Less than a fifth of properties have been sold for more than their original list price over the past quarter, according to new data from CoreLogic.
CoreLogic’s latest Property Pulse research has revealed that in the three months to October 2019, more than three-quarters (75.4 per cent) of properties that sold transacted for less than their original list price.
In contrast, over the same period, 7 per cent of properties sold for their originally listed price, while the remaining 17.6 per cent sold for more than the originally listed price.
According to CoreLogic, the data is in line with previous trends, noting that while the recent fall in property prices may be a cause of lower-than-expected transaction outcomes, such trends persist in boom periods.
However, CoreLogic added that since credit began tightening, the share of properties selling below their original value has risen.
“Over the past decade, even in periods where dwelling value growth was quite strong, the majority of properties sold nationally continued to sell for less than the original list price, highlighting that even during the boom times, vendors will need to be flexible on their price expectations and buyers will seek out room to negotiate,” the property research group noted.
“Since the middle of 2015, which is prior to value growth starting to slow but at a time where credit availability was tightening, and transaction volumes were starting to fall, the share of properties selling for less than the original list price has been trending higher.”
CoreLogic stated that the rising trend has been driven by Sydney and Melbourne markets “where buyers have endured a long period of low advertised stock levels, rapidly rising prices and intense FOMO (fear of missing out)”.
The research group continued: “As housing market conditions have weakened, buyers have more stock to choose from and far less urgency.
“[Buyers] are gaining more leverage, negotiating harder, and a growing proportion of vendors are selling at prices lower than their original advertised price.”
CoreLogic also noted that the trends are varied outside of Sydney and Melbourne, with the proportion of properties selling below the original list price “holding reasonably firm”.
The property research analyst said that Hobart, where housing market conditions have been strong relative to the other cities, is the exception, with an ongoing reduction in the proportion of properties selling below the original list price.
The research found that across the combined capital cities, 73.6 per cent of properties sold for less than their list price over the past three months, compared to 21.5 per cent that sold for more than their list price.
Conversely, according to the data, fewer properties were sold above their original transaction price across Australia’s regional markets, where 78.9 per cent sold for less than their original list price and 13 per cent sold for more than the original list price.
CoreLogic’s research follows data released by the Australian Bureau of Statistics (ABS), which revealed that housing finance approvals have continued their downward trajectory, falling by 1 per cent in September.
The value of housing approvals also dropped, slipping by 3.8 per cent, again driven by a decline in the value of owner-occupied dwelling approvals, which fell by 4.2 per cent in September, while the value of investor approvals dropped by 2.8 per cent.
From Mortgage Business