Following a remarkable surge in 2021 when median property prices in Melbourne soared by over 17 percent, the property market in 2022 underwent a period of turbulence after home values experienced a decline of 9.6 percent from their peak in February 2022. However, dynamics have taken a notable turn in 2023 after July saw a robust month of growth as the property market in Melbourne booms.
The property market in Melbourne is also experiencing a renewed surge in success, thanks in part to the growing popularity of buyer’s agents who are playing a pivotal role in guiding and assisting homebuyers.
In an increasingly competitive market, buyer’s agents are providing homebuyers with the expertise and support needed to secure their dream homes and investment properties.
Demand in Melbourne’s Property Market
Melbourne’s property market has long been known for its vibrant and diverse real estate landscape. With a combination of urban living, picturesque suburbs, and thriving cultural scenes, the city has attracted a steady stream of homebuyers and investors.
However, in recent years, the market has witnessed heightened demand, resulting in increased competition and a need for innovative approaches to property purchasing.
The shift in momentum has been instigated by a prolonged scarcity of property listings, which have maintained their low levels since the subdued spring selling season of 2022.
Sellers have exhibited caution due to the escalating interest rate climate, contributing to this shortage that, in turn, has reinvigorated the surge in prices. Notably, auction clearance rates have rebounded to levels reminiscent of the boom period.
Comparing June’s figures to the same month in 2022, new listings witnessed a decline of 5.5 percent, while total listings experienced a substantial drop of 12.4 percent. Melbourne’s median days on the market (DOM) stood at 31, only slightly up from the preceding year’s 28 days.
There has also been a decrease in demand as well, with a notable 22.4 percent reduction in home sales compared to the same period twelve months earlier. However, there are indications that buyers are gradually making a robust comeback to the market.
The Rise of Buyers Agents
Buyers’ agents have emerged as a driving force in helping homebuyers navigate the complexities of Melbourne’s property market. These professionals, also known as buyer’s advocates, are licensed experts who work exclusively on behalf of buyers.
Their primary objective is to represent the buyer’s interests throughout the purchasing process, from property search to negotiation and closing the deal.
Key Roles of Buyers Agents
- In-Depth Market Knowledge: Buyers agents possess a deep understanding of Melbourne’s neighborhoods, property trends, and market fluctuations. This knowledge enables them to identify properties that align with their clients’ preferences and financial capabilities.
- Access to Off-Market Properties: Many valuable properties are not listed on public platforms. Buyers agents often have access to a network of off-market listings, giving their clients an edge in discovering hidden gems.
- Skilled Negotiation: Negotiating the best price and terms is a crucial aspect of property buying. Buyers agents leverage their negotiation skills to ensure their clients get the most favourable deal possible.
- Saving Time and Effort: Searching for the perfect property can be time-consuming and overwhelming. Buyers’ agents streamline the process by presenting pre-screened options, thus saving buyers precious time and effort.
- Objective Advice: Buyers agents provide unbiased advice, as they do not have a vested interest in any particular property. This impartial perspective helps buyers make informed decisions.
Melbourne’s house prices
The surge driven by the housing sector in 2021 propelled Melbourne’s house prices to unprecedented levels, culminating in their apex in February 2022. Subsequently, there was a decline over the subsequent year. However, since then, there has been a notable resurgence in robust growth.
Melbourne house prices – June 2023
In June, Melbourne’s median house price recorded a further increase of 0.6 percent, reaching a value just below $920,000. Consequently, the movement over the past quarter stands at 1.7 percent, and the yearly decrease has diminished significantly to only 6.7 percent.
The coming period will be observed to determine if this upward momentum can sustain itself amid potential future interest rate hikes or rises in listing volumes.
| Property Type | Month change (Jun 23) | Quarter change (Jun 23) | Annual change (Jun 23) | Current median price (Jun 23) |
| Melbourne Houses | 0.6% | 1.7% | -6.7% | $918,971 |
5 Top Melbourne suburbs for first home buyers – 2023
In February, the rate of correction in Melbourne’s property market displayed a deceleration, with the median house price experiencing a marginal decrease of -0.5 percent, bringing it to slightly below $900,000.
This contributed to a cumulative quarterly loss of -3.0 percent. As the year-on-year figures indicate, the annual declines have now entered the realm of double digits.
With the anticipation of additional rate hikes in the upcoming months, there’s a possibility that Melbourne’s housing market might remain above the market’s lowest point.
Top Melbourne House Prices Under $9,000
| Suburb | Median house price |
| Maidstone, 3012 | $875,000 |
| Hadfield, 3046 | $890,000 |
| Lilydale, 3140 | $837,000 |
| Dandenong, 3175 | $700,000 |
| Caroline Springs, 3023 | $730,000 |
Melbourne property market forecast 2023
After the sweeping property surge of 2021 that propelled median prices nationwide, it was nearly certain that a market correction would follow.
As prices experience an upswing once more, the question arises: can this momentum be sustained, or will elevated interest rates and challenging affordability curtail the rally?
NAB’s most recent Melbourne house price projection has notably softened, predicting a decline of 5.8 percent in Victorian capital dwellings for the year 2023.
In a similar vein, Westpac’s forecast for Melbourne’s real estate market has undergone significant adjustment, now anticipating a mere 1.0 percent decrease in prices for the current year. On the other hand, CBA foresees a mode rate of annual growth.
What are industry experts saying?
According to Zac Newbold, Melbourne’s property market has weathered an array of challenges, including the prolonged impact of the COVID-19 pandemic, an extended period of lockdown, successive interest rate increases (totaling ten), plummeting consumer confidence, and a constant stream of negative media coverage.
“These factors, coupled with stringent lending regulations, have certainly created formidable headwinds for Melbourne’s property markets,”
“A significant turning point has emerged on the horizon for the Melbourne housing market. Newbold notes that the city has effectively navigated the lowest point of the market downturn, with five consecutive months showcasing upward trends in median property prices,” Newbold said.
“Looking ahead, Newbold highlights positive indicators suggesting a potential upswing in the Inner Melbourne unit market’s performance in the upcoming months. Notably, May 2023 exhibited a promising 1.3% monthly increase in property values across the region,”
“The reopening of Australia’s borders to international travelers in the previous year has sparked a robust resurgence in rental demand. This is reflected in a remarkable 20.7% surge in unit rents over the past 12 months, accompanied by a rental vacancy rate of less than 1%,”
However, Newbold also acknowledges that the rising interest payments for investors could potentially prompt some to sell at a loss, especially in light of ongoing interest rate hikes.
“Despite the challenges that lie ahead, the data and trends indicate a cautiously optimistic outlook for Melbourne’s property market in the foreseeable future,” he said
Head of Australian Research at CoreLogic Eliza Owen said,” There are some indicators that market performance across the Inner Melbourne unit market will show improvement in the coming months,”
“May 2023 saw a monthly increase of 1.3% in values across the region, and the re-opening of Australian borders to overseas arrivals last year has seen a strong bounce back in rental demand, with unit rents increasing 20.7% over the past 12 months, and rental vacancy at less than 1%.
“However, higher interest repayments for investors may still prompt some to sell at a loss amid continued rate hikes.” said Owen
Looking ahead, the trajectory of the Melbourne real estate market
The trajectory of the Melbourne real estate market will witness a shift towards quality, leading to a more segmented market—a characteristic of a “normal” property market scenario.
The trend toward quality properties is palpable, as A-grade homes and investment-worthy properties continue to experience scarcity due to robust demand. However, B-grade properties are encountering prolonged selling periods, and savvy buyers are consciously avoiding C-grade properties.
This dynamic is fostering a notable window of opportunity for both homebuyers and property investors with a long-term outlook. While certain discretionary participants may have temporarily exited the market, Melbourne’s vitality remains steadfast. Life events like marriages, divorces, growing families, and the basic need for relocation will persist in the Victorian capital.
Anticipation grows for the imminent cessation of interest rate hikes (which is nearing its end) and the taming of inflation (already past its zenith). These factors will likely drive a resurgent surge of buyers back into the market, even though seller sentiment is yet to fully catch up.
The recent reopening of international borders has positioned Melbourne as a prime destination for new residents, thereby exerting additional pressure on the property markets, particularly in the rental sector.
Projections indicate a substantial increase in Melbourne’s population, with an estimated rise of around 500,000 residents over the next five years, followed by an expected growth of one million over the coming decade.
Federal Treasury’s Centre for Population data projects that Melbourne will house approximately 6.1 million residents by 2033, and a significant portion of this growth will stem from net overseas migration.
This trajectory implies a near doubling of Melbourne’s population since the turn of the century, when it was roughly 3.3 million people as per the 2001 Census, largely attributed to robust net overseas migration.
Considering Greater Melbourne’s development over almost two centuries to its current status of approximately 2.1 million dwellings, accommodating a 50% expansion in housing within existing boundaries over the next decade or two necessitates substantial policy shifts and the development of extensive infrastructure.
Based on data from CoreLogic, the trajectory of Melbourne’s dwelling prices is as follows:
- Over the past week, Melbourne’s property prices witnessed a slight increase of 0.1%.
- The momentum continued over the last month, with prices experiencing a growth of 0.7%.
- Year to date, there has been a notable increase of 1.0% in property prices.
- However, when compared to the figures from a year ago, Melbourne’s property prices still exhibit a decline of -4.9%.
In the dynamic landscape of Melbourne’s property market, the pivotal role of buyer’s agents in guiding homebuyers to success stands out. The property market’s booms and fluctuations have underscored the significance of expert assistance in navigating the complexities of real estate transactions.
Buyer’s agents have emerged as essential partners for homebuyers, helping them seize opportunities, make informed decisions, and secure properties that align with their goals.
As Melbourne’s property market continues to evolve, the synergy between knowledgeable buyer’s agents and eager homebuyers remains a driving force in achieving success amidst market shifts and trends.
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With over 30 years of experience, we know what it takes to buy property seamlessly. Patience is key, but never at the compromise of confidence and our clients’ end game. We’re professional in every facet of our work, dealing with our clients with the utmost integrity and honesty.
When clients engage Your Australian Property Buyers Agents, they can expect Buyer’s Agents that are proactive and passionate. Combining a hard work ethic with passion and attention to detail, we help clients achieve their property goals with ease.
Your Australian Property Buyers Agents is a five-star rated business and it’s because we put our clients first. We promise to be responsive and to truly listen to what our clients need. We're surrounded by noise in the property market – Our goal is to cut through it.
With over 30 years of experience, we know what it takes to buy property seamlessly. Patience is key, but never at the compromise of confidence and our clients’ end game. We’re professional in every facet of our work, dealing with our clients with the utmost integrity and honesty.
When clients engage Your Australian Property Buyers Agents, they can expect Buyer’s Agents that are proactive and passionate. Combining a hard work ethic with passion and attention to detail, we help clients achieve their property goals with ease.
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