The auction calendar is heating up with a couple of Super Saturdays looming – October 25th is the big one, before the Melbourne Cup Carnival gets in the way for a few weeks.
While it’s great to have a lot more choice available, from what we’re seeing there’s not a huge amount of competition between buyers across the majority of market segments.
Properties within the reach of first home buyers are definitely busiest, especially when the property has a point of interest (a good-sized outdoor area or a trendy renovation being first and second on this list). A lot of the better ones are being bought very quickly, and we’re seeing HUGE numbers even at mid-week opens.
So what’s happening out there?
Foot traffic is still a bit haphazard in the higher price brackets, and sometimes there’s no real rhyme or reason as to how the market will respond when a property is launched for sale online.
Most agents we spoke to over the past couple of days have reported two speeds on Saturdays – some opens are very busy (twenties, thirties, even forties in some cases. And others? Ones, twos, threes. One we’re tracking in Camberwell went from 36 groups through on the first Saturday to only four on the second Saturday.
Phrases like “a bit of a mirage” and “it’s a green drought” are popping up here and there. This isn’t completely across the board, but it’s definitely prevalent.
A lot of auctions are passing in, and from what we’re seeing the usual scramble to sell within 48 hours of the failed auction isn’t enough time to get it done.
Buyers in $2m-$4m brackets seem to be very aware that they’re often the only ones interested at the auction. They tend to lose interest pretty quickly if the vendor isn’t prepared to accept their last-and-best offer. Buyers are very dependent on Social Proof, and the lack of competition at auctions seems to be holding everything back.
Dare we say it, some vendors who don’t take the first offer that comes their way might be in for an extended wait.
And, underquoting is still a problem. And seemingly only getting worse. This isn’t really up for debate, and the biggest problem is one of ‘infection’. Once one agent or one agency in a certain area starts routinely under-quoting, then it can really start to take hold across the board.
As a basic (hypothetical) example –
Agent X has a villa unit listed for auction at $450k to $490k (10% range, all good). Trouble is, it’s worth $550k to $590k any day of the week, and it’s quoted low to get maximum interest.
And so they’ll get lots of foot traffic, and end up with disappointed buyers come auction day who really had no chance to buy the property but were misled by its low quote.
In most cases, bidding from the lower-priced buyers is really helpful in getting the bigger-budget buyers to bid higher too. There’s that Social Proof again.
The knock-on, though, is that other agents need to be aware of this if their own properties are going to attract attention. The above villa unit looks cheap (until auction day!), and so other units look overpriced in comparison. And being overpriced can be fatal in trying to get buyers to inspect and then to bid.
For buyers? Do your homework. Keep a spreadsheet of properties you’ve inspected, with their quoted prices, and their eventual sale prices. The sooner you start doing this the better, and it’ll definitely help
We said it last month, we said it last year, and we’ll keep saying it. Finding a great home requires hard work, patience and a willingness to educate yourself.
What we would add to the above article, in terms of ‘compromised’ properties, is that we don’t just mean ‘this PROPERTY is compromised because X, Y X’.
We also mean – YOU might have to compromise on what you want, to get what you want. A suburb further out, or less period character, or not having a double garage are all examples of what this means.
The recent changes for first home buyers have definitely sparked increased activity and increased competition.
The changes as of 1 October are summarised as – a higher property price cap in metro Melbourne (was $800k, now $950k); no income caps; and removal of the limit on number of applicants to the scheme. Anyone with a 5% deposit can apply.
What does it mean?
So far, we’ve seen a lot more competition in the $750k to $950k bracket in Melbourne.
Beyond that, it might mean that Spring 2025 becomes a better time to buy for first home buyers than it might otherwise have been.
This competition will definitely stay strong until the super-urgent buyers have all bought, and the market returns to a more level playing field.
If you’re looking to move this year, even if you don’t engage an advocate to help you, it’s definitely time to be getting into gear.
Contact your finance broker and start the process, if you haven’t already. If you haven’t got a broker, please email us for a recommendation.
There’s still time to get ready to sell this spring, but … 100% it’s time to set that ball rolling. This is a repeat of our commentary last month and with an extra layer of urgency added.
There will be more property on the market in December – homes that need to be sold because people have bought in September and October, and homes that are being put to market because vendors have seen good signs of life in Spring.
There are definitely qualified, pre-approved buyers out and about right now, and one by one they’ll disappear as they find new homes across the next few months.
Getting your property ready shouldn’t be delayed. The downside? Your house looks nicer and it’s ready to sell as soon as you find something to buy (hint: not really a downside).
Please contact us via [email protected] and let us help you work through first, second and subsequent steps in getting things moving.
Our involvement ranges from an initial assessment of value and marketability through to taking over the sale process end to end, and anywhere in between where the vendor could use assistance.
A recent client testimonial is below –
“Thank you for your stalwart presence throughout the Mary Street campaign. From introducing Simon and Gavin, to your clear analysis of the changing situation, to your support on Saturday, I always felt that I had the insights I needed to make big decisions. Navigating that stormy passage would have been much harder without your expertise.”
(Judy, our vendor in Hawthorn who we helped sell her long-term family home.)
That’s it for October. The market still isn’t fully transitioned the way we thought it would be. The tide is definitely turning – just not the same way in all areas.
The best time to buy a home was 10 years ago. The second-best time is when you’re ready. If you’re ready now – or getting close – get in touch by emailing [email protected].
