Yahoo Finance The properties you can score a 10% discount on
One particular type of vendor is letting property prices drop by as much as 10 per cent, as the coronavirus pandemic continues to wreak havoc on the markets.
Vendors who need to sell quickly, perhaps because they’ve already bought, or have another upcoming financial commitment, are negotiating on prices and often dropping prices by between 5 and 10 per cent, Domain reports.
Agents have reported that properties they are selling are dropping by around $100,000 or $200,000 in just weeks of posting a listing.
“There’s not that many buyers,” Melbourne agent Mal James told the outlet.
Also read: Why now is the right time to buy a house
“There weren’t going to be that many buyers in April anyway, because of Easter and Anzac Day.”
Some property listings are adding urgency, with agents instructed to write: “Clear instructions to sell this home ASAP”, or “Price drop, urgent sale”.
Discounts are more common in bigger-ticket sales, above the $2 million price-point, according to Real Estate Buyers Agents Association of Australia president Cate Bakos.
“I haven’t seen greater than 10 per cent, but I have seen 10 per cent for all of the super-motivated vendors,” she told the outlet.
Vendors who are a little more relaxed about selling aren’t budging, however.
Auction clearance rates drop
Auction activity has plummeted since lockdown measures restricted buyers from attending properties in-person, with clearance rates plummeting to 31-year lows.
And while there’s no doubt the property market has taken a hit, REA Group chief economist Nerida Conisbee said it’s not quite as dramatic as it seems.
Conisbee said clearance rate data is “all over the place” due to a high number of auctions being withdrawn due to the ban on holding onsite auction gatherings. Withdrawn auctions are counted as unsold, which pulls the clearance rate down.
But vendors are actually moving to different kinds of sales.
“At this stage what seems to be happening is that people are moving to private sale, sale by tender, they’re drawing on inquiries made on the property - there’s a lot of phone calls taking place at the moment,” Consibee said.
“We’re not going to see many auctions taking place over the next month, instead we’ll see people selling by more traditional means.”
Is now the right time to buy a house?
While it can seem exciting to jump into the property market right now, Metropole Property Strategists CEO Michael Yardney warned against buying anything you normally wouldn’t.
“This is a great time to buy a home or investment property at a price that you were unlikely to be able to get a couple of weeks ago when the property markets in big capital cities were booming and there were more buyers around than sellers,” he told Yahoo Finance.
“[But] remember: don’t make long-term decisions like buying a home or an investment property based on the last 30 minutes of news.”
However, if you’re in it for the long-haul, and can secure a property in a “good quality location” where the chances of locking in a tenant are high, then Conisbee said it might not be a bad idea.
“If you aim to hold for as long as possible, you will more likely do well no matter what conditions you buy in,” she said.
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