Spring brings a 40% increase in property on the market in Prahran: Hockingstuart

For the everyday consumer, spring begins in September. For the property market, it also technically starts in September, but as a real estate agent our activity actually ramps up much earlier. We’re preparing for the season as early as June, and come July we know whether spring will be busy by the number of upcoming listings in our books.

So it came as no surprise to see a 40% increase in our stock this season from winter – September was busy, but October will be hectic. Our clearance rate is at 81%, and properties are selling quickly, with average days on market sitting at just 24 days.

Prahran has weathered the storm quite well compared with other Melbourne suburbs, a good reminder that the property market is actually made up of multiple “sub-markets”. While sales activity has certainly picked up for us since winter, in general our levels all year round have remained consistent, with auctions remaining popular and clearance rates hovering around 80%. In fact, according to RP Data’s top 100 growth suburbs nationwide, Prahran topped the list in Melbourne.

Why? Our popularity comes down to one factor – affordability. It’s one of the few inner-city suburbs where you can still pick up a period home located close to shops, restaurants and public transport for under $1 million. Add multiple interest rate cuts to the table and there’s never been a better time for young couples to buy into a lifestyle location and still set themselves up for a family. We’re expecting a lot of interest at this weekend’s auctions for 1 Chatsworth Road and 82 Bendigo Street, with Chatsworth priced within a $700,000 to $750,000 range and $760,000 to $830,000 for Bendigo. The properties at 82 Hornby Street and 9B Percy Street will also fare well because of their proximity to the Chapel Street precinct.

Having said that, over the past month we’ve also noticed an influx of buyers return to the sub-$1 million market, and demand is back for Edwardian and Victorian-style homes. Again, these buyers – particularly those with double-income and no kids – are driven by affordability and see the opportunity to jump into a stable market before prices start increasing again.

From a seller’s point of view, an interesting trend we’ve picked up is a growing investment in online advertising. Ten years ago, advertising was dominated by brochures, property boards and print. Today, while traditional methods are still present and will continue to play a crucial part in selling houses, the focus is shifting to online. This is reflective of the new generation of buyers who are online savvy, with the majority using the internet as one of their main tools to look for property – sellers are following suit. However, no two properties are the same, and in the same way that prices vary depending on the property, the same rule applies to advertising. There will be properties that sell better online, some better in print, but often the most effective advertising campaigns use multiple touch points.

Looking ahead, we expect the market in Prahran to remain strong. Further interest rate cuts will help drive confidence, but growth in house prices will be gradual – we’re not going to see the price hikes we saw in the years leading up to 2010. However don’t forget the Melbourne real estate market is made up of multiple sub-markets, so it will be a different case for each suburb – where one area might be seeing rapid growth, another might be depreciating in value. Prahran will fare well because of its affordability, prime location and amenities, but it won’t necessarily be the same for the next suburb. Statewide, the market is still finding its feet so there’s great value for buyers ready to take the plunge now – as long as you do your due diligence on the area.

Andrew James has more than a 20 years’ experience in real estate and is director of hockingstuart Armadale.

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