AUSTRALIA (Commonwealth Union)_Even in a sinking market, potential house buyers researching their alternatives would be better served by checking at sales prices rather than price recommendations, buyers’ brokers say.
Despite the fact that fewer houses are selling for hundreds of thousands of dollars above reserve now than during the boom, some sought-after family homes are defying the downturn and shocking underbidders.
Separately, underquoting persists even when prices fall, since agents present an excessively low price guidance to entice buyers. Home buyers may look at asking prices and believe they have a chance, only to be defeated by the first bid at auction. “The sooner purchasers stop utilising the recommendations and stop deceiving themselves, the better,” said Michelle May of the eponymous buyer’s agency. “Buyer beware – and this begins the moment a property is listed.”
According to Domain data, median house prices in Sydney have decreased 8.3 percent from their high, 6% in Melbourne, 4.3% in Brisbane, and 1.5% in Perth, as rising loan rates strain home buyer budgets. However, the decline is uneven, and buyers may be startled to hear that not all homes are becoming less expensive.
A-grade quality residences in the inner suburbs still have a market and can draw six or more bidders at auction, according to May, although less desirable homes or apartments with unrealistic vendors may wind up selling for less than their reserve price.
She advises buyers to look at recent sales outcomes within their budget and preferred location in the sold section of real estate portals. Sign up for every agent’s database in the region to obtain their auction results, she advised, and while comparing results, consider the land size, degree of finish, and street.
Rich Harvey, CEO of propertybuyer.com.au, said a lack of listings in the late spring selling season has increased competition for the top quality homes. He encourages a potential buyer commencing their hunt to attend 10 to 20 auctions over a few months, then track the asking price and the sale price on a spreadsheet. Examine the comparable sales provided by the realtor and determine whether they are inferior, superior, or a fair comparison, keeping in mind the aspect, structure, floor plan, quality, and features, he said.
“The lower end of the market, including what we call B-, C-, and D-grade properties on busy roads,” he continued, “are absolutely going for well below what they were at the top.” He further noted that “Quality, well-located, well-presented” properties are still experiencing high demand and some agents are still underquoting, which is “a major issue”.