A tough time for property

There is little doubt that the real estate market in WA has slowed down to a crawl.

Sales have evaporated and there is little activity occurring at the moment.

This has been variously attributed to the GST and the potential rises in interest rates, etc.

Managing director of Hegney Property Valuations Gavin Hegney has warned home sellers in WA to take a more pragmatic approach to pricing their homes.

The main reason for this is the increasing difference between the listing price and the selling price of the homes.

As Mr Hegney says: “With substantially more home sellers than home buyers in the market, it means that home sellers will have to significantly drop their selling price below the listed price if they want to sell a home.

“In a reasonably strong market, home sellers usually have to drop their price from one per cent to five per cent.

“In the current real estate market, home sellers may have to discount as much as up to 10 per cent.

“The fact is that they have to be more competitively priced to similar homes in their suburb if they want to enact a sale.

“The longer a home is on the market , the more difficult it is to sell and the more likely the home will be discounted in price even further if it is to eventually sell.”

This is the time of year usually when most of the sales occur.

Summer months do tend to see a spike in the number of homes sold.

This summer will be a good test to see whether the GST-induced fall away in sales has stopped.

The other interesting aspect to observe will be to see what price these sales occur at and whether Mr Hegney’s view of a 10 per cent variation from the listing price is sufficient for the sale to occur.

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