Around 10 percent of homes in Sydney and Melbourne were sold at a discounted price in February as the market slows down, according to data from Domain.
In Sydney, 10.5 percent of properties lowered their asking price before selling, a jump from 5.9 percent in July 2021.
The figure was slightly lower in Melbourne, at nine percent. The downward adjustments were around five percent in both cities.
Nicola Powell, the chief of research and economics at Domain, said the numbers were a good indication of buyer sentiment.
“So it’s another statistic to show that we’re starting to see momentum slowdown in our housing markets in Sydney and Melbourne,” Powell told The Epoch Times.
It also reflects the gap between sellers’ expectations and what buyers are now willing to pay for, with the market moving firmly past the phase where many properties sold way above their asking price in 2021.
“I think what this showcases is that the market is in a different situation this year,” Powell said. “We’re seeing buyers are being much more mindful of what they’re paying for a home. They don’t want to overpay.”
Buyers now have a lot more choice as the volume of listings has increased, meaning sellers are forced to be more competitive with pricing their properties to achieve the sale.
As the market cools down, some areas in Sydney have already started to see prices fall, which Powell said was another indicator that the property market is going to the into the next stage.
“You tend to find the upper end of the market leads price cycles in both Sydney and Melbourne and we already have these suburbs that have seen some quarterly reductions in price,” she said.
Nerida Conisbee, the chief economist at Ray White, said there had been a slight increase in discounting across the country, particularly in Darwin, but it was less pronounced in regional markets.
Additionally, the slowdown in auctions was another indication of a slowing market.
Conisbee said when Sydney and Melbourne’s markets saw big price drops, it typically coincided with negative economic conditions.
Meanwhile, present economic conditions were improving and unemployment was falling. At the same time, the cost of finance would soon increase and people could also see further borrowing restrictions.
“So those things are just adjusting potential buyers’ willingness to pay at such high rates. For now, it just seems to be slowing the market down and flatlining pricing,” she said.
Meanwhile, other capital cities like Brisbane, Adelaide, and Canberra are showing strong performances.
“They don’t tend to move closely with interest rates, they tend to move a bit more with what happens with population growth,” she said.
