FOOP is hitting Melbourne property buyers as they look for more deal opportunities as the market cools. Blue chip areas like Kew and Brighton East are among the top spots for deal hunters.
Melbourne house hunters are getting more opportunities to close deals as the property market bounces off its extraordinary peak.
Buyers begin to exchange FOMO (fear of missing out) for FOOP (fear of overpaying) as interest rates rise and terms change.
Affluent suburbs like Kew and Hawthorn, as well as pockets to the west of the city and the outer fringes of the city have been identified as popular areas for deal hunters this year.
– Scroll down to see the full list of fastest and slowest selling suburbs + suburbs for the biggest discounts
Box Hill South tops the list of Melbourne suburbs with the highest supplier discount rates, with the typical seller accepting a price 4 percent below their original asking price, figures from PropTrack show.
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Bargain hunters can also look to suburbs where homes stay on the market longer.
The average time to sell for a home in Brooklyn, west Melbourne, 79 days, is the longest in the metropolitan area.
PropTrack’s executive manager for economic research, Cameron Kusher, said both approaches could give buyers better opportunities, but the real deals were more likely to close later in the year after more interest rate hikes.
Mr Kusher said the median seller discount, which represents the difference between an initial listing price and what a property is sold for (excluding auctions), has historically been closer to 5-6 percent in many suburbs – meaning most sellers in Melbourne at or above their asking price.
“These levels of discounts are still very low… but we would expect more discounts to happen,” said Mr. Kusher.
“And it won’t necessarily be Box Hill South in 12 months. It could be areas on the fringes of the CBD that were popular during the pandemic, but where the pressure to these areas will not be as strong.
“And any weakness in the market will initially be most prevalent at the top of the market.”
He added that suburbs such as Kew, Hawthorn and Brighton East, which are already among the most discounted in the city, could be the suburbs to look for “more room to negotiate price”.
“Sellers will have to show some flexibility, which is what happens when you come out of a price boom and your interest rates go up,” Mr Kusher said.
However, in areas with shorter times in the market, buyers were likely to “continue to pay the top dollar and compete with a lot of people.”
Game Property Advisory buyer advocate Jim Malamatinas said that while townhouses in desirable suburbs and units with gardens or courtyards still performed strongly, those on major roads or next to large blocks of units were the ones that “were on the market longer and where discount is given”.
Mr Malamatinas said buyers did not feel the sense of urgency they had in the first two years of the pandemic.
“Last year buyers were in a state of FOMO and now they’re in FOOP for fear of overpaying,” he said.
“If you are clear about your objective and strategic in your approach, there is an opportunity to buy in this market, especially for investors.”
Mike McCarthy, executive director of Barry Plant, said most properties are now advertised for more than 30 days, compared to last year’s “high 20s.”
He said that in the far east, where homes were still selling in just 10 days, the top end of the market was “still doing very well.”
Cate Bakos, president of the Real Estate Buyers Agent Association of Australia, said Ardeer and Laverton, where homes were advertised for a median of 61 and 60 days respectively, were “potential gentrification suburbs” despite low competition among buyers.
PropTrack’s Home Price Index shows that property prices in Melbourne fell in May, for the first time since April 2020.
Marty Burke and fiancé Carissa McManara moved to Belgrave South in the Dandenong Ranges in 2019 from Bellfield in Melbourne’s northeast.
A few days after arriving, Mr Burke was already training at the local cricket club, and the friendly community has kept them busy ever since.
With their daughters Hazel, 6, and Rhiannon, 11.5 months, also enjoying life in the ranks, they’re not surprised to see houses sell quickly.
“We wanted to move to a quieter and more peaceful place, and it’s a great place here,” said Mr. burke.
“And the house has given us a lot of space. You can hear kookaburras and sometimes you can see the strange wallaby jumping around.
“And there is still plenty of room for guests and family to come and stay with us. You can have three generations under one roof.”
Despite their love of the location, they’ve listed their four-bedroom home at 168 Belgrave Hallam Rd, Belgrave South, for $845,000-$928,000 as they prepare to move to the highway for family reasons.
Ranges First National agent Grant Skipsey said that in recent months, many of the buyers coming to the area have come from urban suburbs such as Preston and Brunswick.
“They come from what used to be working-class areas and they want a little more space for their families,” said Mr Skipsey.
“It’s about quality of life and enjoyment in these areas, and now people don’t have the commute because they can work from home.”
FASTEST SELLING SUBURBS
Coldstream – 10 days
Sassafras – 10 days
Millgrove – 10 days
Seville East – 11 days
Seville – 11.5 days
Belgrave South – 12 days
Tecoma – 12 days
Wandin North – 12 days
Upwey – 12 days
East Warburton – 12.5 days
PropTrack numbers for where homes spend the lowest median days on the market
SLOW SELLING SUBURBS
Brooklyn – 79 days
Lancefield – 67 days
Aberfeldie – 64 days
Ardeer – 61 days
Balwyn – 60 days
Laverton – 60 days
Maribyrnong – 60 days
Essendon North – 59 days
Altona North – 56 days
Niddrie – 56 days
Sunshine – 56 days
PropTrack numbers for where homes spend the longest median days on the market
SUBURBS FOR THE BIGGEST DISCOUNTS
Box Hill South – -4%
Templestowe Lower – -3%
Hawthorn – -3%
Richmond – -2%
South Yarra – -2%
Kew – -2%
North Melbourne – -2%
Brighton East – -2%
Doncaster East – -1%
Glen Waverley – -1%
PropTrack Suburbs Where Sellers of Private Convention Homes Lower Their Initial Asking Price the Most
– additional reporting by Nathan Mawby
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Originally published as suburbs of Melbourne where homeowner discounts, days on the market give buyers a chance to close a deal