Login
iscover
With the Perth market running hot, sellers in the city are clearly confident and increasingly unlikely to drop property prices.
The Real Estate Institute of Western Australia (REIWA) has revealed that only 12.6 per cent of Perth houses this year are selling for less than list price.
This is far lower than the rates of discounting observed in the previous housing boom of 2013 and 2014, in which 44.3 per cent and 46.3 per cent of houses were recorded as selling for less than their listed prices respectively.
Commenting on these findings, REIWA CEO Cath Hart stated that the low level of discounting was “not surprising”, with “strong competition for properties” inflicting upward pressure on prices.
“Agents base their listing price on comparative sales, but the competition between buyers will often see it sell for more. How much more is very difficult to predict in the current market,” said Hart.
“And with homes selling so quickly, prices are moving upward quickly – each sale creates a new baseline for a neighbourhood. New homes in that area come to market above the baseline, but the competition often sees them sell above that which resets the baseline.”
Hart further detailed that across Perth, “many sellers are receiving multiple offers, with nearly 90 per cent of houses selling for more than the listing price”.
“REIWA data for Perth house sales to May this year shows they are selling for about 4 per cent more than the listing price. I note this is an average – every sale is different, with some selling for much more and some selling for less,” she commented.
“Pre-COVID, the last time the average was in positive territory was in 2006, when houses on average sold for 3.2 per cent more than the listing price. However, the proportion of discounting was much higher at 49 per cent.”
The CEO also noted that the segment of sellers discounting registered as the lowest in the most coveted price-brackets, with only 10 per cent of sellers accepting an offer below the listed price for properties listed between $350,000 and $800,000.
In extrapolating this figure, the CEO stated that this “small percentage means, on average, houses sold for more than 6 per cent above the listing price”.
Conversely, the greatest proportion of discounting was relayed as taking place at the highest end of the market, with Hart stating that “for houses sold over $3 million, 31.32 per cent sold for below the listing price” and that “here, the sale price was 2.63 per cent below the listing price on average”.
With reference to the REIWA’s findings, Hart expressed that now is “not the time to make a cheeky offer”.
“The traditional approach in real estate has been to come in below the asking price, but the strong competition for homes means buyers need to make their first offer their best offer.”
“And this doesn’t just mean in terms of price. Ask the agent what you can do to make your offer more attractive to the seller. In this market that could be a longer settlement, the chance to rent the home back while they find a new home or a cash offer,” the CEO concluded.
