Mr Lawless said although the bottom end of the market was holding up, it was likely to follow the trend of the inner city later this year.
“The upper end leads the upswings and downturns, so it’s really a bellwether for the market overall,” he said.
Some houses are passing in before selling, agents say.Credit:Peter Rae
Despite the falls, house values are still higher than they were pre-COVID, Mr Lawless said, meaning new owners would not be in negative equity.
Values are falling as more homes are listed for sale and buyers have more choice and less urgency, in contrast to last year’s price boom when few homes were listed for sale and buyers were armed with ultra-low mortgage rates, government incentives and the strong desire to find more space during Melbourne’s many lockdowns.
Though values are softening at the top end of town, they are well ahead of pre-pandemic levels.
Values in the upper 25 per cent are 10.9 per cent higher than when COVID-19 hit, with the bottom 25 per cent 6.7 per cent higher, Mr Lawless said.
House values in ritzy South Yarra have falled in the March quarter Corelogic data shows.
The changing market was good news for buyers, who would now have more choice as more properties were listed, he said.
Abercromby’s Armadale senior sales executive and auctioneer Jack Richardson had seen the market around South Yarra shift to become more neutral, with fewer bidders at auctions.
The market, he said, is not what it was just last year, where homes were selling rapidly as there were fewer homes for sale and more buyers in the market.
“Things are still selling for reasonable prices but the method of getting there has changed,” Mr Richardson said. “Where we had 4 to 5 bidders, that has dropped to 1 or 2.”
Houses in Melbourne’s outer suburbs have been more resilient, Mr Lawless said.Credit:iStock
“Properties are selling prior to auction, or their passing in and selling directly after,” he said.
Likewise, in Richmond and Cremorne, the market was also showing signs of change.
Fletchers director Nick Fletcher said auctions there were not as competitive as they had been at the end of 2021, though properties that were selling were still getting good prices.
“I think it’s more a perception of properties being worth less in a couple of months’ time,” Mr Fletcher said. “Good homes are still selling well but those that are compromised are having a harder time.”
The Melbourne suburbs where property values have fallen most in the past quarter
Source: Philippines Alive
