These are the properties that buyers are competing for the most
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So far in 2023, the number of homes coming onto the market has been tracking well below 2022 levels in all capitals, with new Domain data showing new listings are down by at least 20 per cent in Sydney, Melbourne, Brisbane and the Gold Coast compared to the same time last year.
On the flip side, buyer demand has increased in Melbourne and Sydney week on week since mid-January and remains stable in Brisbane, indicating buyers are more actively searching for a new home.
So, with the supply of homes for sale down, and demand up, what kind of properties are generating the most competition among active buyers?
1. Turn-key properties
Whether newly built or newly renovated, the most popular dwellings along Australia’s east coast right now are those where all the buyer has to do is turn the key and move right in.
“Buyers don’t have an appetite for renovating or building due to increased building costs and the difficulty of taking on such projects,” says Jayne Robbins, Brisbane buyer’s agent and founder of The Informed Buyer. “Buyers are not keen to navigate through the building process and are looking for completed options where they can just move in and not have any work to do or additional expense to outlay.”
McGrath Inner West agent Alexandra Stamatiou-Buda also reports strong competition for renovated and new builds.
“Good properties are performing really well, especially turn-key propositions because buyers were affected the last couple of years with the rise in building costs,” she says. “So, what we’re seeing is that they’re paying a premium to buy a property where they don’t have to do anything.”
Andrew Date, founder and buyers’ agent at Industry Insider Property Advocates, says top of the list for Melbourne buyers are renovated, free-standing or semi-detached homes.
“The majority of our current clients are wanting to avoid major renovations due to the cost and time associated,” he says.
Kay & Burton partner Grant Samuel says buyers at the premium end of the Melbourne market are equally concerned about what a property will cost to build or renovate.
“Anything that’s a turn-key solution, properties that people can move into and not have to engage builders or worry about any construction costs or reno costs, they’re in high demand,” he says.
2. Homes in the inner-city ring
In Victoria, Date reports a shift away from regional centres, which enjoyed increased popularity during the pandemic.
“During COVID one of our main buyer briefs was lifestyle and Mornington Peninsula,” he says. “Currently, this trend has reversed and we are helping significantly more clients wanting to be closer to the inner 10 to 20-kilometre ring of the Melbourne CBD.”
Samuel is fielding strong enquiry from international buyers looking to purchase in the local government area of Stonnington, with good competition for listings in Toorak.
In Brisbane, blue-chip suburbs located five to seven kilometres from the CBD are in demand, says Robbins, including Ashgrove, Bardon, Paddington, Toowong, Grange and New Farm.
There are a handful of suburbs in Sydney where prices are rising as buyers compete for limited stock, says Shore Financial chief executive and mortgage broker Theo Chambers, including Petersham, Alexandria, Willoughby, Five Dock and Wareemba.
3. Properties with home offices and access to public transport
There are still plenty of people working from home, which means homes with quiet zones that can accommodate a good-sized desk are in demand.
“We are still noticing a trend for buyers wanting dedicated home offices or a work-from-home space,” says Robbins.
Stamatiou-Buda says a home office is high on the list for professionals house hunting in the inner west, but adds that properties located within walking distance of public transport are back in the spotlight as people return to offices in the CBD and commercial centres.
“Through COVID, people said it doesn’t really matter how far I am from the train station,” she says. “Now people are asking ‘how long do you think it will take me to walk there?’ ”
“A lot of buyers are going back to work, and uni students are back on campus and therefore they need that public transport option.”
4. High-yield investment properties
After 10 consecutive interest rate rises, it’s not surprising to hear that investors are keen to find property with strong yields to provide cash-flow safety.
Darren Venter, director at The Investors Agency, says interest has been strong in affordable locations with good economic growth.
“[For example] in Queensland, we’re seeing that Yeppoon’s population is supported by affordability, amenity and tourism, resulting in a population increase that is driving demand and therefore property prices,” he says.
For those investors who will list in the coming months, Venter says the easiest thing landlords can do to maximise their sale price is to list for sale one to two months before the lease runs out.
“Generally speaking, about 70 per cent of buyers are home owners and 30 per cent are investors,” he explains. “By having a long lease in play at the time of sale, it means you’ll be missing out on 70 per cent of the potential buyers.”
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