In Melbourne, the top of the market is driving the bottom: Mal James
Our overall Inner Melbourne market is being driven by overseas interest (of course not on every home) – we all know that. But what is of further interest is the flow on effect to the lower parts of the market.
The top of the market is driving the bottom of the market. This means as buyers continually miss at higher price points/main suburbs they begin to gravitate to “lower price points” and “the fringes of the wealthier suburbs” as their expectations change and their need to be satisfied intensifies.
This puts even greater pressure on the lower segments of the market and this is how overseas buyers are driving the market at all levels, even if they are not seen to be bidding at every auction.
Melbourne's Bayside feels like it’s a powder keg – the question appears not if, but when. Bayside has been to Inner East in terms of price, what Sydney is to Melbourne. Bayside is behind Inner East on prices, when a few decades ago they were on parity (of some sort).
With the number of Asian people going through Bayside OFIs it feels like things must change over the next few years. The “undervalued” suburbs of Brighton and Hampton feel like they may start to see the numbers that Toorak, Balwyn and Kew have been attracting over the last decade.
It is only my speculation and I do live in Brighton, so possibly I’m getting ahead of myself, but it just doesn’t feel like I am.
New Strategies to meet new markets
After the worst start to a year at James Buyer Advocates in terms of success, we had four from four positive auction outcomes for our buying clients at Richmond (Stuart Evans), Bentleigh (John Gorman), Brighton (Andrew Campbell/Chris Hassall) and St Kilda East (John Manton/Fiona Ansell-Jones).
These four 'volcano' auctions involved a complete revisit on strategy at our Negotiation Council last week.
Strategies that had worked this time last year to the tune of an 84% success went out the window and were replaced with new fresh ways to manage what, in early 2015, has become an incredibly difficult market for buyers
Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
