Business as Usual

In a figure that really brings home how slow the current decline in the housing market actually is, the ABC reports that house prices in Sydney and Melbourne are currently falling by about $1000 per week. As described by Tim Lawless in the October CoreLogic housing market update for Sydney, it is “hardly a crash”. In the same sentence, Lawless also notes that the relative rate of decline is less than the last decline between 2010-2012.

As the market adapts to the new conditions, the onus is on vendors to be realistic about how long it might take them to sell, and for how much. Again, Tim Lawless, this time writing for the Real Estate Conversation, discusses the fact that we are now – especially with the advent of spring – in a buyers market:

“Buyers have little sense of urgency under these conditions; they can negotiate hard, take their time to make a purchase decision, and if they feel a property price doesn’t reflect fair value, they can easily move onto the next property option.”

Harden Up

Given that these are the current market conditions, vendors may well need to start making extra effort to keep potential buyers interested. A marketing budget may need to be extended, and double-checks may need to be made to ensure their property is in the best condition it can be. The trick is to become more professional, to learn more about the process, and to find out what works.

The alternative is to make like an ostrich. The likely reality is, as Geordan Murray, HIA Acting Principal Economist, and writing in the Real Estate conversation about housing affordability says, “the downturn in home prices is yet to run its full course”. In other words, adapt to the new conditions, understand that more effort and flexibility may be required, or fail to sell.

With that in mind, more information is better and the experiences of those who have gone before is gold. From that perspective there is a nice story about last year’s winners of the reality show The Block talking about the experience of selling their property through auction.

Quite often we get caught up in the statistics of grand market forces, and forget about the human experience throughout all this. This story gives a nice insight into some of the emotional journey a vendor might experience on auction day – especially when so much hard work has gone into making sure the house is at its absolute best.

Not so nice: Bondi

At the other end of the spectrum, the infamous Boonara Avenue hoarder house in Bondi has gone up for auction for the third and – from the neighbours’ perspectives – hopefully last time. Waverley Council is trying to recoup over $250k spent in a number of ordered cleanups to the property over the last few years, and the property is being sold from under the owner as if vacant land. Neighbours have been dealing with the foul smell and vermin for going on 20 years, and the property comes as-is. It includes the mountains of garbage as part of the deal. It is truly a once in a lifetime deal, but whether that is a good or a bad thing… is moot.