FAREWELL PRICE TAG

The true value of a property can be a bit more difficult to ascertain in today’s market.

IF YOU are a buyer in this market, you might think (fairly) that property, in particular the right property, is a rare commodity. You know what’s even rarer though? A property with a price tag.

As price expectations are exceeded more often than not, agents are increasingly finding that setting a price becomes almost (almost being the operative word here) irrelevant when it comes to determining the value as the gulf between advertised price and selling price widens. It’s important to note here that this doesn’t forgive or condone bad behaviour – the advertised price must be at a level that the seller would be accept, unless you want an unfriendly call from the Office of Fair Trading.

When the presumption is that a listed price is going to be disconnected from reality (intentionally or otherwise), we then start to see alternatives become more popular – with homes featuring listed prices now actually the minority in some areas.

Auction, Expressions of Interest, “Best offers by X” or even the ever descriptive “Contact agent”, all are evidence of the new normal as the market continues to run. Tight stock levels continue to play a huge part in the changes and the FOMO is real.

Let’s run an example: tightly held suburb such as Parramatta Park, three Queenslanders on the market, all 3 bed, 2 bath, around

500sq m blocks. This week, they may all be mid $500,000s.

Next week, with two of the three under contract, you might find that buyers push the third closer to $600,000 as the realisation hits that their choice has narrowed.

Higher prices will entice more sellers into the market, particularly investors keen to cash out, or downsizers who will make the most of sought-after areas or property styles, but with the fear that prices will continue to rise, some buyers will pay more now, to avoid the risk of paying even more later.

While this might be a common feeling in Sydney or Melbourne, it’s been a long time since this sentiment has been home here in Cairns.

Price does have its place. Some buyers will stick to clear price indications. And auctions will always preclude finance dependent buyers. As always, it’s about talking to your agent, setting a strategy, and planning for success.