‘No escaping any more’: Melbourne suburbs where home owners are selling now

Buyers have more choice and sellers more competition than usual across Melbourne’s housing market this spring, but largely in investor-heavy and mortgage-belt areas.

The number of new listings in Melbourne was 3.4 per cent higher than its five-year average in October, CoreLogic data show, and was mostly concentrated in inner, west, north-west, north-east and outer south-east suburbs.

Some homes have been languishing on the market looking for buyers, so there are 13 per cent more homes for sale overall than the five-year average.

CoreLogic head of Australian research Eliza Owen said a high number of new and accumulated listings made it easier for buyers to find a home.

“It’s happening at a time when buyer demand is soft,” she said. “That means the buyers who are still in the market have more negotiating power, which is probably contributing to the downturn we’re seeing across the Melbourne market.”

Melbourne’s western statistical area, which stretches from Footscray to Bacchus Marsh, was the most elevated from the five-year average. The number of new listings there was 13.6 per cent higher; it was followed by the south-east, from Chadstone to past Pakenham, at 8.3 per cent, and inner Melbourne was at 8.1 per cent.

Owen said the high cost of holding a mortgage was affecting both the mortgage-belt areas and the inner region, which stretched from Essendon to Elwood.

“In west Melbourne, home owners are struggling to pay their mortgage … whereas in inner Melbourne it could be investors struggling with the cost of holding an investment or not seeing growth they expected.”

Melbourne home values fell another 0.2 per cent in October and are 1.9 per cent lower than a year ago.

Quantify Strategic Insights head of data and insights Angie Zigomanis said the 2023 change to land tax, which significantly lowered the tax-free threshold for property values, helped to drive up the number of listings.

“If you owned a single apartment you wouldn’t have been subjected to land tax, whereas now … there’s no escaping any more, so that’s another cost impost,” he said.

New listings were down in the wealthier parts of the city, Owen said, because property owners in those regions were more able to wait out the weak market.

The inner east was the furthest below the five-year average, down 10.4 per cent. It was followed by the inner south, down 7.6 per cent and the outer east, down 6.6 per cent.

“These areas might not have as much urgency to sell,” she said. “People could be holding their properties back from the market because it’s not [considered] a good time to sell.”

Grant Tothill has listed his apartment in Port Melbourne for sale.Credit: Eddie Jim

South Melbourne investor Grant Tothill was offloading his Port Melbourne unit, which had previously been his home. He decided to list the two-bedroom apartment at Nott Street when the last rental agreement ended because of rising costs and hassle associated with being a landlord.

“It just made it more … ‘why are we doing this?’ It’s actually a pity because we would have happily kept on renting it,” Tothill said.

Tothill said he’d made some updates to the unit while living there, and had moved out because he found a newer apartment closer to the city which suited him better. He said the time had come to let go of his old home and was unbothered by the weak market.

“It’s not a capital gains play for us at all. It’s about what’s a fair value for it. It’s a well-loved home,” he said. “It’s not like we bought it for an investment just to be a rental property.”

His agent, Biggin and Scott’s Fraser Lack, said landlords who had lived in their investments were becoming a common cohort of vendors, which benefited buyers.

“The people who … have withstood the storm, so to speak, are selling and they had more of an attachment to those properties,” he said. “The flipside is we’re actually getting turnover of some really great properties that wouldn’t become available otherwise.”

He said an influx of investor listings over the past two years added to buyer choice, but home buyers were mostly interested in the best available.

“Sixty to 70 per cent are pretty average. I think the really A-grade properties are very few,” he said.

Zigomanis said Melbourne has a two-speed property market. “For certain types of properties, it is dampening prices,” he said. “While there are investors coming back into the market, there’s probably an element of better quality versus lesser quality stock.

“But from a demographic perspective, you still have this group in their 30s and 40s and that population segment is still growing, and a lot of dwellings that are attractive to that group are holding up in price. It might be better quality apartments, family homes and townhouse stock.”

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