Melbourne ends the year 2023 as a buyer's market. Plus, the link to 2024 predictions
The journey into the Christmas season has been fascinating for the Melbourne property market. While October hinted at a potential recovery, the Melbourne Cup Day interest rate hike swiftly grounded expectations, discouraging both buyers and sellers. Melbourne experienced a slight contraction in growth for the month of November, with a 0.1% decline compared to quarterly growth of 0.6%.
During the first two weeks of December, we witnessed a flurry of off-market and private sale transactions driven by vendors eager to align with market demands and sell their property before the impending Christmas slowdown.
Since July, stock levels have steadily climbed, and buyer demand isn't keeping pace with the growing vendor activity. In November, advertised stock levels in Melbourne surpassed the five-year average, signalling a buyer-friendly market where increased choices, reduced urgency, and enhanced negotiation opportunities prevail. This trend extends across all price points and increases the need for strategic negotiation skills on both the buyer and seller side of transactions to ensure an optimal result.
The Rental Market.
The rental market continues to face significant constraints, maintaining record low vacancy rates of 0.8%. The persistently low rates of building approvals suggest that this situation is unlikely to shift in the short to medium term.
November marked the first time rents have risen faster than home values in six months. This shift has provided some support for gross rental yields. The Melbourne average yield is now 3.4%. We have seen investors return to the market in recent weeks, capitalising on the growing rents and yields.
Curious about what the Melbourne property market holds for 2024? Read our December Market Insight for comprehensive answers to all your pressing questions: 3.4% at the end of October.
My parting piece of advice.
Now more than ever, choosing a quality home and utilising a strategic approach to buying and selling will be imperative to success in this market. With rapidly changing conditions, values can be distorted for the vendor and the buyer if they are not fully informed.
If you’d like to learn more, contact Lauren Staley today for a complimentary 15-minute discovery call, and we can advise you on the best timing and approach to ensure your purchase is a successful one in the long and short term.
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