The Boroondara and Stonnington property markets have shown significant resilience and are well-positioned for future growth despite recent challenges.
A key factor in this stability has been the moderation of interest rate increases towards the end of 2023. This has created a more favourable purchasing environment, encouraging buyers to return to the market. After a quiet year, the second half of 2023 saw a resurgence in property listings, continuing into the first quarter of 2024.
In Boroondara, the appeal of top-tier schools, attractive streets, and vast green spaces is complemented by lively shopping areas and excellent public transport. This mix drives demand, particularly for high-end properties in prestigious suburbs like Balwyn, Kew, and Hawthorn.
Stonnington has seen increased interest in properties with unique architectural features and abundant greenery. Prices have steadily risen, especially in sought-after neighborhoods like Toorak and South Yarra, where limited availability has fueled competition.
Younger buyers are increasingly drawn to homes that combine lifestyle amenities with Stonnington’s rich cultural scene.
The construction sector faces its own challenges. Although building costs are stabilizing, they still concern buyers, particularly those considering significant renovations or new builds. As a result, there is a growing preference for renovated and newly built properties, as buyers seek move-in-ready options.
Investors are continuing to leave the market, driven by factors such as land tax, higher holding costs, and stricter compliance laws. Despite this, Boroondara’s rental market remains strong, with high demand and low vacancy rates creating a favourable environment for remaining investors.
In Stonnington, there is an increase in investment-grade apartments and smaller homes. While demand for these properties is strong, there is also significant price sensitivity. Well-priced properties sell quickly, while those that are overpriced or have compromises can linger on the market. This trend has reduced the available rental stock, especially in inner-city areas like Prahran and South Yarra, leading to a supply-demand imbalance and strong rental growth.
Looking ahead, the region is expected to maintain its strong performance. Robust demand for quality homes, improved supply, and indications of decreasing global and local inflation are likely to support sustained buyer confidence and price growth into FY25.
