Most industry professionals expect days on market to either increase or stay the same, and the majority believe the next quarter is an ideal time to purchase a property, new data has revealed.
According to Real Estate Business’ inaugural Quarterly Sentiment Survey, 44.7 per cent of the 358 respondents said the days on market number in their area was likely to rise in the fourth quarter of this year, while another 38.8 per cent said it would remain steady.
According to RP Data, median time on market for September in Australian capital cities ranged from 43 days for units in Sydney through to 77 days for houses in Darwin.
The days on market measurement is a “misunderstood and misused” statistic, according to Brett Hunter, principal at Raine & Horne Terrigal-Avoca Beach, on the NSW Central Coast. He said it was impossible to compare days on market statistics between different suburbs and towns, as buyer behavior and lifestyle factors often varied considerably.
“It’s also highly linked to the method of sale,” Mr Hunter said.
He said auctions remained the best way to move property quickly, usually within a six-week period. But he didn’t think auctions, which made up around 25 per cent of the sales within his region, would ever take over as the dominant selling method in the future due to vendor preferences for private treaty and a lack of agents who had the confidence and skill to undertake the auction process.
This correlated with the survey’s findings, with the majority of respondents, or 76.3 per cent, saying private treaty would remain the most effective selling strategy over the coming quarter.
Regardless of the method used, it was critical agents had regular and honest communication with vendors, as this could help sellers better understand the realities of the market and, in turn, help push down days on market numbers, Mr Hunter added.
James Wardrop, franchise and training manager at Victoria-based Stockdale & Leggo, agreed. He said agents in his group were spending more time in vendor meetings, ensuring the agent had a clear idea of whether the seller was serious about selling their property.
Agents were also focusing on giving sellers a clearer idea of what similar houses were selling for in their area, which was a much better price guide than ‘prices’ taken from current listings.
“Vendors focus on what’s on the market,” he said, rather than what people are actually paying for houses.
While days on market looks set to rise in some areas, most respondents believe property sales will either increase (35.5 per cent) or stay at current levels (39.9 per cent) in the coming quarter.
Mr Wardrop wasn't as sure. He said an interest rate cut would be required if property sales were likely to improve in the coming months. “We need a bit of fuel,” he said.
A resounding 87.2 per cent said the property market would be good value in the final three months of this year, with most (61.7 per cent) confident house prices will remain stagnant in the same period.
The Real Estate Business Quarterly Sentiment Survey is an online-based survey. The results to the latest survey were based on 358 replies, with the majority of respondents coming from the residential sales and property management sectors (86.6 per cent). More than half were principals (54.8 per cent) and licensees (11.8 per cent), and another 22.8 per cent were sales representatives.
Responses were received in the first half of October.