Overpricing is a major issue in Perth, and one expert says it’s causing the property market to go “stale”.
Sellers in Perth are trapped in a slump where the longest time a property sits on the market is a staggering 82 days. The situation has resulted in the highest discounting rate of all Australian capital cities, with prices reduced by as much as 7.4 per cent, according to Peter Peard, CEO of the Peard Real Estate Group.
“This overpricing results in properties languishing on the property market for months causing great frustration to the owners of these properties,” Mr Peard said.
Perth’s property market is reportedly facing a demand issue. Peard Real Estate Group data shows Perth has 22,141 properties for sale, compared to Sydney’s 21,645, a difference of almost 500. Perth has less than half the population of Sydney.
“Overpricing of properties in Perth has been driven by a number of factors including agents lacking the necessary marketing expertise and support to correctly appraise a property combined with property owners not fully acknowledging that it is a buyer’s market in Perth,” Mr Peard said.
“Successful real estate agents in the Perth property market are those who can correctly appraise the value of a property and educate the vendor as to its true market value before it is listed for sale. After it is listed for sale, the agent then needs to put in place a marketing plan that will attract the greatest number of potential buyers.”
Mr Peard said sellers need to have an accurate price for their property when they are listing.
“A property which has just been listed on the market will generally attract a high number of people at home openings and a high level of inquiry from prospective home buyers,” he said.
“During these important early weeks, it is critical that the home is correctly priced when it is exposed to the higher number of potential home buyers.”
Mr Peard warned that the longer a property is on the market, the higher the chance it will appear “stale”.
“A home that is repeatedly advertised over a period of time creates an image amongst prospective purchasers that there may be something wrong with the home or that it is not value for money,” he said.
“Homes that stay on the market for a prolonged period of time, therefore, attract diminishing interest amongst home buyers and that sets up the risk of a property ultimately selling below its real market value.”