• REAL INSIGHTS

THE CHAOS MARKET

Welcome to the third edition of our Real Insights Market Update.

Welcome to the Chaos Market. Yes, we’ve dubbed it that for a reason. The real estate industry has seen unprecedented shifts and transformations, akin to the unpredictable and dynamic nature of the chaos theory.

At MRE, we have always strived to be at the forefront of innovation and excellence in real estate. Our commitment to understanding the market inside out, and our passion for helping clients achieve their property goals, drive us to deliver reports that are not just informative but transformative.

As we transition into the cooler months, our focus remains on delivering the best practices and insights to help you navigate the dynamic real estate market. This edition is brimming with valuable information, and I’m excited to share the highlights with you.

  • Rental Market

Well after the summer peak rental market subsided, the Melbourne rental market remains sclerotic. We’ve settled into the harsh reality of Melbourne’s housing crisis.

The second semester influx of students and international migrants has pushed rentals to unprecedented levels, straining an already tight market. Renters face bleak prospects with skyrocketing demand driving prices to record highs. Local and international property owners grapple with rising costs, which trickle down to tenants, worsening the rental affordability crisis. Many investors are selling properties due to increased costs, further reducing the rental pool. Despite slight increases in capital values and rental yields, the overall outlook remains grim with limited new rental supply due to high construction costs and restrictive regulations. Significant intervention or policy changes are needed to address Melbourne’s severe housing imbalance.

Key Considerations

1. Increased demand
The influx of students and international migrants has significantly heightened demand for rental properties.

2. Skyrocketing rental prices
High demand has driven rental prices to unprecedented levels, making it difficult for renters to find affordable housing.

3. Rising costs for owners
Property owners are facing increased holding costs, including compliance expenses, rising interest rates, and land tax bills.

4. Challenges for international investors
International investors are dealing with additional costs and complexities, exacerbating their financial burdens.

5. Dwindling rental supply
Many investors are selling their properties due to cost pressures, reducing the pool of available rental properties.

 

 

An influx of students and international migrants has lead to significantly heightened demand for rental properties

6. Negative gearing
Investors are opting to sell rather than endure the losses associated with negative gearing.

7. Minimal new supply
High construction costs and restrictive government regulations are preventing new residential projects from entering the market, limiting rental availability further.

8. Market outlook
While there is a slight increase in capital values and rental yields, the overall market outlook remains grim without significant intervention or policy changes.

9. Need for policy changes
Addressing the crisis requires a concerted effort from policymakers, industry stakeholders, and the community to create a sustainable and equitable housing market.

10. Impact on renters
Renters are facing escalating costs and limited supply, making affordable housing increasingly elusive.

 

Period homes in Footscray
Renters are facing escalating costs and limited supply

The overall market outlook remains grim without significant intervention or policy changes

Leasing Results in the Past 60 Days

Over the last 60 days, MRE’s leasing activity provided property owners with consistent opportunities to maximise returns, despite a slight dip in average rents and a minor increase in days on the market, highlighting the enduring strength of the market’s dynamics.

 

 

  • Highlight Deals

Melbourne CBD

1803/8 Bowen Street, Melbourne

Listed for 19 days, 26 enquiries, 42 groups through resulting in 30 great applications.

5102/63 La Trobe Street, Melbourne

30 enquiries, 6 groups through resulting in 2 great applications.

7910/228 La Trobe Street, Melbourne

57 enquiries, 10 groups through resulting in 6 great applications.

Melbourne's Inner City

406/5 John Street, South Melbourne

Listed for 15 days, 9 enquiries, resulting in 2 great applications.

2 Jika Place, Richmond

Listed for 24 days, 18 enquiries, 8 groups through resulting in 5 great applications.

405/18 Claremont Street, South Yarra

Listed for 8 days, 28 enquiries, 14 groups through resulting in 10 great applications.

Melbourne's Outer Fringe

1301/51 Homer Street, Moonee Ponds

11 groups through resulting in 8 great applications.

4/9 Turner Street, Moonee Ponds

14 groups through resulting in 5 great applications.

614/8 Olive York Way, Brunswick West

11 groups through resulting in 7 great applications.
Suburb Profile

Northcote

Explore Place Guide

  • Sales Market

The Upcoming Surge in the Sales Market: Insights from MRE’s Sales Manager

In the past quarter, MRE has experienced unprecedented demand from prospective buyers, evidenced by a significant reduction in days on the market and record-breaking sales.

A boom for buyers and sellers

Compared to this time last year, our inquiries have skyrocketed by 57%. This remarkable increase reflects a heightened interest in real estate investments and a strong desire for home ownership, despite the market’s unpredictability. For you, this means that whether you’re selling or buying, the pool of potential deals has grown significantly, offering more opportunities to achieve your real estate goals.

Days on market continues to minimise as the hunger of real estate aspirations grows

Record breaking sales

Over 30 sales campaigns were completed in under 24 days, with many properties selling in less than a week. Enquiries surged by 55% compared to the same period last year, and eight off-market transactions were facilitated, highlighting market readiness and urgency.

A vibrant market

The market remains vibrant with increased stock levels and strong participation from first-home buyers, owner-occupiers, and motivated renters transitioning to homeownership. Additionally, there has been a noticeable return of individuals to Melbourne, enhancing the market’s dynamism. This surge underscores buyer confidence, and MRE’s team has adeptly navigated the dynamic environment, suggesting continued momentum ahead.

Stock continues to meet buyer demand as does participation from owner occupiers

  • Highlight Deals

SOLD — 625/1 Dyer Street, Richmond

15 days on market, sold for $575,000

SOLD — 4711/135 A'Beckett Street, Melbourne

24 days on market, sold for $587,000

SOLD — 408/155 Bourke Street, Melbourne

15 days on market, sold for $365,000

SOLD — 407/12 Olive York Way, Brunswick West

15 days on the market, sold for $445,000

SOLD — 2004/68 La Trobe Street, Melbourne

Sold for $1.55m

SOLD — 702/39 Appleton Street, Richmond

4 days on market, sold for $617,000
Thank you!

Thank you for entrusting MRE as your chosen property partner. It is a pleasure to work with you to optimise your investment.

Your trust in us means the world especially as we navigate the ever-evolving Chaos Market, our trusted relationship remains a constant. We are committed to providing you with top-notch service and support, ensuring your investments are thriving within this dynamic industry.

Thank you for your continued support as a valued client, and we look forward to many more years of partnership together.

 

Regards,

PETE HOOYMANS
Founder

pete.h@mre.today

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