Surplus of high end homes hitting Melbourne’s prestige market

Can the run of sales over $25m in Melbourne’s affluent suburbs continue? Buyer’s agency Morrell and Koren director David Morrell says probably not.

A surge of homes in Melbourne’s wealthy enclaves are on the block as vendors put properties on the market ahead of the predicted house price crash next year and to beat the summer slump, a top buyer’s advocate says.

There were almost 30 properties with price guides of more than $3m in affluent suburbs including Toorak, South Yarra and Brighton, buyer’s agency Morrell and Koren director David Morrell said.

He said there were simply not enough ­buyers around for all the homes to sell.

“In real terms, there’s been six sales north of $25m for probably the last six months,” Mr Morrell said. “If you believe the agents and what they think, we’re going to have another 30 to 40 between now and the four weeks before Christmas. It’s simply not going to ­happen.”

Mr Morrell said market sentiment had shifted. “There’s not the competitive environment. This time last year, things were nuts,” he said.

Agents selling properties at the top end of the market say they are seeing nothing out of the ordinary.

Forbes Global Properties’ ­Michael Gibson said the number of properties to have recently hit the market was because spring in Melbourne was the best time to show properties.

“There’s not an abundance of stock in the market. It’s not that we’re over supplied by any means. So the trading conditions should be pretty good,” Mr Gibson said.

Morrell and Koren director David Morrell. Picture: David Geraghty

One of Mr Gibson’s current listings is 3 Macquarie Rd, Toorak, which spans across more than 2100sq m and has four bedrooms, a gym, cellar, a four-car basement garage, floodlit tennis court and pool area at the north-facing estate.

The property is priced between $28m and $30m.

It currently was a nicely balanced market in terms of buyers and sellers, Mr Gibson said, with offshore buyers showing renewed interest, especially as people from mainland China returned to Australia after two to three years.

“They’re coming back and in good numbers and they’re here to buy property in many instances,” he said.

Similarly, Prestige Homes of Victoria director Sean Cussell said there currently were only about six properties priced at more than $20m across the South Yarra and Toorak market on sale. “It’s still not a lot of supply. The demand certainly still outstrips the supply,” Mr Cussell said.

One of Mr Cussell’s listings is 216 Domain Rd, South Yarra, which has a price range of $21m-$23m for the five-bedroom home.

Despite economic pressures creating concern for many home buyers and sellers, properties being listed at the top end of the market usually attracted buyers who were “unlikely to be borrowing money to buy,” Mr Cussell said.

“When the interest rates are 2 per cent, or whether it’s 6 per cent, that’s such historically low interest rates which are really not having any effect on them. They usually are moving for family reasons really more than anything else,” he said.

Mr Cussell said there was still a significant amount of inquiries from Asian buyers.

“They’re still very keenly buying blue-chip Australian property because they take a very long-term view to real estate,” he said.