More property sellers across Australia are marking down their listing prices amid a COVID-19 impacted market, new research from Domain showed.
But while price cutting has become more widespread, the degree of discount across all cities has generally reduced from the levels seen in 2019, bar Perth where it remained the same, according to Domain’s senior research analyst Nicola Powell.
“This suggests a broader market slowdown with more properties discounted by marginal amounts rather than hefty discounts on fewer homes,” she said.
Price cutting the most common in Sydney
Sydney vendors took the lead nationally with discounting in July, with prices revised down for about one in seven property listings in the harbour city. This is nearly triple the figure in the same month last year.
Asking prices were axed in 16 per cent or more of listings across:
- The northern beaches (17.3 per cent);
- Canterbury-Bankstown (17 per cent);
- The upper and lower north shore (16.9 per cent and 16.4 per cent);
- The city and eastern suburbs (16.2 per cent); and
- Wollongong (16 per cent).
The median price discount for live listings in Sydney was -4.3 per cent in July, slightly down from -4.7 per cent in the same time last year.
Yet areas in the city have seen the biggest jump in sale discounting nationally since the coronavirus hit Australia. The lower north shore had 16.4 per cent of its listings’ asking prices revised down in July, up by 7 percentage points since February. Vendors in the city and east marked down prices in 16.2 per cent of listings, up by 6.1 per cent since February.
Melbourne takes a blow from COVID-19
Discounting was the second most prevalent in Melbourne, where asking prices on about one in nine properties were cut throughout July — almost four times more common than July 2019.
At least 12 per cent of listings saw prices reduced in:
- Melbourne’s inner south (13.5 per cent);
- Melbourne’s outer east (12.6 per cent);
- Inner Melbourne (12.5 per cent);
- Mornington Peninsula (12.5 per cent); and
- Melbourne’s inner east (12 per cent).
Asking prices were discounted by a median of -4 per cent across Melbourne, shrinking from 4.2 per cent in July 2019.
Dr Powell said Melbourne has felt the shock of the economic downturn more than other cities, as it:
- has been more affected by pandemic-related job losses;
- is more exposed to overseas migration; and
- has more investment activity.
“A rapid rise of discounting rates in Melbourne is anticipated considering that to date, Melbourne has recorded the steepest falls in median prices compared to the other cities,” Dr Powell said.
Is this a good time to buy a property?
Australia is still riding out a global pandemic and a recession, but that doesn’t mean it’s a good or bad time to buy a home, depending on your financial situation.
For some buyers, it might be an opportune time to purchase a property, considering that real estate prices are falling in general, and you might have a better chance of nabbing a discount from property sellers. Record-low interest rates in the home loan market may also help you get closer to buying a property, with some advertised rates in the 2 per cent and even 1 per cent bracket.
But if you don’t have a stable income, or if your deposit isn’t over the 20 per cent mark yet, it may not be the best time for you to enter the property market. Buying a property is a major financial commitment, and it’s important that you do your research to ensure you can afford it before shopping for a home. All things considered, it could be a good idea to speak to a financial adviser or a mortgage broker for professional advice if you’re considering a property purchase in the near future.