A More Selective Market

After a very busy March, the market has clearly shifted gears a little over the past few weeks.

There’s a lot going on. War. Inflation. Tax reform.

For some people, buying and selling has understandably fallen down the priority list.

And that’s ok. If you’re looking for an excuse not to move right now, there’s no shortage of options.

Yet others, particularly those looking to upgrade, see this as an incredible opportunity.

And some people simply have a strong enough want or need to buy or sell that trumps the prevailing market conditions (pun intended).

Nevertheless, the overall impact on sentiment has been this: buyers are more cautious, and vendors are needing to be more flexible on price to meet the market.

That said, prices certainly haven’t fallen off a cliff. What we are seeing instead is a far more selective market.

Buyers remain active, but they are becoming increasingly discerning around quality, value, location, and scarcity.

In fact, one of the biggest changes we’ve noticed is just how sharply stock levels have dropped away.

There is simply nowhere near the volume of homes coming to market compared to March, and that lack of supply is continuing to support pricing for quality homes in tightly held pockets.

A good example was a single-fronted Victorian we sold in Armadale on Saturday at 8 Moorhouse Street.

The campaign attracted more than 100 buyer groups through, resulting in a highly competitive auction and a sale price well beyond expectations.

Importantly, the home had also seen very strong capital growth since 2018 – something that certainly isn’t happening across the board right now.

But it was a great property and genuinely one of the only homes available in the area at that price point, which ticked many boxes for buyers.

That’s probably the clearest snapshot of the current market. The best homes are still attracting strong competition because buyers are finding it increasingly difficult to secure quality options.

Interestingly, the market does appear to soften as price points rise.

At the premium end, we’ve seen very few transactions recently, largely because many quality family homes simply aren’t coming to market.

There has not been a single sale reported over $4 million in Malvern since March, nor over $5 million in Malvern East.

There has also been significant discussion around the proposed tax reforms and Federal Budget announcements.

Everyone suddenly became an accountant on social media.

While it’s still too early to fully understand the long-term impact of the proposed tax changes, my broader view is that the family home – the principal place of residence – only becomes more important in this environment given it’s one of the few remaining genuinely tax-advantaged assets.

In simple terms, the old “buy the forever home and never leave” strategy may start looking smarter again. Good news for family homes. Bad news for removalists.

Over time, that may encourage more families to improve, hold, and consolidate into higher quality homes rather than transact frequently.

For our local market, particularly across Armadale, Malvern, and Malvern East, that could mean quality family homes become even more tightly held over the coming years. Which, frankly, already feels like half the battle around here.

Looking ahead, we expect the market to quieten a little further through July before activity picks back up again in August.

Historically, one of the advantages of selling earlier in the season is taking advantage of lower stock levels while buyer depth remains relatively healthy.

Most importantly, buyers have not disappeared.

They’re just a little more selective, a little more cautious, and taking slightly longer to move than they were last year.

Well-priced, well-located homes are still transacting strongly.

The difference now is that the market is demanding realism, quality, and motivation from both sides.