that matters because the current market is being talked about in very broad strokes.
Yes, Melbourne’s numbers are softer. This article points to a four-week average auction clearance rate of 53.2%, median vendor discounts of around 4%, and 152 suburbs recording price falls compared with 95 recording rises. Blah, blah, blah, numbers, reoccurring numbers…
Notably, in auction friendly Melbourne, volumes are well below a typical Melbourne spring. But scratch beneath the headline and the picture gets a whole lot more interesting.
Some properties are attracting multiple offers within days. Boutique apartments and units are seeing strong competition. Renovated homes are performing. And pockets including Brunswick, Kensington and Richmond are seeing strong inspection and bidding activity. So, no, this isn’t one giant Melbourne market. It’s a collection of micro-markets, property types and individual circumstances all behaving very differently.
This is where buyers and sellers need to stop trying to predict the market and start understanding the market they’re actually standing in.
For buyers, there are genuine opportunities. A quiet auction doesn’t automatically mean something is wrong with the property. A seller may be motivated. A private negotiation may give you leverage. Or you might simply find a really good property in a market where you’re not competing with 14 other people.
For sellers, it’s a different story. This is not a “stick it online and see what happens” market.
Presentation matters, more than every before. Ditto, pricing. The quality of the campaign matters. The level of skill of the agents,vital. This is the type of market that sorts the wheat from the chaff. And with the new requirement to disclose auction reserves seven days before auction, the sales strategy matters even more. And here’s the other bit we think gets lost in all the doom.
Context
Comparing today’s results with the COVID property era timeline is at best, misleading.
That was an absolute property circus. Comparing today’s results to that period doesn’t tell us much. Prices went bananas. Competition was extraordinary. People were paying premiums because everyone else was paying premiums.
So if Melbourne is now giving some of that extraordinary growth back, returning to something closer to pre-COVID levels isn’t exactly the property apocalypse. It’s a market normalising.
And for anyone who actually needs to buy or sell, the question isn’t whether next month’s median will be higher or lower.
You’re already in the market.
Your job is to understand the conditions, know the value, identify the leverage and make a smart decision based on your circumstances.
Because waiting for a headline to tell you “NOW’S THE TIME!” is a pretty unreliable property strategy.
Information is power. Strategy is everything. And remember, life doesn’t give a shit what the median is doing.
Tips For Buyers
Don’t try to time the market. If you’re buying because life requires you to buy, focus on the property and the opportunity in front of you, not what the headlines say might happen next.
Know your number before you fall in love. Work out your genuine walk-away price, then let the property and the competition determine where you land within it.
Don’t assume a quiet auction means a bad property. Lack of competition can be an opportunity, not a red flag.
Do your homework before you negotiate. Find out how long it’s been on the market, what interest it has had, has the vendor has already bought?
Don’t show your hand too early. There’s rarely a prize for telling the agent exactly how much you’re prepared to pay.
Forget the advertised price as a measure of value. It’s a marketing tool. Look at comparable sales, the property itself and what the market is actually prepared to pay.
Good properties can still be competitive in a softer market. Scarcity, quality and location don’t suddenly disappear because the overall market is quieter. Don’t get too cocky!
Look for the opportunities others are overlooking. A tired kitchen, ugly carpet or dated bathroom can be very different from a property with genuine structural problems.
But don’t buy yourself a second job. Know the difference between cosmetic work you can live with and a renovation that will eat your weekends, your budget and your sanity.
Check the boring stuff. Owners corporation fees, upcoming special levies, zoning, easements, building defects and planning issues can turn a “bargain” into anything but.
Don’t be frightened by competition. Three other buyers doesn’t automatically mean you’re overpaying. It means three other people have decided the property is worth competing for. And don’t automatically assume you’re going to be beaten.
And don’t manufacture competition where it doesn’t exist. If you’re the only person at the open, that’s information. Use it.
Have a strategy for auction day. Know your limit, know your bidding approach and know what happens if the property passes in.
Most importantly: buy the property, not the market. You’re going to live in it, rent it, renovate it or hold it for years. The Melbourne median won’t be sleeping in the second bedroom.
Younger Hill are Property Advocates located in Melbourne’s Inner North. Led by Fahey Younger, our team are fully licensed real estate agents and property specialists. We offer a collaborative and emotionally intelligent approach to transform old ways of buying property. With more than 20 years of combind buying and selling experiences, you’re in rock solid hands.
We service Melbourne Metro, Mornington and Bellarine Peninsulas, Rural Victoria (Gippsland, Daylesford, Hepburn Shire, Ballarat & surrounds), selected Sydney northern beaches, and more because property smarts don’t stop at the border.
