“I think the data shows that buyers are willing to bid lower than they used to because buyer depth isn’t as good as it used to be, and suppliers are now accepting lower bids,” Powell said.
Melbourne discounts are likely to continue to rise as market conditions ease, it said, though for now they are still below May 2019 levels of 7.8 per cent. Sellers were then spooked by Labour’s now-abandoned federal election policies of shifts to negative leverage and capital gains tax concessions.
“Spring is really going to test pricing and buyer depth because we are likely to see more listings and more competition from vendors,” Powell said.
Buyers’ agent Cate Bakos said Melbourne had a two-speed property market, with renovated houses in good areas selling above expectations, while discounts were being offered on houses that needed repairs or houses that were in a bad location. Or they had a bad plan.
“There are really two camps, there are uncommitted houses and committed houses – committed includes renovators – were seen as an opportunity to enter the market, but now it’s just a burden due to high construction costs and unavailability of builders.” Bakos said.
Some buyers were still willing to take a chance and buy a fixer-upper, and they were getting good deals when they did, he said.
Ray White Cheltenham’s sales agent, Trevor Bowen, said it was taking a little longer to put a sale together, as interest rates rise and banks take longer to approve loans.
“A lot of private sales are subject to financing, so the sales are stretching out a few weeks because the banks are taking longer and it’s taking longer to get financing,” Bowen said.
It also meant buyers were less willing to take the risks they once had by making an offer before their financing was approved, he said.
Although some Melbourne residents were happy with their sales, a growing number were unhappy with the sale prices.
A survey by RateMyAgent, a real estate agent review website, showed that the number of satisfied home sellers dropped from 44% in the June quarter of last year to 35% this year.
Michael Davey, CEO of RateMyAgent, said the drop in happiness reflected sellers’ expectations of getting the same prices as when the market was at its height late last year.
“They looked at what people were accomplishing over the last 12 to 18 months when the market was up, and I think that has created a level of anticipation,” Davey said.
Sellers may have decided to list their property when prices were high, but given the time it took to put a property on the market, it was taking time for them to readjust to falling prices, he said.
Davey expected satisfaction levels to fall further in the coming months as the higher cash rate and a possible rise in prices in the spring would put further downward pressure on prices.
“Houses are still selling, they just aren’t going as crazy as they used to. Median prices have come back, but they certainly haven’t fallen off a cliff,” she said.