Nearly one in five vendors in Sydney’s northern beaches slashed their asking prices half-way through the marketing campaign, by around 7.4 per cent, or $203,315, on average off the median house price during November, as listings soared and affordability hit buyers’ budgets.
Analysis by Domain also showed that sellers in the premium suburbs and inner-city areas led the pack in discounting their properties as the market started to shift in favour of buyers.
More than one in seven vendors in Sydney’s eastern suburbs have reduced their asking prices by around 7.6 per cent on average or $273,600 off the median price, and a similar proportion in the inner west chopped their asking prices by 5.2 per cent on average.
Asking prices in around one in eight listings in North Sydney and Hornsby, and in Melbourne’s inner south were also revised down by up to 6.1 per cent.
“The areas seeing the largest proportion of listings with asking prices being reduced have recorded the highest price increases in the past 12 to 18 months,” said Nicola Powell, Domain’s chief of research and economics.
“These premium markets in Sydney and Melbourne have led the upswing and seen exceptional growth through the housing boom, and they are much further along the price cycle.
“So this is a real indication of where we are in the price cycle because the premium end is now slowing.”
The northern beaches notched up some of the largest gains in house prices in the past 12 months, soaring by 46.1 per cent, while the eastern suburbs grew by 27.4 per cent.
Buyers can now take their time
More than one in 10 vendors in Sydney’s Ryde, inner south-west and Sutherland have reduced their asking prices and a similar proportion of vendors in Melbourne’s outer east have also lowered their expectations.
Dr Powell said more vendors were likely to cut their asking prices to get a sale.
“Listings have gone up substantially in recent weeks, which means buyers can now take their time as they have more options and no longer have to battle it out,” she said.
“It made buyers more wary about overpaying, so I think sellers have to be more realistic to meet that expectation on pricing.”
The number of listings under 30 days had jumped 76 per cent in the northern beaches and by 74 per cent in the eastern suburbs since August, data from SQM Research shows.
Meanwhile, stock levels had more than doubled (108 per cent) in the inner-west and soared 158 per cent in the inner south-west during the same period.
Sydney-based auctioneer Clarence White said it was becoming harder to get properties across the line at auctions amid higher listings and fewer bidders.
“It’s challenging out there at the moment because there’s so much stock,” he said.
“A lot of vendors are choosing to sell before auction and more properties are getting passed in.
“I would say probably eight out of 10 vendors have reduced their reserves in the last four to five weeks to get their property sold.”
Realistic price guide
Mr White said realistic price guides were important to achieving a sale in today’s slower market.
“I think the price guide has to reflect the buyer’s expectation and be justified by comparable sales,” he said.
“It’s designed to generate interest, so if you’re realistic with your price guide, you’re more likely to attract buyers. Whereas if you quote too high, nobody will come and look at your property.”
Buyer’s agent and principal of HighSpec Properties Amanda Gould said more markets were becoming favourable for buyers.
“There’s certainly more opportunity to get a good deal, particularly this side of Christmas, as some vendors worry about what might happen next year and just want to sell now,” she said.
“We’ve been able to get our clients properties that are significantly cheaper compared to the peak and well within their budgets.”
Jack Henderson, founder of buyer’s agency Henderson Advocacy, said a deluge of new listings and fewer active buyers have also enabled them to nab a good deal for their clients.
“There are definitely better buys nowadays,” he said. “We bought a three-bedroom apartment on Military Road in Dover Heights just two weeks ago for $950,000.
“This property would have easily sold for $1.3 million just two months ago, but the market has shifted, and we were the only buyers.”
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/vendors-slash-prices-as-listings-soar-20211220-p59iwt