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.

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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>
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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.
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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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Average asking prices in capital cities only increase marginally in December 2019 according to SQM Research.
The capital city asking prices have increased by 2.4 per cent for houses and 0.8 per cent for units in December 2019 with the average asking price at the year end being $977,900 for houses and $577,600 for units. This is significantly lower than a year ago with the capital asking prices showing an increase of 5.8 per cent for houses and 1 per cent for units. 
Over December 2019, Sydney and Hobart were the only capital cities to show increases in both house and unit prices. 
Meanwhile, all other capital cities recorded increases in house prices but saw marginal declines in unit prices over the month. Perth, in particular, saw the greatest fall in the unit market with a 1.6 per cent decline while the city's house price increased by 0.3 per cent. Hobart's unit prices recorded the strongest growth of 2 per cent. Darwin continues to record declines in both house and unit prices of 2 per cent and 1.2 per cent respectively.
<img src="https://www.urban.com.au/images/2020/1/9/N3_Asking%20Price.jpeg" alt="" width="915" height="693">
Weekly Asking Prices Index, SQM Research.
Overall, Melbourne shows the strongest price growth of 4.2 per cent for houses despite its decline in the unit market at 0.6 percent. Melbourne's median house asking price has now returned back to over one million dollars. This was last seen between the period of April and June 2018. The city's median asking price is currently sitting at $1,027,600. Following behind, the Sydney house market similarly climbed back to its 2017/2018 highs of over $1.3 million, records show a 2.4 per cent increase in asking house prices over December 2019. The current median asking house price in Sydney is $1,341,400.
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j.ballantyne1990-6AQqhLzZaK

Capital cities average asking prices increase marginally: SQM Research  

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EXPERT OBSERVER
Figures released today by SQM Research reveal national residential property listings increased in August by 2.9%, to 325,693 from 316,391 in July 2019.
Compared to 12 months ago, listings were down by 2.1%.
All states experienced an increase in property sales listings over the month, with Melbourne experiencing the highest increase at 6.7% followed by Sydney with a 5.0% increase.
Perth recorded the lowest increase of 1.7% over the month.
Year-on-year Sydney’s listings declined by 15.3%.
Melbourne also declined but by a smaller margin of 1.9%.
Perth and Darwin’s year-on-year listings also saw declines of 4.6% and 3.6% respectively.
All other states recorded increases on their year-on-year listings.
Hobart’s increase was 10.8%, the highest increase in the nation, followed by Canberra with an increase of 10.0%.
August’s counts in part reflect the annual seasonal rise in listings that occur as we enter into the spring period.
It also may represent some return of confidence by vendors especially in the Melbourne and Sydney property markets.
Agents will be pleased to hear the new listings also rose during the month, however, older listings remained fairly stable.
Asking Prices
Capital City asking prices increased marginally by 1.0% for houses but decreased 1.0% for units, over the month to 3 September 2019. Unit asking prices are now $560,500 and houses $928,800.
Compared to a year ago, the capital city asking prices posted declines of 1.5% for houses and declines of 2.3% for units.
Over the month, Melbourne’s house and unit asking prices both increased by 0.1% and 0.4% respectively. Hobart also increased its house and unit prices by 0.5% and 4.2% respectively.
Sydney’s asking prices has increased by 1.7% for houses but declined 1.2% for units. Other states to post asking price increases was Brisbane with a 0.5% for houses but 0.4% decline for units; Perth recorded a 0.6% increase for houses but a 0.8% decline for units. Canberra also managed an increase of 1.6% for houses but a 0.3% decline for units, whilst Adelaide asking prices was stable for houses but declined 0.4% for units.
LOUIS CHRISTOPHER is the CEO of SQM Research.
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louischristopher-TWpYcZDLBK

National residential listings increased in August: SQM's Louis Christopher

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

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National residential listings rose nearly six percent in August, according to SQM Research, however asking house prices fell 1.9 percent and unit prices fell 0.5 percent.
The highest property listing increase was found in Sydney where listings were up 10.9% in the month, and up over 30% percent from this time last year.
Sydney residential property listings are now at the highest level recorded since February 2009, surpassing the peak in listings recorded during the 2010-12 housing downturn.
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In Melbourne, listings jumped 16.3%, to be up 25.3% over the year to August 31. 
Click here <a href="https://www.propertyobserver.com.au/images/2018/9/4/listings.jpg" target="_blank">to enlarge.</a>
<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/2018/9/4/listings.jpg" alt="">
Stock on market rose 10.7% in Canberra while even in Hobart, listings rose 4.5%, though they remain sharply down from a year ago, reflecting a shortage of properties available for sale in the Tasmanian capital. 
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Listings rose 5.2% in Brisbane in August from July and by 4.9% in Adelaide. In Perth, stock on market rose 3.8% in August while Darwin’s listings increased by 2.2%. 
SQM Research managing director Louis Christopher said the increase in the supply of properties for sale has emerged in all capitals. However, numbers were inflated by five weekends falling during August, up from four in July. 
“That made a significant difference to stock levels in August, which were boosted by the fifth weekend," Christopher said.
"In addition, some home owners are readying for a sale and want to list their homes sooner rather than later before prices fall any further, especially in Sydney, where asking house prices are down 2.1% over the month to 4 September. 
"That is also true of Melbourne, where the property market has slowed, reflected in a 1.2% drop in asking house prices over the month."
Asking Prices 
Capital city average asking prices fell 1.9% for houses to $942,800 while unit asking prices fell 0.5% to $573,600 over the month to September 4.
Melbourne asking house prices fell to $972,000, back below $1 million, while asking house prices in Sydney fell even more, by 2.1% to $1.32 million. 
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Only in Adelaide did asking house prices rise, up by 0.2% over the month, though prices are down by 1.7% over the year to 4 September. 
Asking house prices were down by 0.2% over the month in Hobart. Canberra prices too dipped, down 1.8% over the year to $799,200.
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National residential listings rose 5.9% in August 2018 from July. 
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Listings rose by 10.9% in Sydney, up 30.4% higher from a year ago. 
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Sydney residential property listings are now at the highest level recorded since February 2009, surpassing the peak in listings recorded during the 2010-12 housing downturn. 
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Melbourne listings rose 16.3%, to be up 25.3% higher over the year to August 31. 
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Listings rose in Hobart by 4.5% in August but are down 18.8% from a year earlier. 
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Capital city average asking prices fell 1.9% for houses to $942,800 while unit asking prices fell 0.5% to $573,600 over the month to 4 September. 
 
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jrobinson-rf4aSBido9

National listings rise in August but asking prices fall: SQM Research

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Listing a property at too high a price could be a costly mistake in the current Sydney market, especially if you need to sell.
But getting as close to your asking price or even more is important to feeling good about any property listing.
In an emerging slowing or falling market, the mismatch between asking and paid prices is likely to be at its highest, possibly due to pride or naivety.
To arrive at the right listing price, it's wise to research the recent sales.
These were your recent competition, so your estate agent should be able to prepare a comparative market analysis of comparable homes, detailing the initial price, how much the home actually fetched, and how long it took to sell.
Sales so far this year are relevant, but look back to 2017 to understand how prices are trending.
Don't just appraise the prices on the handout or the computer, best also go and see how your offering stacks up against the sold stock.
A drive by the homes provides a curbside appraisal, and you ought be popping in to open houses so you can get a better sense of what buyers are paying.
Pricing was less of a challenge in the recent hot markets when the scarce inventory triggered enthusiasm among overly keen buyers.
Discounting on asking prices is however normal, and CoreLogic currently puts it at 5.6 percent for private treaty sales that are taking around 31 days. This time last year it was a 4.1 percent required discount after just 27 days on market. 
Houses in the UK have been selling at around three percent discount.
The biggest recent Sydney 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.
But is is happening in suburbs all over Sydney.
No wonder buyers reckon the market is falling their way, so it might be wise for vendors to marginally underprice to get ahead of the curve.
Especially if you are upsizing and have secured something at say 10 percent off.
Any price indication needs to ensure you gain maximum buyer interest.
Certainly if you don’t get any interest or offers in the first week or so, especially for auction listings, then it's likely you’ve priced too high.
Much of the pricing process relies on trust in your knowledgable estate agent.
You want honest advice from day one, so don't fall for the agent who volunteers an extraordinary potential sale price simply to get your listing.
Check their own asking price to sale price track record as these agents will seek to crunch your expectations sooner or later.
This week saw a forecast that Sydney house prices are likely to fall 4.2 percent this year, although Moody's Analytics said the correction would be short-lived, with prices set to recover a modest 0.9 per cent next year.
It's best remembered that our property market is fluid and complex in actual individual outcomes. Property pricing is, after all, emotional not prescriptively scientific.
This article was first published in the Saturday Daily Telegraph.
 
 
 
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