Homeowners who decide to sell this summer can likely reap a healthy price, but agents are gently letting down some sellers who are too optimistic.
After last year’s 25 per cent house price growth, and examples of properties soaring a million dollars or more over their reserve price at auction, some owners could be forgiven for high expectations.
But agents say this market is the most balanced they have seen for some time, and are warning hopeful owners against holding out for sky-high offers.
“Vendors are still quite hopeful that they are going to achieve a price that may or may not be within the marketplace,” Ray White NSW chief auctioneer Alex Pattaro said.
“The buyer sentiment certainly doesn’t have that fear of missing out compared to what it did last year … buyers are now a little bit more cautious in overpaying.
“Sellers naturally think their properties are always worth more than what the one sold [for] down the road, however, that’s not the case.”
He said after growth of about 30 per cent in many Sydney suburbs, sellers were still in “the best market conditions we have seen”, and warned uncertainty looms later in the year over the federal election and possible interest rate hikes.
It follows a pandemic property boom, where homeowners armed with low interest rates chased larger homes in which to work remotely, and sent house prices up 25.2 per cent nationally in the 12 months to December, on Domain data. Sydney rose 33.1 per cent and Melbourne gained 18.6 per cent.
Separate figures from conveyancing platform PEXA found a 31.8 per cent increase in sale settlement volumes last year compared to 2020 as buyers rushed in, and a 57.3 per cent rise in value of total settlements.
In Melbourne, Nelson Alexander director Arch Staver has seen some clients who are optimistic, but fewer and fewer with expectations that are entirely unreasonable.
“You don’t list a house in the midst of an aggressive pandemic unless you have a genuine need to sell, so I think you’ll probably find fewer speculative vendors,” he said.
He is having “very frank and very honest” conversations with sellers about price expectations.
“Once upon a time an overzealous or overenthusiastic agent will say, ‘Let’s go for it’,” he said.
“Where there’s a pandemic the conversation is more like: ‘How did you arrive at that figure? These are your comparable sales’.”
On the other hand, buyers can see the competition they face for the most sought-after homes, he added, citing a 9am inspection of an “attractive but nevertheless humble” Collingwood terrace that drew 54 groups.
The Agency general manager for Victoria Peter Kakos said the market appears balanced to start the year, in a wait-and-see pattern.
“The vendors, those that are willing to adjust and align to the market, are going to reap the rewards, and if a property is overpriced it is just going to sit there,” he said.
“If vendors are sitting waiting for that premium, they need to quickly align to the market to get sold.”
This could include looking at evidence of recent comparable sales, looking at prices for competitor listings, listening to buyer feedback and identifying potential limitations of the property.
“Sometimes it’s not always about just dropping the price, it could be about just a little bit more patience to find that right buyer,” he said.
Barry Plant executive director Mike McCarthy said the market had made a promising start to the year, but warned against looking at a price from two or three months ago and assuming it could be achieved today.
“We tend to latch onto the good results if we’re thinking of selling,” he said. “[Sellers think] ‘that place sold for that much and my place is a little better’.”
Vendors should look at a range of comparable properties and be realistic about that range, rather than focusing on one standout result that soared under auction competition, he said.
BresicWhitney chief executive Thomas McGlynn has seen a rise in the number of homes for sale give more breathing room to sellers who need to buy back in, and now do not need to sell for a knockout price to be able to buy.
“There’s been a little bit more opportunity for sellers to find their next home,” he said. “Last year that was quite difficult, which stopped a lot of people coming to market and affected sellers’ expectations.
“Unless people got a hugely out of line price, they wouldn’t sell. That has changed this year.”
The current marketplace is neither in favour of sellers nor buyers, he said, with double the active bidders at auctions now compared to December.
“If they are priced in a way that is not out of line with the market, and is fair, then they are in a very, very good time to not only achieve a good price but also have a bit more options on the table to go and purchase something.”
Article Source: www.brisbanetimes.com.au
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