As the Australian property market shows signs of cooling, there’s been a noticeable rise in vendor discounting, indicating that sellers are finding it harder to secure buyers without negotiating on price. According to CoreLogic’s latest data, vendors across the country had to offer a median discount of 3.7% during the July quarter to achieve a sale, a slight increase from the 3.6% discount recorded in June.
This increase in discounting reflects the current slowdown in capital gains, with vendors needing to be more flexible in their pricing to attract buyers as market conditions shift. CoreLogic noted, “The recent increase mirrors the current slowdown in the pace of capital gains, suggesting vendors are now having to negotiate a little more to secure a sale as heat leaves the market.”
The extent of discounting varies between regions, with capital city vendors offering a median discount of 3.3%, while regional vendors had to offer a larger discount of 4.0%. This pattern aligns with the general trend that hotter markets, where demand outstrips supply, typically see less discounting, while cooler markets require more negotiation.
In terms of individual capital cities, the median vendor discounts during the July quarter were as follows:
- Perth: 2.5%
- Brisbane: 2.9%
- Sydney: 3.4%
- Melbourne: 3.5%
- Canberra: 3.7%
- Adelaide: 3.9%
- Hobart: 4.1%
- Darwin: 5.0%
These figures highlight the varying degrees of market cooling across different regions. For instance, Perth and Brisbane, which have been experiencing stronger market conditions, saw lower levels of discounting compared to cities like Darwin and Hobart, where the market is relatively cooler.
As we move further into the year, it will be interesting to see how these trends evolve, particularly as economic conditions and buyer sentiment continue to fluctuate.
