PERTH property owners are overpricing their properties by up to 10 per cent in the expectation that house prices will rise by over 20 per cent during the coming year, according to Hegney Property Valuations.
The company’s managing director, Stewart Kestel, said the shortage of housing stock during 2003 meant sellers had previously achieved these inflated selling prices, which had resulted in the median price of many suburbs rising by more than 20 per cent.
“In a rising market, such as 2003, owners were constantly raising the listing price of their home based on immediate past sales in the local area,” he said.
Mr Kestal said the number of properties for sale in many suburbs had risen by 50 per cent during the past six months. Price growth rates in homes were expected to be around 10 per cent in the coming year, he said, which was fairly representative of a traditional Perth housing market.
“Overall, the supply of homes is now matching the demand among homebuyers, resulting in a more balanced housing market and in some areas the supply of available properties is exceeding demand,” Mr Kestal said.
“The danger for sellers is that if they over-inflate the house price of the property then it will be listed for sale for a extended period of time and not sell.”
He said the longer a property was listed for sale, the risk was that buyers would seek a higher discounted selling price for the home.
“In the current housing market, home sellers risk having their property for sale for over two years because they have overpriced the property,” Mr Kestal said.
“A similar trend occurred in 1990-1991 when sellers were forced to accept significantly lower selling prices for their homes because they listed the property for sale in 1989 following the housing boom when expectations for selling prices where very high.”
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