The belief that property prices will perpetually rise is a common narrative in Australia’s real estate market. However, as we observe changes in suburban areas like Oakleigh and Glen Iris, it’s becoming evident that the market is more complex than the myths suggest. This blog delves into the current property prices, stock availability and the reality of affordability in these sought-after Melbourne suburbs.

Oakleigh: A Snapshot of the Market

With its vibrant Greek community and proximity to the city, Oakleigh has become an attractive suburb for families and young professionals. The property market here is reflective of its desirability, with prices for both houses and apartments showing significant growth over recent years.

- New Houses: The median price for a new home in Oakleigh ranges from $1.4 million to $1.6 million, depending on the size and location. The demand for houses remains strong, but the stock is limited, which continues to drive prices up. This scarcity makes it challenging for buyers, particularly those looking for family homes.

- New Apartments: New apartments in Oakleigh are priced between $510,000 and $900,000. While this is significantly cheaper than houses, the gap is narrowing as apartment prices rise. The availability of apartments is better than that of houses, but the demand is equally high, making competition fierce.

Cornus Oakleigh

Glen Iris: The High-End Market

Glen Iris, known for its leafy streets and prestigious schools, represents the higher end of the Melbourne property market. It’s a suburb that attracts affluent buyers and this is reflected in its property prices.

- New Houses: In Glen Iris, new houses can start from $1.4 million and easily go beyond $2.6 million, especially for larger properties with extensive land. The availability of new homes is low, as much of the suburb is already well-established and new developments are limited to smaller parcels of land or luxury townhouses.

- New Apartments: Apartments in Glen Iris are priced from $630,000 to $1.3 million. The higher end of this range includes boutique developments with premium finishes and amenities. Similar to Oakleigh, the availability of apartments is better than houses, but the prices reflect the suburb’s status as a premium location.

Burke Hill, Glen Iris

Buyer Expectations vs. Market Reality

In both Oakleigh and Glen Iris, buyer expectations are being challenged by the reality of the market. Many buyers, particularly first-time purchasers, are finding that even apartments in these suburbs are pushing their financial limits. The price gap between apartments and houses, though still significant, is narrowing and the affordability crisis is becoming more apparent.

Potential buyers who dream of owning a home in these desirable suburbs are often forced to reconsider their options. For example, a young family hoping to buy a house in Glen Iris might find that their borrowing capacity only allows them to purchase a smaller apartment or they may need to look further afield for a house within their budget.

The Affordability Challenge

The high property prices in Oakleigh and Glen Iris are compounded by the broader issue of borrowing capacity. With rising interest rates and more stringent lending criteria, the amount that buyers can borrow has decreased, making it even more difficult to afford properties in these suburbs.

For instance, a professional couple with a combined income may find that they are approved for a loan of $1.2 million. In Oakleigh, this might afford them a two-bedroom apartment but would fall short of a house. In Glen Iris, their options would be even more limited, with the possibility of securing only a smaller apartment in a less desirable location within the suburb.

This situation is creating a growing divide between the market's expectations and what buyers can realistically afford. The perception that property prices will always increase is being challenged by the fact that many potential buyers are now priced out of the areas they aspire to live in.

Navigating the Suburban Property Market

The myth that property prices in suburbs like Oakleigh and Glen Iris will continue to rise indefinitely is being questioned as the market shows signs of reaching a peak. However, the high prices, combined with reduced borrowing capacity, have made it increasingly difficult for many to enter the market.

For buyers, this means adjusting their expectations, perhaps considering apartments over houses, or looking at alternative suburbs where their budget stretches further. For those set on living in Oakleigh or Glen Iris, it may require waiting for more favourable market conditions or finding creative financing solutions.

As the market evolves, it’s important for both buyers and developers to recognise these shifts and adapt accordingly. By dispelling the myth of ever-rising property prices and acknowledging the challenges of affordability, we can better navigate the current property landscape and make informed decisions for the future.