A number of property markets in Australia are returning to buyers’ market situation. This is when the power of negotiation switched from property seller to the property buyer. In a hot property market, when the demand for the property outstrips supply of houses, the property market is a sellers’ market. This is what we have seen in Sydney and Melbourne property markets prior to end of 2017. A large number of property buyers, both local and international, were showing up to each auction creating significant demand and giving the seller and option to negotiate, push prices up and receive a premium. There were instances in Sydney where more than 20 buyers were competing on the same auction, in the auction frenzy prices even for dilapidated houses were commanding a premium.
As property market cooled towards the start of 2018 and into 2019, the frenzy and froth in the housing market started to disappear. This meant that less people showed up for auctions. Auction rates in Sydney and Melbourne decreased significantly. This means that less buyers were showing up for auctions and that the buyers had the ability to negotiate house prices down, as the vendors started to fear on losing out on a sale.
Other cities, like Brisbane and Adelaide, are exhibiting a balanced market. Since Brisbane property market did not experience the boom in house prices we have seen in Sydney and Melbourne, naturally the city did not experience the declines the other two have seen. Overall, we are happy with Brisbane property market, this steady and stable market, weathered mining downturn rather well. While Perth and Darwin declined significantly, Brisbane property actually remained very stable.
Since Sydney and Melbourne property markets are cooling and are entering a cyclical downturn, it might be the best for the sellers to hold off property sales until better time. If the vendor is not in the rush and is not in need to sell their house, it is always useful to evaluate holding off the sale until property market starts to recover.
Sellers also might need to put an extra effort into ensuring that their property stands out and attracts as many buyers as possible. The benefit of having multiple offer on the same property is that the seller could chose the best offer and, potentially, ask the buyers to increase their offers due to multiple offers on the same property.
There are a number of strategies to make your property stand out in declining market. These strategies include:
- Stage your property. This is a common and very important strategy. Buyers often buy property with their eyes in a very visual way. Staging the property helps buyers envisage how the property would look if it is lived in. Clean spacious design and clever selection of furniture could result in much higher offers.
- Take high quality, clean photos for the listing. The goal is to attract as many buyers as possible and often those buyers would be a result of people clicking on your property advertisement. Additional bonus might be if the photos are taken after the property is staged.
- Make sure the ad and the description stand out. Rather than having a generic property advertisement, highlight why your property is the best. What are the best features of the house, amenities, schools and so on?
- A lot of property sellers don’t include a flor plan. We think this is an important point that is overlooked. Floor plans are yet another tool that helps buyers see themselves in the property, which could attract additional interest.