As we move through the final quarter of 2024, Melbourne’s property market reveals fascinating trends in both demand and supply. With record-high listings and evolving buyer behavior, the market is entering a phase of recalibration. Let’s dive into the details and understand what these trends mean for buyers, investors, and the overall market outlook.
1. Supply Trends: Record-High Listings
One of the most striking developments in Melbourne’s property market is the surge in property listings.
• Highest in 12 Years: In September and October 2024, Melbourne experienced a 16% year-on-year increase in new listings, marking the highest level since 2012.
• Reasons Behind the Supply Surge:
• Many landlords and property owners are exiting the market due to higher land taxes and rising interest rates, which have increased their financial burdens.
• A significant number of holiday homes are being sold, as owners face financial challenges.
• Impact on Buyers: This rise in listings has provided buyers with more options, reducing the urgency to purchase and increasing their negotiation power. For those looking to enter the market, this presents a rare opportunity to secure properties without intense competition.
2. Demand Trends: Steady and Sector-Specific
While supply is on the rise, demand remains robust in certain market segments.
• Build-to-Rent Sector Booming: The build-to-rent model is gaining traction, driven by two key factors:
• First-home buyers delaying purchases due to high interest rates, opting to rent longer instead.
• An increasing number of downsizers moving into rental properties for convenience.
• Developers are ramping up their investments in this sector to cater to growing rental demand.
• Price “Reset” Offers New Opportunities: Property prices in Melbourne are stabilizing, marking a slower but steadier phase of growth. This “reset” allows first-home buyers to find more accessible entry points into the market.
• Demand in Family-Friendly Suburbs: Areas with ready-to-move-in family homes are experiencing a supply shortage, keeping demand strong in these locations.
3. Balancing Act: Supply Meets Demand
The interplay between high supply and steady demand is shaping Melbourne’s real estate landscape:
• Buyer’s Market: The influx of new listings has created a more favorable environment for buyers, giving them leverage in negotiations.
• Steady Rental Demand: Despite the cooling sales market, the rental market remains resilient, fueled by Melbourne’s growing population and limited rental property supply in certain areas.
• Slower Price Growth: Melbourne’s property prices are projected to increase by 3-4% in 2024, reflecting a balanced market rather than a runaway boom. This aligns with rising migration levels and a lack of ready-to-move-in homes for families.
4. Market Outlook for 2024 and Beyond
Experts predict that Melbourne’s property market will continue to stabilize while maintaining steady growth:
• Migration Boost: Increasing migration to Melbourne will drive demand for both rental and purchase properties, particularly in family-friendly suburbs.
• Continued Build-to-Rent Expansion: With rental demand growing, the build-to-rent model will remain a focal point for developers and investors.
• Opportunities for Buyers: The current surge in supply creates a unique opportunity for buyers to secure properties at competitive prices, particularly as price growth remains moderate.
Conclusion
Melbourne’s property market is undergoing a transitional phase. The surge in listings has tilted the balance slightly in favor of buyers, while demand, especially in the rental sector, continues to underpin market activity. For first-home buyers and investors, this recalibration offers opportunities to secure properties in a less heated market environment. Meanwhile, long-term trends like migration and infrastructure development promise sustained demand in key areas.
Whether you’re a buyer, investor, or developer, understanding these dynamics is essential for making informed decisions in Melbourne’s evolving property market.
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Disclaimer
This article provides general information and does not constitute financial, legal, or investment advice. Figures and trends mentioned are based on current data and are subject to change. Please consult with qualified professionals or refer to authoritative sources, such as CoreLogic or the Australian Bureau of Statistics, for specific advice. Core Elite Real Estate is not responsible for decisions made based on this content.
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