Properties on the market too long become problem listings: SQM
SQM Research director Louis Christopher says properties that have been on the market too long often develop a "stigma" that is often unwarranted. He says properties that make SQM's Top 10 Most Discounted Properties list are often high-quality homes that were overpriced at the outset of their marketing.
"Unfortunately in some cases, the main factor determining lack of sale initially was an overinflated asking price rather than any issues pertaining to quality," Christopher says.
He points to the fifth property on SQM's discount list, 1/21 Ocean Drive, North Coogee, WA (pictured), whose price has been reduced from $2.7 million to $1.6 million during the 420 days it has been on the market.
"This property has been advertised as owing the owner a total of $2,450,000 plus stamp duty, yet went from being priced at $2,700,000 to now asking $1,600,000 -and furthermore, the vendor is so desperate to sell that they are willing to trade for other real estate!" Christopher says.
He says the deep discount does not necessarily reflect the property's worthiness.
"Properties such as this do have to potential to develop a stigma, due both the lack of buyer interest and the massive price slashes, and unfortunately it can become almost a catch 22 for these vendors who may have sold their home sooner had they their asking price been more reasonable initially or had the market been more favourable to the type of property they are attempting to sell."
1
1 Flora Street, Midland, WA, 6056
On the market since: August 16, 2009
Initial asking price: $1.9 million
Current asking price: $850,000
Reduction: 55%
Days on market: 701
2
588 White Beach Road, White Beach, Tasmania, 7184
On the market since: May 23, 2010
Initial asking price: $780,000
Current asking price: $400,000
Reduction: 49%
Days on market: 420
3
1350 Wynnum Road, Tingalpa, Queensland, 4173
On the market since: November 6, 2010
Initial asking price: $700,000
Current asking price: $380,000
Reduction: 46%
Days on market: 252
4
3 Boolari Road, Gosford West, NSW, 2250
On the market since: July 8, 2009
Initial asking price: $990,000
Current asking price: $580,000
Reduction: 41%
Days on market: 738
5
1/21 Ocean Drive, Coogee, WA, 6166
On the market since: May 23, 2010
Initial asking price: $2.7 million
Current asking price: $1.6 million
Reduction: 41%
Days on market: 420
6
232-234 High Central Road, Macleay Island, Queensland, 4184
On the market since: January 11, 2009
Initial asking price: $279,000
Current asking price: $175,000
Reduction: 37%
Days on market: 917
7
25 Vicary Street, Triabunna, Tasmania, 7190
On the market since: August 2, 2010
Initial asking price: $299,000
Current asking price: $189,000
Reduction: 37%
Days on market: 350
8
290 Viveash Road, Swan View, WA, 6056
On the market since: June 5, 2008
Initial asking price: $2.29 million
Current asking price: $1.5 million
Reduction: 34%
Days on market: 1,138
9
3 Zelma Court, Macleay Island, Queensland, 4184
On the market since: May 23, 2010
Initial asking price: $380,000
Current asking price: $250,000
Reduction: 34%
Days on market: 419
10
46a Stock Road, Attadale, WA, 6156
On the market since: March 23, 2010
Initial asking price: $2.69 million
Current asking price: $1.79 million
Reduction: 33%
Days on market: 483
SQM Research also offers a list of the Top 100 Biggest Bargains in Australia for sale.