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A new research highlighted the challenges of selling property in Australia, with a significant number of properties fetching sale prices below seller expectations.
Property transaction platform Openn analysed February sale prices across six states and compared them to the expected sale price range, which was determined through a computer-generated price estimate that utilises an algorithm to simulate the work of a professional valuer. These figures were then compared to the agent-advised sale price.
Findings revealed that only 33 per cent of the residential properties were sold for a price within 10 per cent of the model price estimate.
A further look into the data unearthed varying trends across each state.
In Tasmania, the majority of sales (70 per cent) were below the expected price range, with only 29 per cent of properties selling within expectations and just 1 per cent selling above the anticipated range.
Meanwhile, in South Australia, 17 per cent of sales were above expectations, but almost half (47 per cent) of properties sold below their expected range, with 35 per cent transacted within the average expected price band.
In NSW, 57 per cent of properties sold below estimates, 33 per cent were completed within price expectations, and 10 per cent achieved sale figures that were above price expectations.
Similarly, in Victoria, 54 per cent of residential real estate deals fell below the expected range, while 36 per cent were recorded to be within the estimated threshold. Just 10 per cent of properties sold in the state were above the expected price range.
In Queensland, 60 per cent of sale transactions in February were categorised as selling below the estimated range, indicating gloomy selling conditions. Furthermore, 29 per cent were recorded to be sold within the estimated range, while 11 per cent were sold above the average estimates.
Western Australia saw relatively better results, with 51 per cent of the properties selling within the average model price estimate, while 14 per cent were sold above the estimated median price range. However, 36 per cent of properties sold within the state were still priced below their expected range.
Openn’s managing director, Peter Gibbons, said the figures indicate that sellers and buyers are not seeing eye to eye when it comes to prices.
“In most cases, we expect up to 45 per cent of sales to fall within 10 per cent of expected prices under normal market conditions. When we see a smaller percentage, it can highlight a disconnect between buyer demand and seller expectations,” he stated.
He concluded that the gap between sellers’ and buyers’ expectations may be due to agents utilising tools that are out of date with market conditions, as well as consumer demand.
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