Home buyers may finally be wrestling back some control of the market, as sellers start to drop their asking prices in Gold Coast suburbs for the first time since the pandemic boom.
Latest PropTrack data shows homes in Mermaid Beach, Surfers Paradise and Broadbeach Waters were selling for up to 5 per cent less than the price originally listed.
The data analyzed vendor discounting since last year and found sellers in Bundall, Miami and Paradise Point also accepted lower offers for their houses.
For units, the biggest discounts in April were in Paradise Point, Mermaid Waters and Main Beach.
PropTrack director of economic research Cameron Kusher said vendor discounting would continue alongside slower price growth.
“While higher rates and price falls might discourage vendors from listing, many have seen a significant increase in equity over recent years and they tend to buy and sell in the same market, so while they may not get top dollar for their property, the property they are looking to purchase will have also reduced in price,” Mr Kusher said.
Buyers could expect greater negotiating power in areas where house prices had spiked most over the past two years.
“In areas like Mermaid Beach and Surfers Paradise, you’re seeing some big discounts, and I think it speaks to the fact the movement to coastal markets is not going to be quite as strong going forward,” Mr Kusher said.
With the drive to escape lockdown for lifestyle destinations now gone, most people who planned to move to the Coast had done so already, he said.
“The impetus was there in 2020/2021, and prices were a lot cheaper then too. It’s not that much more affordable anymore.”
Reedy Creek resident James Allen is considering whether to buy the townhouse he rents for $490 a week with wife, Lexy, and their one-year-old son, Benji.
With their rent soon to go up by $100-plus per week, Mr Allen is weighing up the rising cost of taking on a mortgage but doesn’t want to get caught out buying at the height of the market.
“We’ve got a bit of a conundrum,” the 26-year-old manager said.
“We have the capacity to buy, but the market at the moment is overinflated and the current economic outlook in my opinion may not be favorable for home buyers.
“So at the moment, we’re waiting to see what offers come through then make a decision based on that,” he said.
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Latest PropTrack figures show units listed in Reedy Creek spend an average of just 12 days on the market.
It’s one of the fastest-selling unit markets in Australia, and second in Queensland just behind Clear Island Waters.
The three-bedroom townhouse on Gemvale Rd is marketed by Andrew Colley.
REIQ Gold Coast zone chair Andrew Henderson said a continued lack of supply, particularly along the beachside belt, meant properties were still being snapped up fast, provided vendors were realistic in their price expectations.
“In general, the market is holding up quite strong. We’re just not seeing those deals done on Day One as often as what we saw 18 months ago,” Mr Henderson said.
“[Sellers] do need to meet the market. Gone are the days of each sale setting a new record one after the other. The market has definitely seen a leveling.”
Days on market could be expected to increase as buyers no longer felt pressured to act fast or miss out.
“The negotiation is taking longer and buyers are coming back for that second look, bringing their friends and relatives or their builder with them,” Mr Henderson said.
“If they had have done that 12 months ago, they’d probably miss out. Every market has a cycle and yes, the buyers have a little more time on their hands, but even now they don’t have a whole lot of time because stock levels are really low.”
Buyers agent Oliver Dunstan, of Rose and Jones, said the changed political and economic climate had swung the market in buyers’ favour.
“Vendors who have committed to a purchase before listing to sell their current asset are naturally under the most pressure to sell, so opportunity may exist for buyers to negotiate from a position of power in these cases,” Mr Dunstan said.
An increase in vendor discounting reflected an adjustment of unrealistic pricing, rather than falling property values.
“Whilst certain pockets of the Gold Coast, and the country, are experiencing a genuine retraction in values, a lot of vendors are listing with expectations that are out of line with current market sentiment and buyer appetite,” Mr Dunstan said.
“Whilst some properties may appear to be discounted when they eventually trade, they are often selling at the price they should have been marketed at in the first place. So an advertised price drop may simply be the vendors and agents coming back to reality with their pricing.”
Mr Dunstan said Qld was well-placed to ride out the current market correction and progress to continued growth.
“I am a firm believer that the interstate and international migration to the Gold Coast and southeast Qld in general, coupled with the infrastructure projects in place to support this population growth as well as the upcoming Olympic Games, will see these markets well protected from the issues brought on by rising interest rates, global politics and inflation” he said.
“The challenges faced by building and development sectors will put a hard cap on supply over the next few years, meaning established stock will be in high demand, and the historically low vacancy rates and attractive returns on offer will ensure the investor market remains firm too .”
SUBURBS WHERE SELLERS ARE DROPPING THEIR PRICES