Melbourne’s property market is currently sitting in an interesting position. While some media coverage has painted a particularly negative picture of the city, the reality on the ground is more nuanced.
There are certainly challenges facing Victoria. Crime, cost-of-living pressures, government debt and broader social issues are all influencing sentiment, particularly as Victorians head towards the state election on 28 November. However, these issues should be considered alongside what is actually happening in the property market, rather than being viewed as a direct reflection of Melbourne’s overall health.
Buyer and Seller Confidence Has Softened
The property market has undoubtedly slowed. Buyer numbers have reduced, listings have also declined and the depth of the market is not what it was during stronger periods.
However, this does not mean the market has stopped.
Vendors are still selling and buyers are still buying. There isn’t one clear category of buyer that is either completely in or out of the market, although investors are certainly reassessing what and where they purchase.
The reduced depth of buyers is one of the more noticeable changes. With fewer buyers competing for each property, we are seeing more sales occur within, or only slightly above, quoted price ranges rather than the runaway prices experienced during stronger market conditions.
For some segments of the Melbourne market, conditions have become more balanced, while others have tipped more towards buyers.
The Impact of Winter and the Federal Budget
Winter is traditionally a quieter period for Melbourne property, and this year has been slower than previous years.
The Federal Budget announcements in May have also contributed to uncertainty and weighed on confidence. There has been plenty of discussion in the media about the state of the property market, but the reality is that the market is not one-size-fits-all.
Some properties continue to attract strong interest, particularly where they offer the right combination of location, quality and value. Others are taking longer to sell and require vendors to be more realistic about pricing.
The media narrative can have a significant impact on confidence. When buyers and sellers are repeatedly told that the market is struggling, some will naturally delay making decisions. This can contribute to a self-reinforcing cycle of caution.
What we’re watching this Spring
The next few weeks will be particularly important.
We are now entering the period when auction campaigns traditionally begin to increase. A typical campaign runs for around four weeks, meaning properties coming to market now are likely to be heading towards auction in September, coinciding with what is traditionally considered Melbourne’s spring buying season.
One of the key indicators we will be watching is the number of scheduled auctions compared with the total number of properties coming to market, including private sales and expressions of interest campaigns.
This will give us a better indication of vendor confidence and whether sellers are prepared to bring their properties to market despite the current uncertainty.
Off-market transactions will continue to occur, although these are naturally harder to measure when assessing overall market activity.
The Victorian Election could create further uncertainty
The Victorian election on 28 November is likely to be one of the biggest factors influencing the local property market over the coming months.
Historically, elections can cause some buyers and sellers to pause their decision-making while they wait to see the outcome and consider whether proposed policies could affect their financial or property decisions.
There is also considerable discussion around Victoria’s debt position, infrastructure spending, cost of living and the broader direction of the state.
A change of government could bring renewed optimism for some Victorians. At the same time, any incoming government looking to improve the state’s financial position may need to make difficult decisions around spending and infrastructure investment.
Until there is greater certainty, it is reasonable to expect some buyers and sellers to remain cautious.
What happens after the election?
The interesting part is what happens next.
Once the election is over, we expect the market to return to more normal activity. The challenge is timing. With the election taking place on 28 November, there will only be a relatively short period of normal business before Christmas and the summer holiday period.
This means the real opportunity for increased market activity may come in early 2027.
Our expectation is that 2027 could start strongly, supported by a new year, greater political certainty and potentially a renewed sense of optimism among buyers and sellers.
That doesn’t necessarily mean we expect prices to suddenly surge. Rather, we expect confidence and participation in the market to improve, which could increase competition for quality properties.
Should you buy now?
For buyers, the current market presents an interesting opportunity.
There is less competition than we have seen during stronger periods, vendors are generally more realistic and there is less pressure to compete against large numbers of buyers.
This doesn’t mean every property represents good value. In fact, this is exactly the type of market where careful due diligence, accurate valuation and strong negotiation become particularly important.
Buying ahead of a potential recovery can also mean avoiding the competition that may return once confidence improves.
The key is not trying to perfectly time the bottom of the market. Instead, buyers should focus on finding the right property at the right price and taking advantage of the conditions that exist today.
Our view? If you’re financially ready, buying now could mean getting ahead of the market rather than waiting for everyone else to regain confidence.
At PMC Property Buyers, we help buyers assess opportunities based on the property, the location and the numbers rather than getting caught up in the broader media narrative. If you’re considering buying in Melbourne, our team can help you understand where the opportunities are and negotiate with confidence.