The eastern property market stopped rising through COVID-19. We can debate if it has just stagnated or whether it is falling, but there is no doubt the market has stopped rising.
There have been some exceptional sales throughout 2020 showing there is still good buyer demand in the market.
The key for property sellers is to price accurately relative to the current market conditions. It is worth noting that different segments of the market are performing better than others. Inner-city houses, particularly larger family homes have been nearly immune during COVID-19, whereas there seems to be an oversupply of apartments in many Melbourne suburbs.
In the booming markets of recent years, the market tended to rise as one. As market conditions become more unpredictable during COVID-19, the market is no longer performing in unison as one. To transact prudently, remember there are markets within markets. Apartments are underperforming houses. Conversely, luxury apartments with views that appeal to baby boomers are performing better than generic poorly constructed high-rise apartments on busy roads and/ or in suburbia.
When assessing the market’s performance at large, forget the reported auction clearance rate of 60% to 70%. That’s a very questionable number given so many failed auction campaigns go unreported.
The true auction clearance rate in Melbourne is closer to 30% than 70%.
Regardless of what you are selling, the best way to attract the market is to quote the market price. Genuine buyers will enquire, inspect, and offer on fairly priced properties. In many cases, quoting a fair price causes competitive bidding which leads to a high price for the vendor.
To ensure you price accurately, identify 3 comparable listings on market and 3 comparable sales. Don’t outsource this to the agent. Form your own view on the price of your property and then cross-reference that with your agent.
Many vendors will get stung in October by underquoting. The agent encourages a strategy of pricing below the market price to attract more buyers. The fault line in this strategy is a lot of stock will come on the market in October. Some vendors found the promised excess buyer competition as a result of underquoting won’t eventuate. The vendors had inadvertently cheapened their property in the eyes of the market.
If you are selling, a careful and critical assessment of how the market is performing in your area will ensure you price correctly and ultimately sell for more. The best sales results come after a competitive process. If you price accurately for the current market, you will have buyer competition at the desired price point.