If you are a buyer in this market, you might think (fairly!) that property, in particular the right property, is a rare commodity.
You know what’s even rarer though? A property with a price tag!
As price expectations are exceeded more often than not (sometimes by a surprising degree), agents are increasingly finding that setting a price becomes almost ( almost being the operative word here) irrelevant when it comes to determining the value as the gulf between advertised price and selling price widens. Important to note here that this doesn’t forgive or condone bad behaviour – the advertised price MUST be at a level that the seller would be accept, unless you want an unfriendly call from the Office of Fair Trading.
When the presumption is that a listed price is going to be disconnected from reality (intentionally or otherwise), we then start to see alternatives become more popular – with homes featuring listed prices now actually the minority in some areas.
Auction, Expressions of Interest, “Best offers by X” or even the ever descriptive “Contact agent”, all are evidence of the new normal as the market continues to run. Tight stock levels continue to play a huge part in the changes and the FOMO is real. Lets run an example: tightly held suburb such as Parramatta Park, 3 queenslanders on the market, all 3 bed, 2 bath, 500m2 (ish) blocks. This week, they may all be mid $500,000s. Next week, with 2 of the 3 under contract, you might find that buyers push the 3rd closer to $600,000 as the realisation hits that their choice has narrowed, and there is no guarantee of when the next one will come.
Higher prices WILL entice more sellers into the market, particularly investors keen to cash out, or downsizers that will make the most of sought-after areas or property styles, but with the fear that prices will continue to rise, some buyers will pay more now, to avoid the risk of paying even more later. While this might be a common feeling in Sydney or Melbourne, its been a LONG time since this sentiment has been home here in Cairns.
Amongst all this though, price does have its place. Some buyers, no matter how desperate or exasperated, will stick to clear price indications, even if its just a bottom line. And auctions will always preclude finance dependent buyers. As always, its about talking to your agent, setting a strategy, and planning for success.