Micro Markets: Why “How’s the market?” is never a straightforward question.
‘How’s the market?’ asks every man and his dog… Our answer usually goes one of two ways, if we want to move things right along the answer is simple, ‘Booming!’
If the person asking, is looking to understand where things are sitting within parameters that actually mean something to them and their property search, or the sale of their property, we pull up a chair…
Most people, particularly in the media, refer to the Melbourne real estate market as a whole, economists and statisticians love to do it! It gives us an incredibly general overview that doesn’t actually serve a whole lot of insight when it comes to individual property sales and searches.
SO, what are micro markets?
The real estate ’market’ is actually made up of lots of ‘micro markets’ which each operate at their own level. If you are buying or selling, it helps to be able to identify which micro market you’re in so you can get a better understanding of how your search or campaign is likely to run.
Micro markets can be broadly broken down into 3 types; property type, location and price range.
Property Type
These can then be split into; freestanding houses, attached houses, semi-detached, period homes, new builds, single level, multi-level, subdivided blocks, townhouses – new & old, villa units, high-density apartments, low-density apartments…. You get the gist.
Location
Beyond property type, you have geographical market environments to consider which greatly differ between inner-city Melbourne and fringe suburbs.
Price Range
Pricing also plays a huge role in micro market conditions, just look at what happened when government incentives were introduced for purchases sub $600k!
The conditions within each of these ‘micro markets’ can be incredibly different. We can all agree that a whopping result for a $4.5m freestanding period home on Richmond Hill should not be lumped in with stats for sales of 1-bedroom high rise apartments in Burwood purely because they were sold on the same weekend… they dilute each other’s specificity!
Yes, it can serve to be across auction clearance rates and Melbourne market conditions as a whole. But remember to dig a little deeper, this is going to put you in a much stronger position.
Until next time,
Sam
