Asking Prices

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Apartment vendors across the major capital cities have been securing close to their asking prices, according to CoreLogic

The latest data shows that Canberra is the apartment market where vendors do not need to discount their asking prices by that much.

The median required discount in Canberra is 1.7 percent.

Across the other capital cities there is a prospect that apartment vendors require to adjust their asking prices by between 2.2 percent to 2.6 percent in order to secure a sale.

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Hobart is the fastest selling city for both apartments and houses.

<img alt="" height="458" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/cl_2021_apt_vendors.jpg" width="643">

House vendors are a little more ambitious in their asking prices with the required discount needing to be offered to buyers sitting in the range of 2.2 percent to 3 percent.
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Apartment vendors across the major capital cities have been securing close to their asking prices, according to CoreLogic

jchancellor

Apartment vendors selling at close to asking prices: CoreLogic

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EXPERT OBSERVER
<div>New listings fell in March according to SQM Research as more potential vendors decided not to list.</div>
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<div>However, total listings had already begun to increase (+3.7 per cent) as more 30-60 day stock banked up, having failed to sell. </div>
<img src="https://1.bp.blogspot.com/-d2CQt-N3jio/XowhwDv7zpI/AAAAAAAA1IM/83eJ9Qa8bz0i2eCpwC4KlueT4ghuvHaLgCNcBGAsYHQ/s640/SQM1.jpg" width="640" height="388" data-original-height="830" data-original-width="1368">
 
From a year ago total property listings remained -13 per cent lower than year earlier, mainly due to Sydney where listings were still -23 per cent below March 2019 levels, with Hobart also down -19 per cent year-on-year.
<div><img src="https://1.bp.blogspot.com/-LrJvfUcx3w0/XowhwMrVFKI/AAAAAAAA1IQ/2u2tYMooKcsELebZ2QC6lyCKmpIAn6IGwCNcBGAsYHQ/s640/SQm2.jpg" width="640" height="388" data-original-height="827" data-original-width="1359"></div>
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<div>SQM reported that asking prices increased further in March, driven by increases in Sydney, Melbourne, and Perth, suggesting that vendors have not yet adjusted their price expectations, despite the effective shutdown of the economy.</div>
PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.
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pwargent-M4siyDbqQY

New listings and sales are falling but asking prices rose in March: Pete Wargent

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<div>The days of the successful greedy vendor are almost done.</div>
The five year surge in Sydney prices is now coming off, as the Reserve Bank wished.
The biggest gap I've seen between asking price and selling price was over 20 percent. They wanted $27 million and took $21 million in Sydney's pricey east.
Long after the ambitious public asking prices, the more sombre secret sales outcome becomes known.
Any neighbours up the street thinking of selling are then forced to come back in expectation. The new pricing mood becomes contagious.
There is nothing too distressing around pricing really for most sellers, although the emerging slowdown captures almost all, even thoughtful asking prices.
South Sydney Rabbitohs star George Burgess recently made a mild adjustment to the price hopes of his <a href="https://www.realestate.com.au/property-house-nsw-chifley-126771326" target="_blank">Chifley offering</a> (above and below).
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/3/19/chifley2.jpg" alt="">
Having initially sought $1.8 million, there's now guidance between $1,725,000 to $1,775,000, with Burgess and wife Joanne expecting a second child in August.
But first home buyers should pay extra careful attention to market conditions, not just the incentives on offer.
While the price declines may be minor, first home buyers ought be wary of over paying and potentially going straight into negative equity.
The weekend auction success rates that kicked off unexpectedly well with 70 percent selling, have weakened in the pre-Easter auction period with the clearance rate back in the 50s.
The market does seems set to continue to deteriorate further.
Most analysts tip the decline will be moderate, somewhere in the order of five to 10 percent over the next two or so years.
They don't see any trigger such as high unemployment that would escalate into more substantial price falls across all markets.
Certainly unexpected quick rate rises - rather than possibly a few extended over years - could be devastating for many households. 
There are extreme calls such as the US forecaster Harry Dent who forecasts a halving in values.
But demand for property arising from population growth, arising both internally and from migration, is expected to provide a floor.
This article was first published in the Saturday Daily Telegraph.
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jchancellor-FAypfDUnLy

The Sydney property downturn starts with asking price mismatch

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The NSW Government has said it will spend another $400 million to make land for housing shovel-ready and $19 million to create a planning body to oversee a plan to build 664,000 homes in 15 years. 
This addition to the Housing Acceleration Fund adds to the $566 million invested since its inception in 2012 and suggests the State Government subscribes to the shortage theory. 
But there’s another perspective on dwelling supply in Sydney – one that points to looming oversupply because of an overbuilding of apartments, a syndrome that’s rapidly spreading to all the capital cities of Australia.
Dr Nigel Stapledon of the University of NSW is one of those who believes Sydney is building too many apartments. Stapledon’s views deserve respect as someone who has comprehensively researched real estate in Australia, including one vast assignment which examined prices and rents going back more than a century. 
In a recent report, Stapledon said Sydney is about to be hit by a wave of new units, resulting in falling prices and rents in 2016. 
Stapledon said 13,000 new units will hit the market in Sydney before the end of the year. And an average of 28,000 new units will be completed each year for the next three years. Stapledon said that figure is more than double the historical average – between 2005 and 2014 an average of 15,700 new units were completed each year. 
The increase in supply could result in prices falling "north of 10%" within the next nine months, he said. The first sign of the slowdown will be an increase in rental vacancies followed by lower rent prices and a decline in investor demand.
His views make sense to me as recent history around Australia has shown that the one factor that can cause prices to fall significantly is an oversupply of dwellings. We’ve seen it recently in Gladstone in Queensland, the Hunter region in NSW and Port Hedland in WA, where a major lift in supply has been the big factor is sending a former boom into reverse. We’ve seen it in the past in apartment markets, including the Gold Coast and Melbourne.
If Stapledon is right, Sydney will join Melbourne, Brisbane, Perth and Darwin as capital cities which already have, or will soon have, serious gluts of inner-city apartments.
It seems every research entity relevant to Melbourne real estate has joined me in warning about the overbuilding of inner-city units. But new projects keep on coming. 
The latest mega project is an application for six towers in Fishermans Bend, with 1,580 units in a $600 million development south of the West Gate Freeway. Meanwhile, a 600-unit project has been proposed for South Kingsville and VCAT has approved a 450-unit project at South Yarra.
Melbourne may be the population growth capital (Melbourne added 95,600 to its population in 2014, compared to Sydney’s 84,200) but there are limits to how many units are needed – and to how many can be flogged to Asian investors.
The issue with Melbourne’s unit over-kill is not just the number being built – it’s also the size of them. On 5 July, The Age reported that “units with not enough space for basic activities such as eating at a dinner table” are planned for a new CBD tower. The 250m tower at 280 Queen Street by Brady Group has been branded too tall and bulky by council planners, who also found many of its 589 units were under-sized. 
The planners’ report said: "Many of the units are too small to allow for basic daily activities and functions such as eating at a dining table, or having a dressing table in the bedroom whilst maintaining access to the wardrobe." 
Although there will be 46 three-bedroom units, the planners said most were less than 70m2 - the minimum size for a two-bedroom unit in Sydney. 
According to council research, many bedrooms in Melbourne's high-rises do not have natural light. There’s a growing trend towards small floor plans, with 40% of the city's units less than 50m2. 
For all the above reasons, Melbourne inner-city apartments are shaping as very bad investments. You have wonder about the mentality of the investors who are lining up to buy them. Research is clearly not part of their process.
And it looks like Sydney is heading down the same slippery slope to surplus.
TERRY RYDER is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a> 
Terry was recently joined by Property Observer editor at large Jonathan Chancellor for a webinar on why research is the key to successful property investing in 2015. You can download slides and audio from the webinar <a href="component/content/article?id=42796" target="_blank">here</a>.
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terryryder-YECXbqmri2

The slippery slope to Sydney and Melbourne apartment surplus: Terry Ryder

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Revelations by the AFR that Purplebricks agents pushed clients into cutting their asking prices to win a prize from the low commission estate agency are being referred to the NSW Office of Fair Trading by the REINSW.
Its agents had clients cut their asking prices by as much as 20 per cent to potentially win a $5000 cash prize offered by its co-founder Kenny Bruce.
The Real Estate Institute of NSW president Leanne Pilkington said the vendor discounting competition left her "horrified and speechless". 
"Estate agents are paid to act in their clients' best interests by law. How can this be in their best interests?" said Ms Pilkington.
"This is an awesome opportunity to get our customers homes realigned with the market place and make sure we get the job done for them," said the Puplebricks email to agents.
The email advised agents with stock that had been on the market for more than 30 days "needed to realign pricing the most".
The company, founded by brothers Michael and Kenny Bruce, initially threatened to go to court to get an injunction to prevent publication of the newpaper's story about its "NSW Raffle", but has since defended its practices as "entirely normal".
More than 100 NSW Purplebricks vendors cut their asking prices. A seller in Panania agreed to cut their asking price from $1.2 million to $1 million. A Condell Park vendor cut their price from $1.4 million to $1.2 million.
Among the requirements of the NSW Property, Stock and Business Agents Act 2002 (the Act) and the Property, Stock and Business Agents Regulation 2014 (the Regulation) is that an agent "must act in the client's best interests always, unless it would be contrary to the Act, the Regulation or otherwise unlawful to do so".
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However the heightened perception that Purplebricks's fixed-fee model is not working in Australia assisted in its UK share price tumbling to an 18-month low of £2.226
They peaked at £5.145 in August last year.
However Anthony Codling from broker Jefferies International pinpointed last week's decision by Purplebricks to halve the immediately payable upfront commission fee and the rest on settlement as a major catalyst for its share dip.
It also came as major UK estate agency Connells shut down its own hybrid agency Hatched because it was not "economically viable".
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j.ballantyne1990-6AQqhLzZaK

Purplebricks defends reduced asking price competition as working in vendors' interest

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SQM Research has recorded flat asking prices and rising stock levels across the country for the first quarter of 2014.
According to the research firm’s latest figures, the capital city average house asking price fell 1.6% over the March quarter, while unit prices stayed flat. Sydney asking prices for houses dipped by the same 1.6%, with units rising by just 0.2%, a result that may surprise some given the bullish outlook many commentators had for the city at the beginning of the year.
Adelaide was the quarter’s strongest capital city market, with house asking prices increasing by 0.9% and units climbing by 3.5%.
SQM Research managing director Louis Christopher noted that SQM’s findings for the quarter differ from those provided by RPData.
“This is all in contrast to the very bullish findings from the RP Data daily index, which among other things, reported a very sharp rise in Melbourne dwelling prices of 5% for the quarter and now has Sydney up over 15% for the year,” said Christopher.
“While that index may be meeting our forecasts this year of 15-20% rises for Sydney, SQM Research continues to remain dubious of it and strongly recommends for you to follow the ABS and APM versions of house price sold data, which will be reporting early next month based on a lot more sold data for the quarter gone by.”
The firm also reports a rise in stock on market for March, with a 1.8% increase over the month to 352,369 dwellings.
However, the national stock level was down 5.2% on a year-to-year basis, with Sydney’s stock on market down 17% from March 2013.
Darwin recorded the highest jump in stock on market from the previous year, with listed dwellings rising 12.8% from 1,221 in March 2013 to 1,335 last month. SQM Research noted that stock on market levels are particularly vulnerable to seasonal influence, making monthly fluctuations a less useful indicator of market conditions than year on year analysis.
The research company expects a fall in listings over the Easter holiday period.
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jrichardson-uRX5hFdKfN

Asking prices flat for March quarter: SQM Research

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Recently, 116 people were surveyed by Certified Practising Real Estate Agents (CPREA), with 73% saying that they would expect a lower price from a private seller compared to a property listed by an agent.
CPREA chairman Geoff Baldwin said it’s not uncommon for buyers to negotiate even harder when they know that an agent isn’t representing the vendor, resulting in the buyer usually achieving a lower price.
“When confronted with a lower offer from a buyer, private sellers tend to think, well I’m not paying an agent and hence are more likely to accept a lower price,” said Baldwin.
“In fact listing the property with a proven, experienced negotiator can not only justify the agent fees but in many cases will result in a sale price thousands, if not tens of thousands higher than if sold privately,” he said.
He also noted that many property owners can find it difficult to deal directly with buyers, particularly those that are negative about a property, and can struggle to assess the financial capacity of buyers, deal with “subject to sale” offers, write solid contracts, get meaningful deposits and other aspects.
Property Observer readers – what’s your take?
{mijopolls 54} 
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