After a strong start, it’s been an interesting year for the Boroondara property market. Global events and the RBA’s eight consecutive interest rate rises have seen last year’s buoyancy replaced with a more measured approach.
Boroondara market leaders
Jellis Craig’s market share continues to strengthen in Boroondara and beyond. Jellis Craig have sold more than 6,000 properties across Melbourne year to date, valued in total at over $8.5 billion. This includes more than 1,000 properties achieving in excess of $2 million, valued in total at over $3.047 billion.
Where we’ve landed: the market at the end of 2022
Across 2022, many of the levers driving market momentum shifted. As international events and economic headwinds dominated headlines, buyers, sellers and landlords adopted an increasingly circumspect approach. Vendors and buyers have been watching interest rates, including the eighth consecutive rate rise announced by the RBA just yesterday.
November’s auction clearance rate for Melbourne held up at 58.4% according to the REIV, reflecting a lower supply of property for sale than is typical of spring in our city. Boroondara recorded the second highest number of auctions for November, with an auction clearance rate of 69.4% (323 auctions held throughout the month).
Overall, the Boroondara market has fared stronger than many parts of Melbourne. This reflects the area’s ongoing appeal to a wide range of buyers including families, professional couples and downsizers. Boroondara’s excellent shopping, proximity to schools and the CBD, green spaces and mix of established and newer homes makes it an enduringly attractive proposition.
While property values across some parts of Melbourne have softened in the latter half of 2022, this comes off a very strong period of growth during 2020/2021, as well as significant gains achieved across the preceding decade.
Balance returns to rental market
Melbourne’s vacancy rate declined to the record low first achieved in 2018 to 1.1% according to Domain. There is strong demand for family homes, particularly those located within easy reach of schools, transport and shops.
Looking ahead to 2023
Lifestyle continues to be a strong driver of local property decision-making. Whether seeking a more ‘work from home friendly’ property, downsizing or upsizing, Boroondara buyers and sellers are continuing to make real estate decisions that prioritise their life stage and lifestyle needs ahead of almost any other factor.
While fast, short-term decision making has been a recent driver, buyers, sellers and landlords are increasingly looking further ahead and making property moves based on their individual and family needs for the next five or more years.
For those looking to buy and sell in the same market, early 2023 could be an ideal window, with less real estate ‘FOMO’ influencing decision making.
We are expecting a stable market next year. In the run up to Christmas, our team are experiencing good levels of vendor enquiry regarding campaigns starting in February or March. Buyer enquiry levels suggest the first quarter of 2023 could see an overall increase in market activity.
In addition to domestic demand, online property searches from international buyers and renters have increased, as has the volume of workers and students arriving in Australia from overseas. These factors are likely to positively influence the 2023 real estate market in Boroondara and beyond.
By Steven Abbott, Managing Director, Jellis Craig Boroondara