We again courageously offer our Melbourne Property Market Predictions for 2023, forecasting what we think will be the Property trends for the year ahead.
Using our experienced eyes to peer into the crystal ball, 2023 appears to be a rocky year but one with good opportunities for astute investors and property owners.
Our 2023 Melbourne Property Predictions
With interest rates going up and house prices heading in the opposite direction, it may prove a tougher year for extravagance; however, market conditions should open up to allow for clever ways to increase your portfolio or improve your living conditions.
The good news is that builders and building costs are normalising.
Rents seem to be heading upwards, which may offset higher interest rates for developers/investors as well as motivate people to buy rather than rent.
The recent decline in housing prices does not appear to be due to rising distress for borrowers but seems to reflect lower borrowing power as harsher lending criteria are applied to loan applications. Money simply costs more and is harder to get!
Countering this are the higher salaries available and better rental yields for landlords.
Our prediction is that despite media hype, most of the loss of value has already taken place and that after a shaky start to 2023, increased demand due to immigration will steady values.
We say immigration, usually referring to student or migrant worker influx, but in this case, we can imagine that there will also be an influx of upper-end property seekers either “coming home” or migrating “down under” for a better lifestyle post-COVID.
Whether it’s the disillusioned “Hong Kong millionaire” or the “Londoner” that feels they need space, Melbourne offers an Australian Lifestyle “OzChange” but with the cultural experience of Europe or Asia.
Other upward forces will also help Melbourne “land softly”. Besides the expected immigration, massive infrastructure projects will add the value that has traditionally followed such urban upgrades. Roads, rail, parks, schools and hospitals have been added at unprecedented levels Melbourne-wide. This has traditionally paid off in spades for those communities, and in Melbourne’s case, a wide range of communities will benefit. This infrastructure expansion almost always translates to increased values.
So unless “mortgage stress” explodes out of control, our prediction is a correction rather than a crash despite what happens elsewhere in the world; in fact, a soft landing here may well be due to harsher conditions elsewhere as Melbourne offers that “safe haven destination” like not many can and those that can afford it can relocate using their “pound” or “euro” to purchase valuable properties.
How Can You Benefit in This Economic Climate?
This depends on your particular circumstances.
How Can I Improve My Current Living Conditions?
If you own a house that has seen better days, now may not be the time for an extravagant, high-end “knock down and rebuild” unless you are clever with how you go about it. Our blog “The Smarter Way to Knock Down & Rebuild” is worth a read, offering advice on how you can create your new home at a little monetary cost, having your cake and eating it too.
Our two-family home project currently under construction in Murrumbeena is a fantastic example of how we helped a lovely client realise their dreams despite not really being able to afford to do so. We helped make it happen for this family, and they are about to move into their dream.
A smaller but well-designed extension and renovation may be a better choice for you than the extravagant rebuild. Contact us for expert advice on what is possible for your home on your budget. Our aim will be to help you with a cost-effective upgrade which improves your home and lifestyle.
We were careful not to adversely affect the heritage value of this bungalow. In the end, we boldly opted for a high-end upper extension solution that complements the architecture. Most agree we have only added to this charming façade.
How Can I Make Money in a Down-Turning Property Market?
A good side hustle in any market is property development! Astute developers see softening conditions as a real opportunity to purchase development sites and develop their property more cost-effectively than in a boom. In fact, a boom is the worst time for investors to buy. Now, you can wisely and calmly purchase without the hype of boomtime auctions. Builder’s prices are normalising, which offers stability and confidence. If you can navigate the harsher lending criteria and higher interest rates, now is a really good time to set yourself up for the next boom.
Our 7-Star, 4-unit joint venture development on the rail line in Fairfield is an example of how you can increase your equity and enjoy extra high rental yields.
With increasing immigration and higher yield rentals, most likely in 2024, a wise developer will foresee these conditions and the riches this can offer. We can help you develop whilst you “keep your day job” as a safe way to develop as a “side hustle”, utilising our expertise to navigate the complicated development process step by step whilst you continue to earn your salary. Contact us to discuss this further.
A simple “Duplex Development” is a good way to get started whilst making very good money for first-time developers. Sell one, keep one and have very little left on the mortgage. Keep them both, as rising rental yields will take the pressure off!
Below is our duplex two-family home design in Chelsea. Very close to parklands and a short walk from the beach. Government removal of level crossings will effectively make it even closer to the beach as the walk is now reduced to a straight line through what is now an urban reserve under the railway. Purchasing sites that should increase in value due to infrastructure upgrades once the “smoke clears” and then, in turn, “turbocharging” them by developing is an astute way to profit from the next boom.
House Design and Development Services Melbourne
House Design Solutions has been offering Melbournians advice on Design and Development for over 30 years. We can help you develop your home or property wisely. Join the long list of satisfied clients who have benefited from our personalised service. Check out for yourself what our clients are saying on Google and Facebook, or visit our testimonials page.