Dire forecasts for Melbourne’s property market could be your ticket to the next step up the property ladder.
Property experts have revealed how homeowners can turn falling prices into a better address or bigger home — and which homes and suburbs have the best chance of making the jump.
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A Moody’s Analytics and CoreLogic report has revealed Melbourne’s elite suburbs in the city’s inner east and inner south would see house values fall more than 10 per cent this year, despite expectations they would only slump about 4.5 per cent in the rest of the city.
Now market experts have revealed smart homeowners in Melbourne’s outer east, north and even the west could exploit a less dire forecast for values in their neighbourhood to sell and buy into the city’s blue-chip suburbs before the market turns back up again.
While it might mean a bigger loan, homeowners from just about anywhere in Melbourne could take advantage of the conditions, according to realestate.com.au chief economist Nerida Conisbee.
“What we can see on our site is that there are places doing pretty well at the moment,” Ms Conisbee said.
“Areas like Park Orchards and Warrandyte (outer east), and if you are outer and looking to go inner, that’s the group that could do quite well.”
Advantage Property Consulting buyer’s advocate Frank Valentic said homeowners in a number of Melbourne’s middle northern and western suburbs could be winners.
“Areas like Yarraville, Footscray, Seddon and Williamstown,” Mr Valentic said.
“Those areas will be able to hopefully sell at a higher price because there’s more fish in the $1.5 million pond. And if they want to make that move to the inner east or south, you might pick up a home in Elwood that sold for $2 million a year ago at $1.8 million now.
“And to the north, owners in Preston, Brunswick, Northcote and Thornbury might be able to sell and jump to Kew on the east side.”
Falling prices in the city’s inner east and south were in part because of their earlier success, with house values in many suburbs rising 80 per cent or more in the past five years, he added.
“They are never going to go out of fashion for long, and if you are trying to trade up to one I don’t think there’s been a better time since the last downturn in 2012,” Mr Valentic said.
CoreLogic Australian head of real estate Geoff White said those willing to compromise on size had a particularly good chance.
“If they want to go from a four-bedroom house in the north or west and scale back, the opportunity is going to be better for them in 2019 than it has been for quite some time,” Mr White said.
“And there’s been some good escalation in price growth in the north and west.”
Buyer’s advocate Cate Bakos said suburbs like Camberwell, Kew, Brighton and Hawthorn would likely be high on the agenda for those looking to cash in on the discrepancy.
There were also homeowners who could potentially benefit more than others thanks to evergreen features.
“Especially those in areas with a popular school zone,” Ms Bakos said.
Real Estate Institute of Victoria vice president Adam Docking said it was a simple matter of arithmetic.
“The gap between top and bottom closes when there’s a percentage drop,” Mr Docking said.
“Generally we find that the inner ring always leads the charge, good, bad or otherwise.
“So this is a fantastic time to move when the market is not as buoyant as it has been, because your money buys more.”
Even those who don’t want to relocate will be able to upsize the family home in the same suburb for less than they would have a year ago — with a 6 per cent drop more significant in dollar terms for a $1.6 million home compared to one worth $800,000.