As is now becoming more obvious, property prices in Melbourne are down. Probably by more than most people realise, as the published figures lag behind the current reality. As an indication of how serious the impact has been, properties are now regularly selling for either within their quoted range (shock, horror), or passing in. Last week, a home in Burwood East with a quoted range of $990,000 to $1,080,000 sold at auction for $990,000. This is almost unheard of in recent years.
Two significant factors have caused this: the big fines for Underquoting & a correcting (falling) market. The alternative is for owners to hold out for yesterday’s prices. Not a particularly good plan. Whilst the official clearance rate last week was 61%, in the 5 closest suburbs to our office in Burwood, it was 31%. A staggering 69% of auctions failed. So the owners are left with a huge disappointment and a large advertising bill.
For owners, a much more sensible approach is to make a decision that they are going to sell for the highest possible price in today’s market. Forget yesterday and nobody knows what will happen tomorrow. Price their property for today and don’t be tempted to price it too high for fear of “underselling” it. Buyers will decide what they are willing to pay and if the price is attractive, competition will push the price up anyway. The best way to achieve this is by a private or “silent” auction. Importantly, there is an important principle that if you price a property too high, it will likely sell for less (after it sits and sits). Likewise, the lower the price (within reason – no underquoting), the higher the selling price.
And buyers? If you find the property you like and it is sensibly priced, don’t wait for it to fall further. There is a good chance you’ll miss it altogether. Prices can turn remarkably quickly. A well priced property will sell. In any market. Low offers or over-priced properties simply result in NO SALE. Not much help to anyone.