Perth’s property market continues in the Sellers’ favour with short supply and high demand. This current imbalance in a relatively free economic market, inevitably leads to an eventual correction. This is some way off in my opinion, but some early signs are emerging.
Agents are desperate for listing stock and, unfortunately, one response to this market is for agents to offer ‘happy prices’ to would-be sellers, the aim being to secure the listing and hope the market ‘catches up’ during their period of authority.
Additionally, emotional attachment often leads home owners to believe their property is worth more than a market consensus of a fair price. Opinion of market value for property is largely a subjective exercise; various agents will have differing views of market price, friends, lovers and others have their own opinions as does the property owner.
Sellers who have committed to another property at a higher-than-hoped price will also be pressured to sell their own home for more than the market will bear.
The result can be price expectations that well exceed market reality.
In truth, the value of a property is not determined until a buyer is found, negotiations finalised and the contract for sale completed. The combination of market information, comparative property sales analysis, demand and supply levels, buyer activity and property presentation provide an insight into what fair market price might eventuate for a property, but what does the anticipated or listing price have to do with the final market price?
In short, plenty. Statistics show that sellers that over-price their property lose money in the end. Sellers that allow their property to languish on the market due to unrealistic price expectations (either derived from themselves or an over-zealous agent) end up fighting against the buyer sentiment of a “stale” listing; a property that has been on the market for above average periods of time. Such properties are often simply over-priced and buyers will discount them because they think “there must be something wrong with it if no one has bought it.”
Sellers that have to discount listing prices to sell will almost always end up selling for less than if they had a realistic market price expectation from the beginning.
Sellers are well advised to take in professional advice from a local REIWA agent and form a considered, unemotional opinion of value based on facts, evidence and reputable market data.
In this rapidly rising local market, buying vacant land and building might be a smarter bet than buying an established home. Vacant residential land values across Perth increased about 34% last year, pushing the median lot price to $329,000. The old real estate saying of “land appreciates, houses depreciate” is … Read more
When the time comes to sell or lease your property, property owners often look to the internet to help shortlist agents that might meet their needs. Well established methods of choosing your agent such as re-employing an agent previously used, recommendations from friends and relatives or visiting Home Opens to … Read more