With property values heading south in many major cities across Australia and signs of more falls to come, is it possible to sell your house for a good price in the current market?
James Crow, associate director at real estate agency Morton, says you can still sell for a top price and shared his strategies with Auction Day.
The positives of selling in a downturn
The downturn in property prices can be attributed to many macro factors like banks tightening credit, negative sentiment around banking following the royal commission, and APRA regulations, Crow believes.
These factors took away the urgency for buyers, Crow said, as they thought the market would fall further.
However, for sellers, the downturn does have some upsides for certain market participants.
Sellers looking to upgrade will be buying at a cheaper price and won’t lose money if buying in the same market, he explained.
Meanwhile, vendors who list their properties for sale can attract a good price, with buyers competing for the fewer houses on the market.
How to maximise price in a down market
Crow’s advice is that auction is the best strategy to sell in a market that is going down.
There’s a common perception that if a house doesn’t sell at auction, the sellers feel it “tarnishes” the property, Crow said.
“I disagree with that. We are seeing buyers act with far less urgency at the moment, and an auction creates urgency. Why not give yourself the likelihood of creating competition and exceeding everyone’s expectations?”
An auction builds momentum and creates a realistic price for vendor and buyers.
If the property fails to sell at auction, Crow says an auction campaign still allows the sellers to get better feedback from the market on pricing, and often the buyers who show interest during the auction period end up being the ones who buy the property.
On pricing, Crow says to start with a “bolshie” guide and don’t be afraid to be confident around expectations.
“Buyers do their research. You really need to make sure you’re demonstrating value to the marketplace or you’ll simply be discounted.”
Traps to avoid in a downward market
Be completely transparent with your agent and be sure to work as a team, Crow advises.
“You need to do your homework to find someone to entrust with probably the biggest asset you’ve got,” he said.
Look for referrals from friends and find an agent who will be transparent and give you tough love when you need it. In addition, you should avoid agents who offer “cheap marketing.”
Top sales in a down market
Crow sold three properties recently in the inner-city Sydney suburb of Pyrmont and achieved top prices for the homes, despite selling after property values started south.
Here’s how he did it:
67/104 Miller St, Pyrmont: sold at auction for $2.9 million
Crow admits the newly renovated apartment was “certainly not in that price range, but it was probably the best apartment in the building.”
There were four registered bidders at the auction. The opening bid was $2.5 million and went up in $100,000 increments. It was a premium result that would’ve been the same if it was sold at the market peak, Crow said.
28/1 Murry St, Pyrmont: sold at auction for $2,675,000
This property is the “perfect example to a seller as to why you go to auction.”
Sold in November 2018, the market had “certainly corrected by that point.” The auction had five contenders but two strong players who were fighting it out from the starting bid of $2.4 million all the way up to $2,675,000.
602/24 Point St, Pyrmont: sold post auction for $2.3 million
This auction missed the peak by about three months, Crow said. The vendor was initially hoping for $2.4 million but the two interested were acting with less urgency.
Neither of the two bidders was prepared to be the first to put their hat in the ring and place a bid. The property was passed in. Within three weeks, a new buyer purchased the property for a record price for the building.