Illawarra vendors are being encouraged to keep their price expectations in check, in accordance with the current state of the property market.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
According to The Domain Group, the Sydney weekend auction clearance rate fell below 55 per cent on Saturday, as home sellers reduced their reserve prices in some suburbs.
Therefore, some agents are increasing the pressure on vendors to take a “haircut” on the prices they hope to achieve.
Although the weekend’s figures for the Illawarra are not yet finalised, Australian Property Monitors data indicates that for recorded auction activity over the six months ending March 2018, Wollongong houses recorded a clearance rate of 80 per cent and West Wollongong 40 per cent from 10 properties each.
A year earlier, Wollongong had a clearance rate of 68 per cent from 19 properties.
Meanwhile, Wollongong units in the six months to March 2017 had a clearance rate of 75 per cent from 16 properties. As of March 2018, the rate was 50 per cent from 26 properties.
MMJ Real Estate Wollongong director Daniel Hastings, who works as both an agent and auctioneer, said the Illawarra market overall was mirroring the Sydney market.
“We’re definitely seeing a slowdown in activity, which seems to have largely been from the tightening of lending criterias,” he said.
“That’s had a knock-on effect; we’ve definitely seen the correction in the market as a result, particularly since the new year.
“We’re starting to get a better idea now as to where the adjustment is heading. You’re probably seeing some properties actually now sell because they’ve listened to the market.”
Mr Hastings said there were still plenty of vendors that likely have the misconception that “the market is still going gang-busters like it was for the previous few years”.
He said choosing the appropriate method of sale and making sure vendors’ price expectations are “correct and adjusted accordingly” were vital.
“In our case, we’re probably not auctioning as readily,” he told the Mercury.
“We’re probably qualifying properties a little more to see if it should be an auction candidate.
“If you haven’t got your second and third potential bidders, or you don’t think there’s a strong chance of that, then quite often you might be looking to just do a ‘for sale’ type of method instead.”
Mr Hastings said these factors were less of an issue among buyers who are selling homes in which they have a lot of equity and repurchasing in the same area.
He said the relevant statistics hadn’t yet indicated, or weren’t yet available that would indicate what percentage adjustment had occurred in the Illawarra.
“It may be a couple of months away before we’ll see or hear a lot of that information coming through,” he said.
“But auction selling rates have obviously come off the heady days of 80 per cent or so, and they’re now down to the mid-50s generally speaking.
“It’s a hell of a lot more balanced, so you’ve got to balance your expectations accordingly.”