Spring selling season has finally arrived and it never fails to disappoint in Melbourne. Warm sunny days, gardens looking pristine and colourful, the smell of freshly cut grass in the air, and plenty of positive sentiment makes this the ideal few months for buyers and sellers to realise their property dreams.
An interest cut is getting closer by the day
Interest rate cuts are on the horizon, with all four of the big banks expecting the first cut to come imminently. Both Westpac and ANZ have predicted February 2025 for the RBA to announce a drop in the current cash rate which stands at 4.35%. The Commonwealth Bank however is a little more bullish on the timing and has forecast that Australians will see some rates relief by December 2024.
“Overall we believe that if the economic data over the near term evolves in line with the RBA’s latest forecasts the cash rate will be left on hold until Q1 25,” said Gareth Aird, Head of Australian Economics at CBA to Yahoo Finance. “But we continue to side with market pricing and think it more likely than not we will see an interest rate cut by the end of the year.”
There are some banks that have already started dropping their rates, with ANZ slashing their fixed rate mortgage. They announced in early October that they would cut their three-year fixed rate mortgage by 60 basis points to 5.99%, and two-year fixed rate to the same level.
Suburbs bucking the median price trend
While there are a number of suburbs across Melbourne which have seen a drop in median house and unit prices over the last year, Australia’s leading source of property insights PropTrack recently highlighted suburbs where median prices have risen.
Essendon West is one of the suburbs that tops the list for houses, seeing its median price house rise 2.8% over the last 12 months to $1,323,360. Cobug North (2.7%), Narre Warren North (2.7%), and Pakenham Upper (2.9%) are other suburbs which have performed well over the previous year.
“What we are seeing is that the share of suburbs that have a median that falls within the buying range of a lot of first-home buyers is shrinking, and that’s meaning that those more affordable suburbs and pockets are drawing in a higher share of all buyers out there,” said Anne Flaherty, Senior Economist at PropTrack to the Herald Sun. “And that’s why we are still seeing some of them growing.”
Units have seen even better growth with Travancore (8.6% up on its median unit price over the previous 12 months), Ashburton (5.6%), and Sydenham (4.8%) leading the pack.
Don’t wait too long to buy in some of Melbourne’s hot suburbs
There are many areas across Melbourne that are experiencing a big surge in popularity, with houses being snapped up quickly with very little days on the market according to realestate.com.au.
The tranquil and leafy suburb of Skye right on the edge of the Mornington Peninsula for example, had houses selling on average after only 14 days listed on the market for the month of August 2024. This is drastically below Melbourne’s average of properties lasting 42 days on the market. Carrum Downs, Skye’s direct neighbour, also averaged only 2 weeks on the market.
The short market time for some of these hot suburbs is reflective of buyer demand in these areas. The unit market in some suburbs is also red hot, with Croydon North and Ringwood East lasting only 20 days and 21 days respectively. The old adage ‘you snooze, you lose’ might be very relevant for home buyers searching in these suburbs, so there is no time like the present to get to an open for inspection!
Affordable suburbs that could be the next big thing
Buying into million dollar suburbs is always the dream for home owners. That makes some of Melbourne’s most over-supplied and affordable suburbs, some of which happen to be adjacent to more of these affluent blue-chip suburbs, your best buying option this spring.
An article in the Herald Sun in September noted a number of suburbs to watch. Dandenong located in Melbourne south-east is one of these very affordable and very appealing suburbs which is both affordable and currently over-supplied. It’s median dwelling of just under $632,000 has it well below Rowville which is only 7kms down the road, with that suburb offering a median dwelling price of $1.081m. Keysborough, also close by, has a median price tag just short of $1m. 2.26% of Dandenong’s homes are also for sale, a very high percentage that indicates that buyers might be able to get a bargain this spring.
Other affordable suburbs that fit this category include Laverton which is a growth suburb that is significantly cheaper than its neighbours Seabrook and Altona Meadows (with 3.37% of the home’s on the market), and Sunbury which has 2.05% of its total of 13,748 homes for sale.
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