If you were waiting for the bottom of the Melbourne property market, you’ve likely missed it.

A clearance rate of 78% was achieved on the weekend.

Whilst the headline number is impressive the drill down is less so.

Scheduled Auctions
1250
Reported Auctions
625
Total Sold
485
Total Passed In
140
Clearance Rate
78%

Melbourne’s property values are expected to play catch up over the next year or two, with some early signs of a boost in confidence among buyers and sellers. In fact, auction clearance rates have remained strong, indicating a significant depth of buyers in the market.

The Melbourne housing market has underperformed compared to other capitals over the last year, but this creates a window of opportunity for strategic property investors. Melbourne property values have significant upside potential, especially considering the average price of a standalone house is the lowest it’s been against its Sydney equivalent in around twenty years.

Key Trends to Watch:

– Cheaper Properties: Recording stronger price growth, particularly in outer suburban areas

– Rental Market: Exceptionally tight, with vacancy rates at historic lows and rentals skyrocketing

– Population Growth: Projected to continue, supporting Melbourne’s recovery and driving demand for housing

Best Performing Properties:

– Family-Friendly Homes: Established houses in gentrifying suburbs, such as the well established blue chip areas that have previously performed well

– Townhouses and Villa Units: In demand, particularly in middle-ring suburbs

Overall, Melbourne’s property market is poised for growth, driven by strong population growth, economic recovery, and relative affordability. If you’re considering investing, now might be a good time to take advantage of the market’s potential.

“You only find the bottom of the market when it starts going back up.”

It’s only in hindsight, when prices begin to rise, that we can confirm the bottom has passed.

Why it’s difficult to time the market:

Lagging indicators: Economic data and market signals often lag behind real-time market movements.
Unpredictability: External factors, such as economic shocks or policy changes, can impact market direction.
Market sentiment: Investor sentiment and confidence can shift rapidly.

Key takeaways:

Focus on long-term trends: Ride out market fluctuations, focusing on fundamental drivers like population growth, infrastructure development, and economic growth.
Diversify: Spread investments across asset classes to minimize risk.
Buy and hold: Adopt a strategic, long-term approach to investing.

Identifying signs of a market turnaround:

Increased buyer activity
Rising auction clearance rates
Improving economic indicators
Growing investor confidence
Stabilizing or decreasing vacancy rates

By understanding these principles, you’ll be better equipped to navigate market cycles and make informed investment decisions.