Market Snapshot
August
2024
The Director’s Cut
by Sam Paynter Director & Auctioneer Woodards Elsternwick
Melbourne’s Steady Rates Inspire Market Confidence
In a stable interest rate environment, buyers and sellers are displaying renewed optimism. Historically, interest rates are not as high as many might think, especially compared to the 18% days. This steadiness allows all market segments to plan their next purchases more confidently, fostering increased buyer engagement and seller confidence.
Looking ahead, Melbourne’s market outlook remains positive. Recent updates by CoreLogic reported a 73% auction clearance rate, a promising sign for the upcoming spring market. Meanwhile, the remaining winter months provide an excellent opportunity for sellers to prepare their homes for future sales.
Despite lower stock levels, buyer interest remains spirited, as evidenced by our recent sales successes. A prime example is the swift sale of a beautifully maintained two-bedroom Art Deco apartment at 2/35 Normanby Street, Brighton, which secured $963,000 via a private sale in merely five days. This rapid transaction highlights the strong interest from buyers, amplified by strategic marketing efforts.
Our focus areas, including the prestigious Glen Eira, Bayside, and Port Phillip, continue to attract attention for their desirability and potential for long-term appreciation. With populations and rental needs rising, these locales are increasingly sought after for living and investing. Notably, the apartment market across the Bayside suburbs is showing signs of growth, driven by escalating rental yields and a surge in demand.
“In a stable interest rate environment, buyers and sellers are displaying renewed optimism.”
Metro Melbourne Property Outlook
Winter generally has a reputation as being a little less action-packed when it comes to buying and selling homes in Melbourne. There are, however, definite signs that the Melbourne property market is ready to take off over the next few months as we head into spring, with the winter months predicted to gain quite a bit of momentum.
New tax cuts could bolster the market
A new set of income tax cuts for many Australians (starting July 2024) could result in a boom in housing prices in 2025 in Melbourne. Specifically, according the PropTrack, one of Australia’s real estate insight leaders, Melbourne house prices could skyrocket up to $55,000 next year (up 6% on today’s number).
“With the tax cuts being introduced July 2024, we will see buyers borrowing capacity increase and then provided that we have interest rate cuts as well at some point, Melbourne will start looking more affordable and attractive,” said PropTrack’s Economic Researcher Cameron Kusher. “Although Victoria is still seeing a slightly
greater loss of people to other states than it is gaining, housing affordability will drive people to want to come to Victoria.”
Suburbs where you can get bargain
A slight downturn in the market is always an opportunity for smart buyers. The Age recently published an article in March 2024 highlighting suburbs which have seen property prices dip the most over the last five years. While this isn’t the best of news for buyers who have invested capital in these suburbs years ago, it does provide a number of amazing opportunities for those wanting to grab a bargain in these areas.
“For first home buyers, obviously, there is the pressure on saving that forever increasing deposit. Time has stood still for them in these locations, and I’d argue that they’re great locations for first time buyers who want to be integrated with the city,” said buyer’s agent Cate Bakos to The Age.
Suburbs on the list that have experienced significant drops for units/apartments include Carlton (33.3% down in the last five years), Coburg (18%), Malvern East (13.8%), Melbourne’s CBD (12.9%) North Melbourne (12.5%), and Oakleigh (11.2%). On the house front, Brunswick West (9%) and Clayton (3.2%) were the notable suburbs to have experienced median price dips. All these suburbs currently offer an enticing opportunity to buy into them now while they’re undervalued, and history tells us they won’t be undervalued for very long.
Are interest rate cuts on the horizon?
The last two years would have felt like an eternity for Melbourne property owners, who have not only been waiting for the RBA to stop with rate hikes, but actually start to cut them. But one renowned real estate forecaster is predicting when the rate cuts eventually happen, they will come with a flurry.
Sameer Chopra, CBRE’s Head of Pacific Research, spoke at a recent Real Estate Institute of Victoria (REIV) conference, stating he believed the RBA would cut rates anywhere from eight to ten times over the next two years. “Interest rates will end up going back to where they were not during 2020 and 2021; it needs to go back to where it was in 2019,” said Mr Chopra.
Mr Chopra predicted the first rates cut to occur right at the end of 2024, with further cuts occurring throughout 2025 and 2026.
Rent or Buy?
With the rental market still red hot with demand outweighing supply, coupled with a number of suburbs on the edge of the CBD which has seen a drop in property prices over the last few years (namely units and apartments), the numbers do stack up in the favour of buying over renting.
If you look at the suburb of Carlton for instance, it has a median rental price of $550 per week, while the median price of a unit/apartment in the suburb is currently sitting at $392,500 (as of July 2024). This would see any possible buyer paying less in a mortgage per week buying in Carlton over paying weekly rent in the same suburb, even despite the currently high interest rates. Other suburbs which look more enticing to purchase than lease at the moment include Travancore, Flemington, Brunswick West, West Footscray, and Clayton South.
City of Bayside
Bayside Median Houses
$2,057,500
SPOTLIGHT SALE
This charming first floor residence sold for $963,000. 2/35 Normanby Street Brighton
MEDIAN SALE PRICE JUNE QUARTER 2024
City of Glen Eira
Glen Eira Median Houses
$1,700,000
Suburb
SPOTLIGHT SALE
309/242 Glen Huntly Road Elsternwick
This luxury penthouse lifestyle with designer features, panoramic views and vibrant city living sold for $612,000.
MEDIAN SALE PRICE JUNE QUARTER 2024
City of Port Phillip
$1,800,000
9/321 Orrong Road St Kilda East
Melbourne’s Love for the main street
Melbourne’s main streets have long been the lifeblood of their neighbourhoods, each weaving a delightful mix of rich history and modern vibrancy within the urban fabric. From humble beginnings as mere marketplaces or tramway passages, these streets have evolved into bustling hubs for community life and commerce.
Whether it’s window-shopping at boutique stores, people-watching from a cafe, or enjoying a sundowner from a rooftop bar, Melburnians often find their happiest moments along these bustling locales.
Evolving Landscapes
Over decades, the business makeup of Melbourne’s main streets has seen a fascinating evolution. Lined initially with essentials like butchers, bakeries, and tobacconists, today, these trades now stand side by side with trendy cafes, boutique shops, and art galleries, most often set within heritage-listed buildings. This shift has not only altered the streets’ physical appearance but also their role in the community, turning them into destinations suited for contemporary lifestyles.
Real Estate Appeal
Living in close proximity to a main street in Melbourne is more than just a matter of convenience; it can significantly enhance a property’s appeal. The dynamic nature of these areas, with their better accessibility, improved infrastructure, and a plethora of amenities, elevates a home’s demand and value. It’s no wonder these factors are prominently featured in real estate marketing materials, highlighting the tangible benefits they offer savvy buyers and astute investors.
Notable Mentions
Among the city’s cherished main streets, Chapel Street in South Yarra and High Street in Armadale stand out. Moreover, Melbourne’s High Street, stretching through suburbs like Preston, Northcote, and Thornbury, was crowned the ‘coolest street in the world’ by Time Out, beating out trendy strips in Tokyo, Barcelona, and New York City. Smith Street, separating Fitzroy from Collingwood, also took the title in 2021, while Gertrude Street, weaving through Fitzroy, came in second in 2022.
The Eternal Warmth of Fireplaces
Fireplaces have long been cherished as the heart of the home, providing both warmth and a cosy gathering spot. Historically essential in every period home, they featured prominently from kitchens to bedrooms.
Today, while modern heating solutions have largely replaced their functional role, fireplaces remain a treasured architectural feature, enhancing the beauty and ambience of living spaces and symbolising comfort and nostalgia.
From Survival to Style
As essential as water and shelter, fireplaces were once fundamental for survival, providing warmth and a means to cook food. Historically, fireplaces featured prominently in various period-style homes across Australia, including Victorian terraces, Federation cottages, and Queenslanders. Although modern heating technologies have largely taken over their primary role, modern homeowners continue to value these historic features for their ability to add a sense of warmth and character..
Innovations in Design and Function
The design and functionality of fireplaces have undergone remarkable innovations over the years. The invention of the chimney marked a revolutionary improvement, directing smoke outdoors and enhancing indoor air quality. Modern advancements, such as gas and electric fireplaces, offer a more efficient way to maintain warmth without the labourintensive process of managing a wood fire. These creations have rendered fireplaces more versatile, efficient, and adaptable within contemporary homes.
Centrepiece of Lifestyle and Luxury
Today’s fireplaces have transcended their traditional roles to become luxurious centrepieces, meticulously crafted to enhance the aesthetic appeal and ambience of a space. Contemporary designs range from minimalist to ornate, serving as striking focal points in both traditional and modern settings. This ability to merge with various interior styles makes them pivotal in creating inviting environments, continuing to draw people together around the timeless allure of an open flame.
The Best Homeware Brands in Australia
In the pursuit of transforming houses into homes, Australians have access to a splendid array of homeware brands that offer unique aesthetics and quality craftsmanship. Whether looking to add a touch of elegance, a splash of colour, or a statement piece, these brands cater to every design vision.
Sarah Ellison
After a notable career in styling, Sarah Ellison launched her own brand in 2017. The FLOAT and Muse sofas and the Yoko bed base exemplify her approach to modern, understated luxury that fits seamlessly into contemporary Australian homes.
Fenton & Fenton
Fenton & Fenton is like stepping into a high-end decor magazine. From their vibrant outdoor furniture to a collection of inspired artworks, this mecca proves that daring combinations of colour and texture aren’t just acceptable—they’re encouraged.
Kip&Co
For over a decade, Kip&Co has infused homes with vibrant and eclectic designs. Known for their extensive range of bedding, from colourful organic cotton prints to elegant French flax linens and plush cotton velvet, they add a burst of brightness to the bedroom.
Maison Balzac
Embodying French-inspired refinement, Maison Balzac presents an ever-evolving collection of hand-blown glassware and fragrant scented candles. Their iconic items, such as the carafe set, candle holders, and scented candles, are designed to elevate everyday home rituals.
Bonnie & Neil
Bonnie & Neil is a go-to for essential finishing touches, transforming spaces with artistic and vivid textile creations. Their boldly patterned cushions, wool rugs, and welcoming doormats are particularly popular amongst discerning decorators.
Dinosaur Designs
Dinosaur Designs stands out with its handcrafted resin pieces, epitomising the wabi-sabi aesthetic. Loved for their chic serveware, including plates, salad servers, and cheese knives, each design fosters a warm, inviting setting perfect for gatherings.
Woodards Braves
The Cold At The CEO Sleepout
On 20 June, 45 directors, staff and business partners slept outdoors at the Timberyard in Port Melbourne for the 2024 Vinnies CEO Sleepout.
The team experienced sleeping ‘rough’ during Winter for just one night. This one night will help change the lives of 120,000 Australians that experience no shelter, no warmth, no food, no friends, or family every night.
Through the support and generosity of the community, Team Woodards raised over $146k (making us Number 1 in Victoria).
This is a tremendous effort and funds will go directly to assist people experiencing homelessness by supplying food vans and emergency support, as well as expanding the reach to existing Vinnies programs ensuring every Australian can access accommodation, meals and emergency assistance.
Since 2017, the Woodards Foundation has raised over $1.7 million, funding eight new soup vans that distribute food and other essentials to those in need and directly providing 912k meals to the homeless.
A percentage of every Woodards sales commission and every leasing fee is donated to our Foundation. The Woodards Foundation values its partnership with Vinnies and together, with the generosity of all those within our communities, we are making a difference and ‘changing lives’ for the better.
High rental yields might be here to stay for a while yet
Property Investment Update
Whether you’re a seasoned investor looking to add to your growing portfolio, or a first timer wanting to dip your toes in the waters, the Melbourne property market always presents an enticing option when it comes to investing your money.
Like so many capital cities across the country, the rental market in Melbourne continues to be scorching hot. Rental prices through all suburbs continue to soar, namely in the inner city. These record high rental prices, coupled with low vacancy rates and dip in median property pricing, is a recipe for success for those searching for an investment with enticing rental yields.
It’s pretty easy to calculate your gross rental yield on your investment property. What you do is divide the gross annual income by the purchase price of the property and multiply it by 100. For instance, if you purchased the property for $500,000 and rented it out for $550 a week ($28,600), your gross rental yield would be a very healthy 5.2% ($28,600/$550,000 x 100).
Looking at Melbourne’s CBD for instance, it currently has a median rental yield of $630 per week, with a median unit/apartment price of only $560,000. This equates to a very handsome rental yield of 5.85%. Nearby Carlton has an even more impressive yield of 7.3%, while Travancore offers a 7% yield. Other suburbs to look at with impressive rental yields include Southbank, Box Hill, Notting Hill, and Abbotsford.
Time to invest in Melbourne’s inner city
Suburbs surrounding the CBD have taken the brunt of median price drops over the last few years, which makes these areas prime for seasoned and new investors to snap up some bargains.
As mentioned in the Metropolitan Market Outlook, the suburb of Carlton is incredibly undervalued as of July 2024,
with a median unit price of $392,000. Sitting right on the cusp of the city, Carlton is one of the premier suburbs in Victoria, and has easy access to renowned universities, iconic Lygon Street, beautiful parklands, and a range of public transport options. What also makes Carlton an enticing investment option is the fact that median rental price is currently $550 per week.
“If you’re going to play in a market, you play in a market that’s hit the bottom where there’s opportunity for growth, so that’s now, while Melbourne dwelling prices have stagnated,” Southbank-based property research company RPM National Managing Director Luke Kelly said in an article in the Australian Property Investor magazine. “We believe there’s the opportunity to buy now; go in and get yourself a good deal because that shift is going to come where demand will outpace the supply over the next 12 to 24 months,” Mr Kelly said.
Other undervalued inner-city areas which need to be looked at from an investment standpoint (all down on median unit pricing over the last five years) include West Footscray, North Melbourne, Brunswick West, Windsor, and St Kilda.
Hotspotting’s top growth suburbs revealed
Hotspotting, one of Australia’s top independent real estate analysts, revealed a list of suburbs across Australia that are primed for home price growth over the next 12 months.
Hotspotting’s winter Price Predictor Index (PPI) is based on trends in data, and is a forward-looking tool to identify
Suburbs with
Caulfield North
St Kilda
St Kilda East
St Kilda West
locations in growth or decline, with the aim of helping buyers to decide where they should invest next. It’s based on a simple premise – the number of sales comes first, and then prices react.
A number of Victorian suburbs were listed by Hotspotting, with many of these areas more rural including Ballarat East, Bacchus Marsh, Darley, and Torquay. But there was a select few Melbourne suburbs on the list, including Deer Park which has seen five consecutive quarters of growth while still remaining affordable to many buyers. Other suburbs on the list included Sandringham, Blackrock, and Sydenham.
Finding more affordable rental just got easier
Life just got a little easier for prospective renters searching for an affordable rental online, with realestate.com. au introducing its new ‘affordability’ filter. The new filter enables consumers to search for properties that fall under specific rental affordability schemes, such as the National Rental Affordability Scheme (NRAS). This won’t only make life easier for prospective renters, but rental providers as well wanting to get their property rented out faster.
“For those who are eligible for specific rental affordability schemes, our new affordable housing search filter is designed to ease some of the stress of finding a new home,” said REA Group General Manager of Product Jarrod Scott to Elite Agent.
North
Melbourne’s Warehouse Conversion Craze
In Melbourne, the charm of warehouse conversions has not only been preserved but celebrated, making them a cherished option among homebuyers. These once bustling industrial sites now serve as bespoke residences, creating spaces that are as characterful as the city itself.
Rich in History
The history of warehouse conversions in Melbourne can be traced back to the city’s booming industrial age, primarily in neighbourhoods like Richmond and Fitzroy. Artists and architects initiated the conversion of these expansive buildings into lively homes, establishing a trend that would define Melbourne’s inner-city residential landscape.
Beloved Industrial Features
The appeal of warehouse conversions lies in their distinctive architectural elements. Exposed brickwork introduces a raw, textural beauty, while expansive windows usher in floods of natural light, and lofty ceilings amplify the sense of space. These features create a setting that appeals to those who value style and open, adaptable living spaces.
Welcoming of Modern Lifestyles
Catering to the modern lifestyle, warehouse conversions offer flexible, open-plan living areas that adapt to various needs— from entertainment hubs to home offices and creative studios. Their generous proportions meet the dynamic needs of today’s homeowners, accommodating contemporary conveniences while preserving the building’s original character.
Key Areas in Melbourne
Melbourne’s northern and eastern suburbs, such as Collingwood and Abbotsford, are renowned for their warehouse conversions. Woodards has effectively marketed several such properties, highlighting their perfect fusion of historical allure and modern sophistication, demonstrating the enduring appeal and potential of these unique dwellings.
Savvy Investments
Warehouse conversions are savvy investments due to their high demand. Amidst a sea of conventional homes, these properties attract those who seek something beyond the ordinary. Moreover, their locations in up-and-coming urban areas like Brunswick and Preston benefit from increasing property values as these neighbourhoods continue to evolve and gentrify.
