Melbourne suburbs where homeowners are selling now,
This spring, Melbourne’s housing market offers buyers more options and sellers are facing increased competition, especially in certain areas.
The higher competition is particularly noticeable in investor-heavy and mortgage-belt regions across the city.
CoreLogic data reveals that the number of new listings in Melbourne was 3.4% higher than the five-year average in October.
Most of these new listings are concentrated in the inner, west, north-west, north-east, and outer south-east suburbs.
October listing volume changes in Melbourne
| Region | Change in new listings | Change in total listings | ||
|---|---|---|---|---|
| Year-on-year change | Change from five-year average | Year-on-year change | Change from five-year average | |
| Greater Melbourne | −4.3% | 3.4% | 4.8% | 13% |
| Inner | −2.7% | 8.1% | 11.2% | 17.4% |
| Inner East | −15.2% | −10.4% | −8.4% | −9.5% |
| Inner South | −10.9% | −7.6% | −5.5% | −2.3% |
| North East | −1.1% | 7.1% | 2.8% | 11.7% |
| North West | −5.3% | 5.5% | 5.8% | 16.7% |
| Outer East | −9% | −6.6% | −5.4% | −0.6% |
| South East | 3.3% | 8.3% | 6.3% | 11.8% |
| West | −2.2% | 13.6% | 8.3% | 26.2% |
| Mornington Peninsula | −6% | −6.1% | 12.6% | 21.6% |
Some homes have been sitting on the market for extended periods, resulting in 13% more homes for sale than usual.
CoreLogic’s head of Australian research, Eliza Owen, explained that a high volume of new and accumulated listings benefits buyers.
She noted that this increase in listings occurs at a time when buyer demand remains soft across the market.
As a result, buyers still in the market have more negotiating power, which may be contributing to the downturn.
Melbourne’s western statistical area, from Footscray to Bacchus Marsh, saw the largest increase in new listings, up by 13.6%.
Following closely was the south-east, stretching from Chadstone to past Pakenham, with an 8.3% rise in listings.
Inner Melbourne experienced a rise of 8.1% in new listings, further reflecting the overall trend across the region.
Owen explained that the high cost of holding a mortgage is impacting both mortgage-belt areas and the inner region.
This inner region stretches from Essendon to Elwood, where the financial strain is being felt across different property owners.
“In west Melbourne, homeowners are struggling to manage their mortgage payments,” Owen said. “In inner Melbourne, it’s investors.”
She added that investors are struggling with the high cost of holding onto an investment property, or not seeing expected growth.
Melbourne’s home values declined by another 0.2% in October and are now 1.9% lower than they were a year ago.
Angie Zigomanis, head of data and insights at Quantify Strategic Insights, mentioned the 2023 land tax change as a factor.
The land tax change significantly lowered the tax-free threshold for property values, which helped drive up the number of listings.
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“If you owned a single apartment, you wouldn’t have been subject to land tax, but now there’s no escaping it,” he said.
This change has added another cost burden for property owners, making it more expensive to hold onto investments.
New listings in Melbourne’s wealthier areas have decreased, according to Owen, as homeowners in these regions can afford to wait.
In these areas, property owners are more likely to hold out until market conditions improve rather than selling during a downturn.
The inner east saw the most significant drop in new listings, down 10.4% below the five-year average.
The inner south followed closely, with a 7.6% decrease, while the outer east saw a 6.6% drop in new listings.
“These areas might not feel as much urgency to sell,” Owen explained. “People could be holding back because it’s not a great time.”
Investor Grant Tothill, from South Melbourne, decided to sell his Port Melbourne unit, which had once been his home.
He listed the two-bedroom apartment on Nott Street after the last rental agreement ended, citing rising costs and landlord hassles.
“It just made it more … ‘why are we doing this?’” Tothill said. “It’s a pity because we would have happily kept renting it.”
Tothill had updated the unit while living there and moved out after finding a newer apartment closer to the city.
He said the time had come to sell his old home, unbothered by the current weak market conditions.
“It’s not a capital gains play for us,” Tothill explained. “It’s about finding a fair value. It’s a well-loved home.”
He added, “We didn’t buy it as an investment. It wasn’t just meant to be a rental property.”
Fraser Lack, an agent at Biggin and Scott, explained that landlords who have lived in their investment properties are now common vendors.
This trend has benefited buyers, as these sellers often have a stronger emotional attachment to their properties.
“The people who have withstood the storm are now selling, and they are more attached to their homes,” Lack said.
“The flipside is that we’re seeing a turnover of really great properties that might not have been available otherwise.”
Lack noted that the influx of investor listings over the past two years has expanded buyer options in the market.
However, he pointed out that home buyers are primarily focused on securing the best available properties.
“Sixty to 70 percent of the properties are fairly average, but the truly A-grade properties are very few,” he said.
Zigomanis, from Quantify Strategic Insights, described Melbourne’s property market as a two-speed market, where certain properties are seeing price dampening.
“Some properties are experiencing price drops, while there’s an influx of investors returning to the market,” he explained.
He noted that higher-quality properties are holding up better in terms of price, while lesser-quality stock is seeing a decline.
“From a demographic perspective, the group in their 30s and 40s is still growing,” Zigomanis added.
As a result, properties that are attractive to this demographic, such as family homes, townhouses, and quality apartments, are maintaining value.
