Melbourne Property Market Update


The clearance rate has remained steady at 76% but on a lower amount of auctions reported to the REIV.  596 properties went to auction over the weekend with 331 selling at auction, 120 selling before auction and 145 passing in.  In addition, there were 297 private sales. In comparison, there were 743 auctions reported to the REIV for the same weekend last year, resulting in a clearance rate of 77%.

The Federal Government is overhauling the migration system as it moves to reduce pressures caused by population growth, one of them being the housing shortage crisis.   In 2022-23, the net overseas migration intake was at a record level of 528,000.  This of course was a Covid-19 catch up however it has contributed to rising inflation and housing unaffordability.

We have an ongoing housing shortage in Australia with is contributing to higher rents and high property prices.  It is now harder than ever for a first home buyer to purchase a property with cost of living pressures making it impossible for many to save for a deposit.  Population growth is even making this harder as demand outstrips supply.

It is predicted that overseas migration will decline to 395,000 in 2023-24 and again further reducing to 260,000 in 2024-2025.  Whilst this will not solve the housing issues in this country, it will hopefully assist in allowing some kind of catch up in building more houses which should in turn lower the pressure on rent prices and property prices.

But even then, whilst we have strong population growth (which these lower numbers still are), then it is very unlikely we are going to be in a situation where supply outstrips demand and therefore property prices and rents should continue to remain high.

Lisa O’Connor (one of our Senior Buyer’s Agents) had success at a competitive auction on the weekend securing a large, renovated, two bedroom, two bathroom, one car park for her brother and sister clients.  The property was quoted for $800,000 to $850,000 prior to auction and had competition from five bidders at auction, all of whom appeared to be first home buyers.  Good quality properties, no matter what the asset type (being apartments, villa units, townhouses or houses), if they are ticking all the boxes in terms of a great location, ideal orientation, renovated and large in size… they will likely to be in high demand and therefore will result in competition from multiple buyers.

Have a great week

Kim Easterbrook