1 hour ago
1
While Melbourne’s housing market softens, a select group of premium, lifestyle-driven suburbs are proving resilient.
Among Melbourne suburbs with a median house price above $2 million, tightly held bayside Middle Park clinched the No.1 spot for prestige performance, recording 10 per cent growth over the 12 months to March, to a median of $2,995,000, according to Domain data.
It was followed closely by the family-centric hub of Glen Iris (up 8.6 per cent), Elsternwick (5.8 per cent), Brighton East (5.1 per cent), and Hawthorn (4.8 per cent).
Ray White economist Atom Go Tian said the luxury tier was historically the most volatile sector when economic uncertainty hit, making the 12-month resilience of these pockets unique.
“In the prestige market … if there’s uncertainty, it’s the first to pull back, but then, if market conditions are good, it’s the first to enter,” Go Tian said.
While premium suburbs were softening nationally, Go Tian said that Melbourne’s blue-chip postcodes relied heavily on an established pedigree and limited supply to weather broader economic downturns.
“All of these Melbourne suburbs have an aspect of a legacy,” he said.
“Your buyer demographic would be similar to what it was in the past – lots of corporate executives and intergenerational wealth. These suburbs tend to have a very distinct character, which seems to be timeless. [It’s] the characters and liveability of the suburb that makes it so attractive.”
Go Tian said scarcity was a contributor to the success of suburbs like Middle Park.
“Listings are quite limited, and so when things come out, buyers tend to flock to them, regardless of market conditions.”
On the ground, agents were noticing affluent house-hunters ditching massive blocks for low-maintenance lifestyle options.
Marshall White Stonnington sales director John Bongiorno, who moved to the area himself 12 months ago, said the neighbourhood had become a drawcard.
“The big trend we’ve seen the last couple of years, especially last year, is downsizers ... from the City of Stonnington or Bayside or Boroondara,” Bongiorno said.
“People are just looking for a lifestyle ... something lock-up, and leave, and low maintenance. You don’t need your car. It has a village feel about it. ”
Bongiorno said buyers were willing to trade large backyards for proximity to the beach, Albert Park Lake and South Melbourne Market. Because of this hyper-local demand, premium properties are being snapped up before auction day.
“We just sold [35 Canterbury Road] before the auction ... in excess of $5.3 million and that was contested between three buyers before auction, three days after going onto the market,” Bongiorno said. “It’s really swimming against the trend.”
However, Shelter Real Estate director Zali Reynolds said the property market in Glen Iris had been softening since earlier this year.
“It doesn’t feel like that on the ground, to be completely frank,” Reynolds said. “It was all sunshine and rainbows until March, and then it fell off a cliff.
“At the moment in Glen Iris, I think there’s more $4 million-plus houses on the market than I’ve seen in years, and none of them are selling.”
Despite the immediate cooling-off, Reynolds said Glen Iris had strengths which protected its long-term value, including a lower density than surrounding areas and a highly insulated buyer demographic due to its proximity to medical centres and schools.
“Glen Iris is a really big hub for the medical fraternity because of its access to pretty much every hospital,” Reynolds said.
“Straight up Burke Road to the Austin; you’ve got Cabrini, the freeway, you’re out at the Monash or into The Alfred or St Vincent’s ... their incomes are not affected by war or interest rates.”
Director of Advocate Agency Diana Taranto noted the high-income bracket fuelling these areas had diversified.
“I specialise in family housing in the inner suburbs of Melbourne ... Boroondara, Stonnington,” Taranto said.
“It’s professionals, business owners, it’s definitely the high-income brackets ... a lot of people that are small-business owners, more than before, or people who run start-ups.
“Understanding what a home is valued at is really important ... because there’s a lot of off-markets [sales] right now,” Taranto said.
With construction costs and renovation delays a major deterrent to buying, she said, wealthy buyers were refusing to take on building projects, meaning finished homes were holding their value best.
“Buyers value a ready to move-in home, good floor plan, and properties that have that, there’s always going to be competition for it,” Taranto said.
“Move-in ready is important ... A lot of people don’t want to pick up a paint brush.”
For buyers who have long aspired to break into these postcodes, Reynolds believes the current market conditions represent a good opportunity.
“Now’s actually a really good time to buy ... the opportunity is the greatest I’ve seen in a long time.”
