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Practical and effective advice to get the right property for the right price in Melbourne's property market.
There is a moment at every Melbourne auction, usually just before the auctioneer calls for the first bid, where your chest tightens and your carefully prepared budget starts to feel negotiable. You have spent weeks on this property. You know it is the right one. And that certainty, the very thing that got you here, is exactly what is about to work against you.
It is called escalation of commitment. And it is the reason most buyers overpay, or miss out altogether, not because they failed to do their research, but because the psychology of a Melbourne auction is unlike anything most people are prepared for.
Sven Fischer from Cottage and Castle Buyers Agents knows this better than most. He spent fourteen years as a selling agent in Melbourne before making the switch to representing buyers, with a stint in between at a proptech startup focused on scope 3 emissions and residential energy efficiency reporting. That unusual combination of sell-side experience, sustainability knowledge, and deep respect for the buying process makes him one of the more interesting people working in Melbourne real estate right now.
I sat down with Sven on the House of Meaning podcast to talk about what it really means to buy well in Melbourne.
Most buyers walk into a Melbourne auction knowing the golden rule: set your budget and stick to it. What Sven points out is that this advice, while correct, is almost useless without understanding why it is so hard to follow.
The moment you make your first bid, something shifts. You have not signed a contract. You do not own the property. But in your head, you have. And the person next to you is not outbidding you. They are taking something away from you. That is the emotional contract Sven describes, and once you understand it, you start to see Melbourne auction dynamics very differently.
His practical tip is deceptively simple. When it is your turn to bid, count two or three Mississippi before you respond. Do it every time, consistently. It gives you a moment to breathe, signals authority to everyone in the crowd, and pulls the pace back to one you control rather than one the auctioneer is setting. Hesitation signals weakness. Steady and unhurried signals that you have been here before.
One of the more counterintuitive parts of our conversation concerns north-facing backyards. In Melbourne, buyers routinely pay a significant premium for north to the rear, and from a passive solar design perspective, that preference makes sense. Passive solar design relies on orienting living spaces to capture winter sun and minimise summer heat gain, and north to the rear gives you exactly that. Simon has said many times he would not buy a property without north to the rear unless there was a compelling reason.
But Sven makes a point worth sitting with. If you are buying a property you plan to renovate anyway, and manyof his clients are, then paying a substantial premium for north orientation may not be the smartest move. Some of the most creative passive solar design solutions we have produced at Sustainable Homes Melbourne have come from south-facing sites, where the constraint pushed the design toward internal courtyards, clever light design, and thermal mass strategies that a straightforward north-facing block would never have demanded. Save the premium on purchase. Invest it in the building fabric and the design.
When working with a buyers advocate who understands passive solar design and energy efficiency, you can assess the true renovation potential of a property before committing to the premium.
This is where the conversation got uncomfortable, in the best way.
The vast majority of Australia's eleven million homes were built before any energy efficiency standards existed. They have no meaningful insulation. In Melbourne, where temperatures drop toward zero in winter and climb past forty in summer, most people are living in homes with almost no thermal comfort or thermal protection. Double glazing is still treated as a luxury upgrade rather than a baseline requirement. And here is the statistic that stopped us in our tracks: Australia has more deaths from cold per capita than Sweden. Sweden, where subzero winters are routine and double glazing has been mandatory since the 1970s.
Sven grew up in Germany, where an energy passport is mandatory at every point of sale. You cannot enter into a legally binding sale contract without a disclosure document that outlines the home's thermal performance, running costs, and the energy efficiency improvements made to it. In Victoria, NatHERS energy ratings are almost never provided to buyers, not even with new builds. The average Australian home sits below two stars. Most buyers have no idea what they are buying until the first winter.
The real estate industry in Melbourne, Sven observes, is almost entirely numbers-driven: bedrooms, bathrooms, land size, sale price. The performance of the building fabric, the insulation, the windows, the airtightness, rarely comes up. And when you consider that a home is the most significant financial decision most people will ever make, that is a structural problem worth naming.
The encouraging counterpoint: buyers who renovate to a standard even modestly above the minimum are starting to see a market premium. One home in Stonnington built to near eight NatHERS stars sold for five million dollars on a 500 square metre block, a record in that pocket that still stands. The challenge is not building a high-performance, energy-efficient home in Melbourne. It is knowing how to communicate what is behind the walls.
We always close the House of Meaning podcast by asking guests about the home that has meant the most to them. Sven did not hesitate. It was his parents' home in a small German town called Wessum, population two and a half thousand, where the whole neighbourhood seemed to know when school holidays had started.
Behind the house was a soccer pitch. Every school holiday, twenty, thirty, sometimes forty kids would spill out from the surrounding streets and play until dark. Just jump the fence and go.
"I haven't seen anything like that since," he said.
It is a useful reminder of what a good home actually is. Not a NatHERS star rating. Not a returns forecast. When we asked Sven directly for his definition, he gave one we think about: a home that does what you need it to do and makes you feel good while it is doing it.
That is a brief we would be proud to build to.
To listen to the full conversation with Sven Fischer from Cottage and Castle, find House of Meaning wherever you get your podcasts.
If you would like to know more about building or renovating a sustainable home in Melbourne, please reach out to Sustainable Homes Melbourne or call us on 1800 683 697.
