Buyer confidence is slowly improving in Melbourne, but the market hasn’t fully shifted gears just yet. While February saw a lift in activity following the Reserve Bank of Australia’s rate cut, March is shaping up as more of a steady progression than a surge.
If you’re looking to buy, renovate or sell in 2025, here’s what the current market conditions are telling us – and what to prepare for over the coming months.
Sentiment is improving, but not yet fuelling competition
The mood among buyers is more optimistic than it was six months ago. First home buyers in particular are more engaged, asking sharper questions and seriously considering specific properties, rather than simply seeking general advice about auctions or the buying process.
But increased confidence hasn’t yet translated into a rush of competition. Many sale campaigns are attracting just one serious buyer rather than multiple bidders. This suggests that while the market is shifting, it hasn’t yet tipped into strong momentum territory.
As one agent put it, Melbourne is “transitioning from a strong buyer’s market to a reasonably strong buyer’s market.” That may change as borrowing conditions improve and more buyers act on their pre-approvals.
Renovated homes remain in demand
Well-presented homes are still outperforming the market, particularly renovated period properties or newer homes with strong lifestyle appeal. Proximity to schools, public transport or village precincts remains a key driver.
These homes continue to attract steady interest, even in an environment where many buyers are still cautious.
New home sites are making a comeback
One of the more notable shifts in March is the rise in demand for build-ready sites. Older homes on good blocks are drawing increased interest from buyers looking to demolish and rebuild, whether through a volume builder or custom design.
Construction costs have eased slightly, and finance brokers are reporting stronger enquiry from buyers who are planning ahead. Many are factoring in the likelihood of lower interest rates later in 2025 and are starting the build process now to get ahead of the curve.
Capacity to borrow is improving (slowly)
While the February rate cut hasn’t made a significant difference to borrowing limits yet, it has improved buyer sentiment. Many prospective buyers have updated their pre-approvals and are watching the market closely for the right opportunity.
However, waiting too long could mean missing the window. Once conditions shift more decisively, competition may intensify quickly.
Planning to buy? Now is the time to act
With Easter falling late this year and a Federal election expected soon after, the April–May period is likely to be quiet. If previous years are any guide, new listings will slow down from April until spring. That makes March one of the last active periods for some time. If you’re thinking about buying, upgrading or building, now is the time to prepare.
Your next steps:
- Get pre-approved – It’s too late to apply for finance when the market is already running. Make sure your pre-approval is current and reflects your actual capacity.
- Finalise your tax return – Lenders need your most recent income information, so now’s the time to lodge your 2024 tax return if you haven’t already.
- Get expert advice – Speak to a mortgage broker, accountant or financial planner. If you need a referral, feel free to reach out.
SMSF, Trust or CGT valuation coming up?
With end of financial year around the corner, March is also a good time to start preparing for ATO or SRO valuation requirements. If you or your clients need compliant market valuations across residential assets, our team can assist. Reach out for a quote.
Final tip: do the legwork
Whether you’re new to the market or returning after a break, there’s no substitute for getting out to opens and auctions. Market knowledge helps you spot value, avoid overpriced listings and act decisively when the right home comes up.
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, take the next step with AXTON’s Property Advocates Joe Stinear and Kate Vines. Whether you’re new to the market or already pre-approved, our expert team is ready to guide you. For tailored advice, insights, or representation, contact us today at [email protected] or call 03 9939 7576. Let us help you buy with clarity and confidence.
