The moderation of interest rate increases towards the end of last year proved to be pivotal in fostering a more stable purchasing environment. This shift, following a period of aggressive rate rises, has encouraged buyers who may have been waiting on the sidelines to re-enter the market with renewed enthusiasm. This has been further bolstered by chief economists predicting potential, which bodes well for investors and homeowners looking to sell, and suggests the market will maintain its upward trajectory. 

The extremely strong start to the year and high transaction rates have been particularly evident in our premium property sector. This preference has been reflected in auction results, with high quality homes often drawing multiple bidders, enabling those vendors to maximise the sale price. Renovated and move-in-ready homes have also remained resilient against market conditions.

The construction sector is experiencing its own set of challenges. While building costs are showing signs of stabilisation, they remain a concern for some buyers, particularly those considering significant renovations or new builds. This has fuelled the ongoing demand for renovated and newly built properties, with architect-designed refurbishments and builds attracting a premium. We have noticed buyers are prioritising additional living spaces, such as basements, to help maximise use of smaller blocks of land, and sustainable features including water tanks and solar panels to reduce environmental impacts and the running cost of a property.

Rental growth continues to accelerate across Port Phillip, with one- and two-bedroom properties in high demand. Population growth, coupled with a decline in household size, is creating a mismatch in supply and demand, which is putting pressure on the rental market.