March Market Update: Melbourne’s two tier property market

Melbourne’s property market is active but not uniformly so. Understanding what’s actually driving activity right now is essential for anyone considering their next move, whether buying or selling.

More Stock, But Not All Stock Is Equal

The number of homes for sale across Stonnington, Bayside and Port Phillip is up around 15% on this time last year. On the surface, that sounds like good news for buyers. But context matters enormously.

Much of this additional supply is investment stock — properties being offloaded as local investors get fed up with the regulatory picture. And where one investor exits, another is quietly circling – in this case generally interstate investors. This dynamic is reshaping who is active in the market and what they’re looking for.

The result is a market that is increasingly bifurcated, and understanding which side of that divide a property sits on is everything.

A Tale of Two Markets

At one end, there is a growing pool of compromised, investment-suited stock. These are properties with limitations — whether location, condition, configuration, or all three.

At the other end, genuinely exceptional homes remain as tightly held as ever — and when they do come to market, they perform emphatically. A recent Armadale sale closed more than $1 million above the top of its quoted range before the EOI campaign had even closed. That’s what happens when real scarcity meets genuine demand.

The supply of premium homes in the $5 million-plus bracket remains extremely limited. For buyers at this level, patience and preparation are everything.

What This Means If You’re Buying

In pockets where quality stock is scarce, good buying requires a discerning eye, a deep understanding of market fundamentals and a willingness to move decisively when the right home presents itself.

It also requires the ability to distinguish between a home that represents genuine long-term value and one that simply appears attractive in a thinner market. These are not the same thing, and confusing them is an expensive mistake.

What This Means If You’re Selling

If you own a genuinely good home and have been weighing up whether now is the right time, the data is encouraging. The scarcity of premium stock is working in your favour, and the buyers for exceptional properties are active and motivated.

If your property sits in the more contested middle of the market, pricing strategy and presentation have never mattered more. The gap between well-positioned and poorly-positioned stock is widening.

The Bottom Line

The right time to buy is when you’re ready. Attempting to time the market with precision is an inexact science at the best of times.

What is essential right now is understanding the dynamics at play. The Melbourne market is not one market. Knowing the landscape you’re active in is key.