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Motivated vendors are offering up increasingly larger discounts in order to sell, as competition amongst vendors rises for the attention of a smaller pool of buyers, the latest CoreLogic report has found.
Nationally, around 75 per cent of properties sold by private treaty over the three months to January 2019 sold for less than the original list price, highlighting how prevalent discounting is, CoreLogic’s latest Property Pulse has found.
CoreLogic research analyst Cameron Kusher said that the onset of weaker property market conditions is starting to show, with listing numbers rising to their highest levels since 2012.
“The widening gap between seller and buyer price expectations reflects the fact there are fewer active buyers in the market and, as a result, vendors that are serious about selling may need to make some sizeable price adjustments in order to sell.”
He said that over the past three months, the national median vendor discount was recorded at 5.7 per cent, which is the highest level since August 2012 and substantially larger than the 4.6 per cent median discount a year earlier.
Mr Kusher said that he expects the current situation to continue.
“With housing market conditions continuing to deteriorate, buyers thin on the ground and a high volume of stock listed for sale, it is reasonable to expect that over the coming months vendor discounting may increase further.”
He also said that sellers should pay extra heed to the fundamentals at this time.
“For vendors serious about selling, this data highlights the importance in setting realistic prices, marketing the property as effectively as possible and being willing to adjust prices to meet a market with far fewer buyers than have been active over recent years.”
Mr Kusher said that for the combined capital cities, the median discount is 6.3 per cent, which is the most significant discount since January 2009.
“In January 2018, discount levels were much less significant, at 4.7 per cent, which highlights just how quickly housing market conditions have deteriorated in 12 months, with discounting levels mirroring those seen during the financial crisis.”
He said that in the combined regional markets, the deterioration in selling conditions has not been as substantial.
“Discounting levels are currently recorded at 5.2 per cent compared to 4.5 per cent a year ago. The worsening in discounting reflects the fact that dwelling values have begun falling in regional markets over recent months.”
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