Homebuyers are in a unique position to negotiate on prices more aggressively despite the low level of supply currently available in the market.
CoreLogic research director Tim Lawless said it is clear housing market conditions have turned to favour buyers over sellers, which was particularly apparent in recent months.
“Buyers are no longer facing a sense of urgency to make a purchase decision and they can negotiate on price more aggressively — if they don’t secure a price they think reflects good value, they can simply move on to the next property amid persistently declining prices.”
In fact, based on homes sold by private treaty over the December quarter, properties were on the market longer, averaging 31 days across the capital cities and 41 days in regional Australia.
Auction markets were also weak, with capital cities finishing the year with a clearance rate of 51.9% versus the decade average of 65.1%.
Mr Lawless said vendors applied larger discounts to their initial asking prices to sell their property.
“Vendors, on the other hand, need to be realistic when setting their price expectations, be prepared to negotiate and ensure they have a high-quality marketing campaign behind the property,” he said.
Will low listings activity persist?
Following a lacklustre activity over spring and early summer last year, vendors seemed to remain reluctant to test the housing market.
CoreLogic data shows that over the past four weeks, the flow of new listings was 25.9% below the five-year average and 20.3% lower than the same period a year ago.
Typically, new listings increase substantially in late January through to late March, with the peak usually happening over the 11th week of the year.
This year, however, early indicators seem to be showing in the relatively mild flow of new listings to the market, at least over the coming weeks.
According to CoreLogic, pre-listing activity by real estate agents were 15.3% lower in the first 22 days of the month compared to a year ago. This suggests that sellers remain wary of listing their property while market conditions tend to favour the buyer.
Mr Lawless said week 11 will be an important test for the housing market.
“Arguably there will be some pent-up supply that has built up through the second half of 2022 from prospective vendors who have been holding off selling until market conditions improve,” he said.
Any ramp up in new listings at a time when buyer activity is likely to remain below average would only make the market more in-favour of buyers.
“A ramp up in new listings provides more choice for those buyers who are active, and potentially creating some additional downwards pressure on housing prices.”
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