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Buying property in Melbourne requires understanding Victoria's specific processes, from calculating your borrowing capacity to navigating auctions and settlement procedures.
Melbourne's diverse property market offers everything from inner-city apartments in Collingwood to family homes in Caroline Springs, with prices ranging from $600,000 units to $1.4 million houses depending on location and property type. The purchase process involves multiple stages including pre-approval, property selection, making offers, legal contracts, inspections, and final settlement, with typical timelines spanning 30-90 days from contract signing to keys in hand.
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Melbourne property purchases typically require a 10% deposit, stamp duty costs, legal fees of $1,200-$2,500, and settlement periods of 30-90 days.
Buyers get a 3-business-day cooling-off period for private sales but not for auctions, making pre-approval and professional advice essential.
| Purchase Stage | Timeline | Key Requirements |
|---|---|---|
| Budget Assessment | Before searching | Calculate borrowing capacity using lender calculators |
| Property Search | 2-12 weeks | Research suburbs, attend inspections, engage buyer's agent |
| Making Offer | 1-7 days | Written offer through agent, holding deposit required |
| Contract Exchange | 1-3 days | Legal review, 10% deposit, 3-day cooling-off period |
| Due Diligence | 7-14 days | Building/pest inspections, finance approval |
| Settlement | 30-90 days | Final funds transfer, title change, key handover |
How do I figure out my budget and borrowing capacity before starting?
Calculate your borrowing capacity using online calculators from major lenders like CommBank, ANZ, or Westpac before you start property hunting.
Start by gathering your financial information including gross annual income, monthly expenses, existing debts, and credit card limits. Input these details into home loan calculators from banks like CommBank, ING, or BOQ to get an estimate of your borrowing power.
Factor in additional costs beyond the property price when setting your budget. You'll need to account for a 10% deposit, stamp duty (which varies by property value), legal fees of $1,200-$2,500, loan establishment costs of $300-$800, building and pest inspections costing $400-$800, and ongoing mortgage repayments. As of September 2025, stamp duty for a $800,000 property in Victoria is approximately $40,070 for non-first home buyers.
Consider pre-approval from your lender to strengthen your position when making offers. Pre-approval gives you a conditional loan commitment for a specific amount, typically valid for 3-6 months, and shows sellers you're a serious buyer with confirmed finance.
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What types of properties are available in Melbourne and which suburbs fit my lifestyle and budget?
Melbourne offers four main property types: detached houses, townhouses, apartments, and units, with prices varying significantly across different suburbs.
| Suburb | Median House Price | Lifestyle Profile |
|---|---|---|
| Collingwood | $1.4M (Units: $650K) | Trendy inner-city, vibrant nightlife, cultural attractions |
| Caroline Springs | $680K | Family-friendly, modern facilities, spacious properties |
| Altona | $1M (Units: $600K) | Beachside lifestyle, relaxed atmosphere, coastal access |
| Melton | $580K | Most affordable option, large blocks, growing infrastructure |
| Frankston South | $1M | Suburban coastal living, strong growth potential |
| Broadmeadows | $650K | Affordable outer north, transport links, family-oriented |
How do I find a reliable buyer's agent, real estate agent, or do inspections myself?
Look for fully licensed buyer's agents registered with Consumer Affairs Victoria who have at least 10 years of experience and membership with REIV or REBAA.
Check the agent's credentials by verifying their license on the Consumer Affairs Victoria website and reviewing their track record of successful purchases in your target areas. Ask for references from recent clients and ensure they have professional indemnity insurance. Experienced buyer's agents typically charge 1.5-3% of the purchase price but can save you money through better negotiation and market knowledge.
If you choose to inspect properties yourself, attend multiple open inspections with a comprehensive checklist covering structural elements, plumbing, electrical systems, and neighborhood factors. Take photos and notes during each inspection, and consider bringing a knowledgeable friend or family member for a second opinion.
For selling agents, research their recent sales in your target suburbs and their average days on market. Strong agents will have local market knowledge, professional marketing materials, and transparent communication about the property's condition and comparable sales.
What's involved in making an offer on a property in Melbourne?
Submit written offers through the selling agent, either unconditionally or with specific conditions like finance approval or satisfactory building inspections.
Your offer should be based on recent comparable sales in the area, the property's condition, and current market conditions. Include details such as the purchase price, proposed settlement date (typically 30-90 days), deposit amount (usually 10%), and any special conditions. Common conditions include "subject to finance approval within 14 days" or "subject to satisfactory building and pest inspection."
Prepare to pay a holding deposit of $1,000-$5,000 when your offer is accepted, which secures the property while contracts are prepared. This deposit is typically held by the selling agent's trust account and forms part of your total deposit at contract exchange.
Be prepared for negotiation, especially in a competitive market. Sellers may counter-offer with different terms, and you'll need to respond quickly. Having pre-approval and being flexible on settlement dates can make your offer more attractive to vendors.
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When do I need a solicitor or conveyancer, and what do they actually handle?
Engage a solicitor or conveyancer immediately after your offer is accepted to handle the legal aspects of your property purchase.
Your legal representative will review the contract of sale to identify any unusual conditions, easements, or restrictions that could affect your use of the property. They conduct title searches to verify the seller's ownership and check for any encumbrances like mortgages, liens, or covenants that could impact your ownership rights.
During the settlement process, your solicitor coordinates with your lender, the seller's legal representative, and relevant authorities to ensure all financial obligations are met and documents are properly executed. They calculate settlement adjustments for rates, utilities, and body corporate fees, ensuring you only pay for expenses from your settlement date forward.
Legal fees typically range from $1,200-$2,500 depending on the complexity of the transaction. Choose a conveyancer or solicitor experienced in Victorian property law and your specific area, as local knowledge can be valuable for identifying potential issues.
What happens at the contract stage and what is the "cooling-off period" in Victoria?
After offer acceptance, you'll sign a contract of sale and have a 3-business-day cooling-off period to withdraw from private sales without major penalties.
The contract of sale is a legally binding document that outlines all terms of the purchase including the price, settlement date, inclusions/exclusions, and any special conditions. You'll need to pay a 10% deposit upon signing, which is typically held in the agent's trust account until settlement.
Victoria's cooling-off period allows you to withdraw from the contract within 3 business days of signing for private sales, but you'll forfeit 0.2% of the purchase price as a penalty. This cooling-off right doesn't apply to auction purchases, inherited properties, or sales of commercial properties over $1.35 million.
Use the cooling-off period to conduct final due diligence including building inspections, strata searches for apartments, and final loan approval confirmation. If you discover significant issues during this time, you can withdraw without losing your full deposit, though you'll still pay the penalty fee.
How does the building and pest inspection process work here?
Arrange professional building and pest inspections within 7-10 days of contract signing, either as a contract condition or during the cooling-off period.
Building inspections cost $400-$600 and cover structural elements, plumbing, electrical systems, roofing, drainage, and safety issues like asbestos or lead paint in older properties. The inspector provides a detailed report highlighting any defects, safety concerns, or maintenance requirements that could affect the property's value or habitability.
Pest inspections, costing $250-$400, specifically check for termite activity, wood-boring insects, and fungal decay that could compromise the structure. Melbourne's climate makes properties susceptible to subterranean termites, particularly in areas with poor drainage or timber-to-ground contact.
If inspections reveal significant issues, you can use this information to renegotiate the purchase price, request repairs before settlement, or withdraw from the contract if you included appropriate conditions. Major structural problems or extensive termite damage could reduce a property's value by $20,000-$100,000 or more.
What are the typical upfront costs like stamp duty, legal fees, and deposits in Melbourne?
Melbourne property purchases involve several upfront costs totaling 5-8% of the purchase price beyond your deposit.
| Cost Type | Amount | When Paid |
|---|---|---|
| Deposit | 10% of purchase price | Contract signing |
| Stamp Duty | 3.5-5.5% of purchase price* | Before settlement |
| Legal/Conveyancing | $1,200-$2,500 | Before settlement |
| Building Inspection | $400-$600 | Within 7-10 days of contract |
| Pest Inspection | $250-$400 | With building inspection |
| Loan Establishment | $300-$800 | At settlement |
| Mortgage Insurance | 1-3% if deposit <20% | Added to loan amount |
*First home buyers may be eligible for stamp duty concessions or exemptions on properties up to $600,000-$750,000 depending on current government incentives.
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How do settlement timelines usually work and what happens on settlement day?
Settlement typically occurs 30-90 days after contract signing, with the exact date specified in your contract of sale.
Your solicitor coordinates settlement by preparing all necessary documents, calculating final amounts including adjustments for rates and utilities, and liaising with your lender to ensure funds are available. You'll need to organize property insurance to commence from settlement day and arrange utility connections in your name.
On settlement day, your lender transfers the loan funds to your solicitor, who combines this with your deposit and pays the balance to the seller's representative. The title is officially transferred to your name through Land Use Victoria, and all relevant authorities are notified of the ownership change.
You'll receive the keys and any relevant documents like warranties, building plans, or strata information from the selling agent, usually by 6 PM on settlement day. Your solicitor will provide you with a settlement statement showing all financial transactions and confirm that rates, water, and body corporate accounts are up to date.
What are the most common mistakes buyers make with auctions in Melbourne?
The biggest auction mistakes include bidding without finance pre-approval, not setting a firm budget limit, and failing to understand that there's no cooling-off period for auction purchases.
Many buyers get caught up in auction excitement and bid beyond their pre-determined limit, potentially overcommitting financially. Successful auction bidders must be prepared to sign contracts and pay a 10% deposit immediately, with unconditional finance approval already secured.
Another common error is not attending multiple auctions as practice before bidding on your desired property. Melbourne's auction system moves quickly, and inexperienced bidders can miss opportunities to bid strategically or may bid in increments that are too small to be competitive.
Failing to research comparable sales and the property's reserve price can also lead to either missing out on a property you could have won with a slightly higher bid, or paying significantly more than market value. Always inspect the property multiple times and have building inspections completed before auction day.
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What confusions often happen with strata properties, owners corporations, or apartment rules?
Buyers often underestimate ongoing owners corporation fees and special levies that can add $2,000-$8,000 annually to apartment ownership costs.
Common confusions include not understanding what's covered by owners corporation insurance versus what you need to insure personally, restrictions on renovations or pet ownership outlined in the body corporate rules, and your voting rights and obligations at annual general meetings.
Special levies for major building works like lift replacements, roof repairs, or facade upgrades can cost individual owners $10,000-$50,000 or more. Always request the last two years of meeting minutes, financial statements, and any planned major works schedules before purchasing.
Parking space ownership can also be confusing, as some apartments include parking in the title while others lease spaces separately. Storage areas, balconies, and exclusive use areas may have different ownership structures that affect your usage rights and maintenance responsibilities.
What pitfalls should I watch out for in contracts of sale, like special conditions or hidden clauses?
Carefully review vendor conditions that may disadvantage buyers, such as unusually short finance clauses, sunset clauses for off-the-plan purchases, or conditions allowing the vendor to withdraw for minimal penalties.
- Finance approval periods shorter than 14 days may not provide adequate time to secure loan approval
- Clauses requiring you to accept the property "as is" without recourse for hidden defects discovered after settlement
- Special conditions allowing the vendor to retain deposits if you can't settle, beyond standard contract terms
- Restrictions on your ability to rent the property or conduct business from the premises
- Easements or covenants that limit how you can use or modify the property
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Successfully purchasing property in Melbourne requires careful preparation, professional guidance, and understanding of Victoria's specific legal requirements.
From calculating your borrowing capacity to navigating settlement day, each step in the process has potential pitfalls that can be avoided with proper knowledge and expert assistance.
It's something we develop in our Australia property pack.