The Melbourne market appears to have peaked back in October/November of 2017. Today, that means buyers are a little more cautious about where they splash their cash. On the flipside, many vendors have yet to realise the frenzied buyer pool of 2017 has dissipated. In many cases, vendors are pricing their homes above what buyers are now willing to pay.
Many agents are reporting that they are seeing far
fewer people attending open homes and even fewer prepared to stick a hand in the air to bid on auction day. Where you may have seen 4-5 bidders competing last year, that number is down to 1-2 on a good day, and even zero on a not so good day (for vendors at least).
I’ve attended many auctions this year where homes have passed in on vendor bids with no genuine bids at all or the sole bidder was taken inside to negotiate when the vendor’s reserve was not met during
the auction. I’ve also seen properties selling for below the advertised guide price.
Last Saturday I attended an auction on behalf of a client for a property in Ascot Vale. It was marketed with a range of $900K-$990K and the comparable sales supported this pricing. I was the only bidder and the home passed in to me. I walked inside and was told the vendor’s reserve - $1,050,000, $60,000 above the guide price. I believed this to be an unrealistic
vendor more so than underquoting, but that is the battle that agents are facing. Vendors seeking 2017 prices in a softening 2018 market.
Turns out that I was correct. I received a follow up email from that agent this week advising that there had been a "price correction". The home was now for sale for $995,000 and was my client interested at that level? I told her that we had already purchased something else (which is worth at least $50k more than what
we paid for it, might I add. That's a benefit of being connected).
That other house? Unfortunately for that unrealistic vendor, two weeks later and it's still for sale. Sellers must now meet the market or risk a similar unhappy scenario.
