There are opportunities for savvy buyers in Melbourne’s subdued market.

The Melbourne property market remains sluggish, with no interest rate cut on Cup Day, high listing numbers, and subdued property values. However, this creates a window of opportunity, especially for premium home buyers and strategic investors.

Luxury home market in Melbourne: A window of opportunity.

Houses in some of Melbourne’s most desirable suburbs may currently be among the most undervalued in the country. One challenge in buying a luxury home in a subdued market is that vendors often have high price expectations, making negotiations challenging or even impossible. However, vendors have recently become more realistic, improving chances for successful negotiations. As the spring selling season winds down, sellers are more motivated to do deals, presenting a valuable window to secure a property below market value.

While listing numbers are high in Melbourne overall, they’re concentrated mainly in investor-heavy and mortgage-belt areas. In contrast, listings in the inner-east and inner-south suburbs are down 10.4% and 7.6%, respectively, compared to the five-year average. This can make finding luxury homes more challenging, so we’re now conducting much of our buying off-market.

The luxury segment of the market often leads to price increases when values begin to rise, and we expect this shift to occur with the next interest rate cut, which three of the four major banks forecast for February 2025.

Savvy investors: Why Melbourne’s investor market may be poised for a comeback

Investors have been leaving Melbourne in favour of interstate opportunities, mainly due to rising taxes and value declines in investor-focused properties. However, these challenges are beginning to become part of market expectations, and we are seeing investors return as prices decline. 

With the recent hot streaks in Sydney, Brisbane, and Perth potentially cooling, we believe investor interest in Melbourne will rebound. This is underpinned by Melbourne’s relative affordability and increasing population, and it will be strengthened further when interest rates drop. 

My parting piece of advice.

Savvy home buyers and investors who act while the market is subdued will be strategically positioned to benefit from the upswing ahead. With the market currently in a holding pattern before anticipated interest rate cuts, now is the ideal time to buy and set yourself up for future growth. Book a free 15-minute discovery call today to learn how we can help you find and secure your dream home or investment.

Lauren Staley

Managing Director

Infolio Property Advisors.

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