If ever there was a sign that the housing market bubble is bursting, it’s that home prices aren’t quite hitting the auction or advertised prices home owners want.
After seeing tremendous growth in value over the past few years, there’s a growing sign that the housing market is beginning to normalise, as the sale prices for houses fall below the original list price.
That’s the news coming from CoreLogic, which tracked property prices over the three months to October 2018, and found just over 75 per cent (75.4) were sold below their original list price, while 7 per cent sold at their originally listed price and just over 17 per cent (17.6) managed to sell for over.
Much of the discount is being driven in Australia’s largest cities, with what CoreLogic says can be attributed to weakened “housing market conditions” with more properties for buyers to choose from without as much urgency. That’s certainly the case in Sydney and Melbourne where conditions have allowed a majority of houses to be sold above list price from 2014 to 2016, though it’s not the same in every city.
Brisbane has apparently seen a growth in properties sold above list price, even if the numbers still sit below those sold below, while Hobart reports a spike, as just over 74 per cent (74.6) of Hobart properties sold have been higher than the original list price. Canberra is also seeing a fluctuation, though it’s one that shows 44.3 per cent of properties were sold above list price, while 41.4 per cent were lower.
“The data highlights the importance of setting an appropriate asking price on a listed property, and allowing some room for negotiation on the property transaction,” writes CoreLogic’s Cameron Kusher.
“Finding the right balance can be a fine art. Although the list price is often (not always) known a sale is a negotiation and as this data shows very few properties actually sell for the original list price. As a result most properties end up selling below their original list price except in very strong markets such as Sydney and Melbourne over recent years and Hobart currently.”