SuburbData: where Melbourne homes sell at a discount, and the types of homes that could be a bargain

Safety Beach is home to Melbourne’s biggest sale price discounts for houses, with 60 Coveside Ave listed for sale at $1.099m this year, but sold for $1.07m.

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Melbourne homebuyers can get discounts as high as 13 per cent as they pursue homes in key suburbs this spring.

Houses in Safety Beach are selling for as much as $160,000 below their initial asking price, with discounts also possible in Roxburgh Park and Hampton Park.

SuburbData analysis shows the three suburbs are home to average discounts from 13.4 per cent to 9.2 per cent from what sellers want for their home and what a buyer eventually pays.

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The figures suggest those looking for a unit should head to Malvern East, Clayton and Hadfield where the price can drop more than 10 per cent from the price being sought initially.

And the research indicates there are four suburbs where owners of houses are selling for an at least 8 per cent cut, and another six where the same is possible for units.

Prominent buyer’s advocate Cate Bakos said the reasons sellers were getting less than they’d hoped for varied.

Houses in Safety Beach were probably easier to negotiate for as a result of prices falling away from overheated levels reached during and just after the pandemic — as well as having high numbers for sale as holiday home owners looked to exit in response to increased land tax.

CoreLogic records show 10 Addison Way, Roxburgh Park, was listed for $739,000 and sold for $725,000 this year.

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11 Cody Ave, Hampton Park, went to market with a $800,000-$880,000 price guide and sold at the bottom of the range for $800,000.

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But areas like Hampton Park and Roxburgh Park were likely having results compressed as the primary buyer groups were families who couldn’t afford to pay more due to interest rates reducing their borrowing capacity.

Ms Bakos said with negative gearing discussions in the federal parliament potentially putting investors off, families could do well to negotiate for older homes in the two suburbs that were currently not in demand — but could be slowly improved to make them more valuable.

While Hadfield and Clayton’s unit markets could be facing issues with oversupply making it more likely sellers would have to accept less for their homes, Ms Bakos said Malvern East was an anomaly and an area that could be wise to invest in while vendors were struggling with sales.

7/18-20 Francis St, Clayton, had hopes of a $639,000 sale but secured just $620,000.

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In Altona, another of Melbourne’s suburbs where homes are selling at a discount, 4/146 Maidstone St sold for $605,000 this year after initially being listed for $650,000-$670,000.

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“It’s a well-supported area and in a good central location with beautiful character homes around the units and I’d jump on it,” she said.

Digital Finance Analytics director Martin North said there was evidence of a “deeper drops” in asking prices as listings began to rise, particularly in Victoria, Tasmania and New South Wales.

“We are also seeing more ‘forced’ sales due to mortgage pain or arrears, where vendors have to sell,” Mr North said.

He added that while demand was still strong enough to “mop up supply” for now, there could be more discounting in the new year.

“I expect vendors to hang out for extended prices in these states for a bit longer, but despite the expectation of lower interest rates, eventually, I suspect we will see vendor discounts rising after the summer selling season,” Mr North said.

Not all homes in Safety Beach are selling for a loss, with 46 Spinnaker Terrace notching $1.15m under the hammer after being listed for $1.1m-$1.2m.

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5 Dulnain Close, Hampton Park, also sold just above the bottom of its $675,000-$715,000 price guide for $680,000 earlier this year.

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In Safety Beach, Barry Plant Dromana director Craig Leo said unsold homes that were part of the Martha Cove development, as well as owners looking to sell their beach house or investment were likely behind the results showing the discounts.

“Some are withdrawing their home from sale, but you do see others adjust their price,” he said.

However, Mr Leo said buyers shouldn’t be expecting to get a house on the beachside with land for a discount, with demand for those properties as high as it had ever been.

Ray White Oakleigh’s Leigh Kelepouris said discounts on Malvern East units were most likely for apartments, with townhouses and villas still reasonably well sought.

Mr Kelepouris said buyers targeting new builds were also doing well in the suburb as homes that had sold off-the-plan when the market was at its peak two or so years ago had dropped in value, some now being sold by international investors for less than they paid.

105/1443 Dandenong Rd, Malvern East, is up for sale at the moment and gives an idea of where home sellers are meeting the market with its $475,000-$520,000 asking price.

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3/25 McBain St, Altona, was listed for $600,000-$625,000 — but sold for $580,000.

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“For the apartment space, we have seen them come back, and that’s because there’s a bit of an oversupply,” Mr Kelepouris said.

With many of them bought in the past by investors, there were higher numbers for sale today as a result of higher land tax and interest rate costs — and reduced prices were more likely where a seller had been “overly ambitious”.

“If you price a unit too high at the start, you might not get the competition for a sale and buyers will start to lowball it, which will compromise the price,” he said.

MELBOURNE’S MOST DISCOUNTED SUBURBS

Malvern East: 13.8% (units)

Safety Beach: 13.4% (houses)

Clayton: 11.4% (units)

Hadfield: 10.5% (units)

Roxburgh Park: 10.3% (houses)

Hampton Park: 9.2% (houses)

Melbourne: 8.9% (units)

Williams Landing: 8.8% (houses)

Altona: 8.2% (units)

Kew: 8.2% (units)

*Percentage indicates average reduction from initial listing price to sale price

Source: SuburbData

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