Melbourne summer 2024 snapshot: what selling agents are seeing

Melbourne's January and early February 2024 period has genuinely surprised many in the property sphere, proving unusually active compared to what we've come to expect historically. Usually, the summer holiday effect casts a long shadow over residential sales, leading to a noticeable lull. We typically see the first month of the year produce a significant dip, often 30% to even 40% fewer settled transactions than the bustling November-December average. Think of it as the market taking a proper beach holiday. But this year, January 2024 bucked that trend dramatically. The drop was closer to a mere 15%. To put that into perspective, this marks the most active January Melbourne has recorded since a robust 2016. That’s a seven-year high, and it speaks volumes about the underlying currents.

The driving forces behind this unexpected surge, as discerning agents across Melbourne are reporting from the front lines, are predominantly serviceability-related. It's a tale of rates and renewed confidence. Many prospective buyers who had diligently secured pre-approval throughout the fourth quarter of 2023 found themselves in a subtly improved position come early January. The big banks, sensing a stabilisation in the fixed-rate book runoff, subtly repriced existing-customer rates marginally lower. This small but significant shift was enough to tip the scales for many. Pre-approvals that were teetering on the edge, perhaps borderline in the tighter conditions of November, suddenly cleared in January. This wasn't merely a minor adjustment; for a segment of the buyer pool, it was the green light they needed. The upshot? Buyers who had realistically penciled themselves into the autumn 2024 buying window, expecting to launch their search later in the year, pulled their plans forward. They saw an opportunity and seized it immediately, rather than waiting for the traditional autumn flurry.

The stock side of the equation, however, hasn't quite kept pace with this accelerated buyer demand. This is where the market dynamics become particularly interesting. Auction volumes throughout February have remained notably thin, a consequence of many vendors strategically targeting the Easter and post-Easter campaign windows. For instance, in areas like Brighton and Toorak, traditionally bustling with high-end listings, we’ve seen fewer trophy homes hit the market than typical for early in the year. Similarly, the terraced homes of Fitzroy and Brunswick, usually a strong draw, have been in shorter supply at auction. Vendors are holding back, perhaps hoping for maximum exposure and competition once the full autumn selling season kicks into gear. The result of this mismatch is a temporary, but pronounced, inversion of the typical seasonal pattern. We’re witnessing more competitive buyer-side conditions in what is usually a relatively quiet sales period, all within a broader market that, by and large, continues to favour buyers with a patient approach. This immediate competition, while somewhat intense, isn't necessarily indicative of the full year's trend.

Consider a detached family home in Balwyn North. In a normal January, that property might see a handful of serious contenders. This year, agents have reported open homes with significantly higher attendance, often seeing 30% to 40% more groups through than anticipated, with multiple offers surfacing promptly, sometimes even pre-auction. This quick decision-making is atypical for the festive season hangover. Or look at the inner-city apartments around Southbank and Docklands. While not experiencing the same level of white-hot competition as houses, even these segments have seen slightly firmer price expectations from vendors and a quicker turnaround from listing to offer. This suggests that the buyer pool, feeling empowered by slightly better loan serviceability or simply a renewed sense of urgency, is active across various price points and property types in early 2024.

The crucial takeaway for buyers currently considering their entry into the autumn campaign window is this: the true supply-side reckoning is still very much ahead of us. The competitive buzz and heightened activity we've observed in February are largely an artefact of thin supply rather than a fundamental shift in market power. As we move squarely into mid-March and onward, Melbourne is poised for its larger autumn stock releases. Historically, this is when vendors, having prepared their properties over summer, unleash a wave of new listings. This influx of homes should, in turn, restore a more typical level of buyer leverage across the market. We anticipate seeing a broader spectrum of properties, from entry-level homes in the outer growth corridors like Cranbourne and Pakenham, to established family residences in the middle-ring suburbs like Glen Waverley and Essendon, and certainly a more substantial offering in the premium segments.

Specifically, those segments that experienced a softer run through 2023 are likely to benefit most from this increased supply. The bayside premium market, an area like Brighton or Sandringham, which saw some price corrections and longer days on market last year, should offer more choice and therefore more negotiation room. Similarly, the unique and highly sought-after inner-north terraces, in suburbs such as Fitzroy, Carlton, and Northcote, which often command premium prices but also saw some variability in buyer depth through 2023, are expected to feature more prominently. Even the outer growth corridor, areas like Tarneit or Doreen, where affordability is a key driver, will likely see a larger inventory, providing more options for first-home buyers and young families. As more homes become available, the current intensity we've seen in February will likely dissipate, allowing buyers to take a more considered approach, compare properties more effectively, and ultimately negotiate from a stronger position once the full force of the autumn market arrives. What we've witnessed so far is merely the warm-up act. The main event, with its full complement of properties, is yet to come.