Melbourne house hunters are getting more opportunities to make deals as the property market comes off its extraordinary peak.
Buyers are beginning to exchange FOMO (fear of missing out) for FOOP (fear of overpaying) as interest rate rises bite and conditions change.
Affluent suburbs such as Kew and Hawthorn, as well as pockets in the city’s west and the outer fringes have been identified as hot areas for deal hunters this year.
– Scroll down to see the full list of fastest and slowest selling suburbs + suburbs for biggest discounts
Box Hill South tops the list of Melbourne suburbs with the highest rates of vendor discounting, the typical seller accepting a price 4 per cent below their initial asking price, figures from PropTrack show.
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Bargain-hunting buyers can also look at suburbs where homes linger longer on the market.
The average of 79 days it takes a home to sell in Brooklyn, in Melbourne’s west, is the longest in the metropolitan area.
PropTrack’s economic research executive manager, Cameron Kusher, said both approaches could give buyers better odds, but the real deals were more likely to be had later in the year after more interest rate rises.
Mr Kusher said the median vendor discount, reflecting the difference between an initial listing price and what a property sells for (not including auctions), was historically closer to 5-6 per cent in many suburbs – meaning most Melbourne sellers have been selling for or above their asking price.
“These levels of discounting are still very low … but we would expect to see more discounting take place,” Mr Kusher said.
“And it won’t necessarily be Box Hill South in 12 months’ time. It could be areas on the outskirts of the CBD that were popular in the pandemic, but where the push to these areas won’t be as strong.
“And any weakness in the market will be most prevalent initially at the top of the market.”
He added that suburbs such as Kew, Hawthorn and Brighton East, already among the most discounted in the city, might be the suburbs to watch for “more scope to negotiate on price”.
“Sellers will need to show some flexibility, that’s what happens when you come off a boom in prices and you have interest rate rises,” Mr Kusher said.
However, areas with shorter times on the market were likely to have buyers continuing to “pay top dollar and competing with a lot of people”.
A Game Property Advisory buyer’s advocate Jim Malamatinas said while family homes in desirable suburbs and units with gardens or courtyards were still performing strongly, those on main roads or next to big blocks of units were the ones “sitting on the market longer and where discounting is happening”.
Mr Malamatinas said buyers weren’t feeling the sense of urgency they were in the pandemic’s first two years.
“Last year, buyers were in a state of FOMO and now they’re in FOOP, fear of overpaying,” he said.
“If you’re clear on your objective and strategic in your approach, there is a chance to buy well in this market, for investors in particular.”
Barry Plant executive director Mike McCarthy said most properties were now advertised for 30-plus days, compared with the “high 20s” of last year.
He said that in the outer east, where homes were still selling in as little as 10 days, the upper end of the market was “still doing really well”.
Real Estate Buyers Agent Association of Australia president Cate Bakos said Ardeer and Laverton, where properties were advertised for a median of 61 and 60 days respectively, were “potential gentrification suburbs” despite low competition among buyers.
PropTrack’s Home Price Index shows Melbourne property prices fell in May, for the first time since April 2020.
Marty Burke and fiance Carissa McManara moved to Belgrave South in the Dandenong Ranges from Bellfield in Melbourne’s north east in 2019.
A few days after arriving Mr Burke was already training with the local cricket club, and the friendly community has kept them busy ever since.
With their daughters Hazel, 6, and Rhiannon, 11.5 months, also loving life in the ranges, they’re not surprised homes sell fast.
“We wanted to move somewhere quieter and a bit more peaceful, and it’s an amazing place up here,” Mr Burke said.
“And the home has given us a lot of space. You can hear kookaburras and sometimes see the odd wallaby bouncing around.
“And there’s still plenty of room for guests and family to come and stay with us. You can have three generations under one roof.”
Despite their love of the location they’ve listed their four-bedroom house at 168 Belgrave Hallam Rd, Belgrave South, for $845,000-$928,000 as they prepare to move interstate for family reasons.
Ranges First National agent Grant Skipsey said in recent months many of the buyers coming to the area had been from urban suburbs like Preston and Brunswick.
“They’re coming from what used to be working class suburbs and they are wanting a bit more space for their family,” Mr Skipsey said.
“It’s about quality of life and enjoyment in these areas, and now people don’t have the commuting problem as they can work from home.”
FASTEST SELLING SUBURBS
Coldstream – 10 days
Sassafras – 10 days
Millgrove – 10 days
Seville East – 11 days
Sevilla – 11.5 days
Belgrave South – 12 days
Tecoma – 12 days
Wandin North – 12 days
Upwey – 12 days
East Warburton – 12.5 days
PropTrack figures for where houses spend the lowest median days on market
SLOWEST SELLING SUBURBS
Brooklyn – 79 days
Lancefield – 67 days
Aberfeldie – 64 days
Ardeer – 61 days
Balwyn – 60 days
Laverton – 60 days
Maribyrnong – 60 days
Essendon North – 59 days
Altona North – 56 days
Niddrie – 56 days
Sunshine – 56 Days
PropTrack figures for where houses spend the longest median days on market
SUBURBS FOR BIGGEST DISCOUNTS
Box Hill South – -4%
Templestowe Lower – -3%
Hawthorn – -3%
Richmond – -2%
South Yarra – -2%
Kew – -2%
North Melbourne – -2%
Brighton East – -2%
Doncaster East – -1%
Glen Waverley – -1%
PropTrack suburbs where private treaty house sellers discount their initial asking price the most
– additional reporting by Nathan Mawby
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