Even discounted properties could still be overpriced: SQM Research
A heavily discounted property might not necessarily represent a bargain, warns SQM Research director Louis Christopher.
Although every property on SQM's list of top 10 most discounted properties in Australia has had a significant amount knocked off its asking price, Christopher says some may still be overpriced.
"Just because the dollar figure of a property is low and it has been dramatically discounted doesn't necessarily mean a home is good value for money," Christopher says. "Depending on the location, the quality of the house itself and the land size, some properties may still be overpriced, even if they have already been discounted by over 30%."
He says when vendors are unwilling to meet the market properties will linger, unsold, for months – even years.
"All you have to do is look at our long-standing number one on our top 10 list (588 White Beach Road, White Beach, Tasmania), which has been on the market for over 500 days and has been reduced by $380,000, to realise that sometimes both vendors and agents get the price of a home excessively wrong," he says.
"To add insult to injury, this error is then often used as a marketing tool – and we commonly see property's advertised as being 'HUGELY REDUCED TO SELL' when the underlying fact of the matter is that the property has only been discounted to what it should have originally been priced at."
Christopher recommends disregarding asking prices and instead focusing on what comparable properties actually sell for to figure out if a property is overpriced or has met the current market.
1
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: 553
2
92 Beelong Street, Macleay Island, Queensland, 4184
On the market since: May 23, 2010
Initial asking price: $590,000
Current asking price: $340,000
Reduction: 42%
Days on market: 552
3
102 Fountain Road, Burpengary, Queensland, 4505
On the market since: April 17, 2011
Initial asking price: $1.2 million
Current asking price: $699,000
Reduction: 42%
Days on market: 225
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: 872
5
329 Waterford Road, Ellen Grove, Queensland, 4078
On the market since: October 16, 2010
Initial asking price: $1,275,000
Current asking price: $800,000
Reduction: 37%
Days on market: 406
6
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: 484
7
1302 Birkdale Place, Magenta, NSW, 2261
On the market since: June 17, 2008
Initial asking price: $700,000
Current asking price: $450,000
Reduction: 36%
Days on market: 1,257
8
53 Fairview Avenue, Croydon North, VIC, 3136
On the market since: April 2, 2011
Initial asking price: $600,000
Current asking price: $395,000
Reduction: 34%
Days on market: 238
9
2 Brecknock Road, Strathalbyn, SA, 5255
On the market since: January 29, 2011
Initial asking price: $280,000
Current asking price: $185,000
Reduction: 34%
Days on market: 301
10
27 Shaws Pocket Road, Cedar Creek, Queensland, 4207 (pictured)
On the market since: August 15, 2011
Initial asking price: $1.19 million
Current asking price: $799,000
Reduction: 33%
Days on market: 105
SQM Research also offers a list of the Top 100 Biggest Bargains in Australia for sale.