It’s no secret that the property market is cyclical; we ride its high and low points. However despite all the chatter around a ‘slow’ market, the 2011 Census revealed that Melbourne has a higher rate of home ownership than the rest of the country.
In fact, despite home ownership rates falling everywhere else, 71% of homes in Melbourne are owner-occupied, with just 28% rented. By comparison, in the rest of Australia, occupants own 68% and landlords 31%.
So with all this information in mind, what is it actually telling us? Quite simply, Victorians are in a good position to move – the question is; what properties will they move for? In a market where confidence is a little unsteady, what are the must-haves that buyers won’t compromise on? The fact remains that despite where we are in the cycle; there are certain buyer fundamentals that will always ring true. So what are these fundamentals? What kind of homes will make buyers sit up and take notice?
Price remains the key focus
Whilst features like a double garage, polished floorboards and stainless steel appliances are ‘nice-to-haves’, it really comes back to the fundamentals for buyers and at the top of that list is price. In inner-city Melbourne, we’re seeing people put their hands up in auctions for the properties that are priced correctly. A realistically priced home could be the difference in getting one or three bidders on auction day. If a property comes on the market that fits into their price range, buyers won’t think twice whether the floorboards are polished or not!
Quality, location and lifestyle still important
The quality and positioning of a property remains paramount. Well thought out floor plans and access to natural light are high on buyers’ checklists – which comes as no surprise, as having the right amount of light can transform what may otherwise be a drab and dreary property into a space buyers want to call home.
As always, location is a massive draw card. Homeowners want the flexibility of being able to walk to the shops or step out to the nearest tram stop. They are not just buying a property, but seek the particular lifestyle that comes with it. For young professionals, having direct access to the city positively impacts their work and social life. For families, homes close to a great school cut down on commute time and increase family time. The fundamentals in life map back to the fundamentals of a property.
Whilst it comes down to these fundamentals in tough market conditions, there are particular types of properties that will always sell well. For example, period homes like a single fronted Victorian or Edwardian remain in demand. There is a romantic attachment to this type of property for buyers because of the element of history that goes with it. Today, period homes often have a renovated interior. This blend of history and the contemporary remains popular with many buyers, in particular, first home buyers or older couples who are looking to downsize. Large apartments also attract large crowds and are popular with investors as well as empty nesters who want to avoid house and garden maintenance. In particular, Art Deco apartments are gaining in popularity across all types of buyers.
A Focus on the fundamentals
Despite the occasional fleeting fad, it’s clear that there’s no new buying ‘craze’ in real estate. It comes back to the basics – price, quality, location and lifestyle. In fact, these factors are amplified in current market conditions, where buyers waiting on the sidelines for the ‘right’ property are willing to fork out the dollars for their dream home. We experienced this in our own market with an apartment on Denbigh Road in Armadale going for more than 18% above the reserve price. Whether we’re in a strong or flat housing market, demand for properties that tick the fundamental boxes will always hold strong.