When buying or selling property in Melbourne, it pays to understand what sort of market you’re transacting in. If you’re buying in a buyer’s market, you have the upper hand when it comes to negotiations. And if you’re selling in a buyer’s market, you need to have realistic expectations. So what are the key factors that experts use to determine the ‘buyer’ or ‘seller’ status of the market?
Supply vs demand is always the key indicator. In Melbourne we’re seeing greater housing supply than demand, that is more homes for sale than there are buyers. This provides buyers with more options while sellers face more competition, so the upper hand is with buyers.
Low auction clearance rates – currently hovering around 47% in Melbourne – means more homes are passed in, which suggests unrealistic vendor pricing or more homes, less buyers.
The other key statistic that experts use to analyse the market is called Days on Market (DOM). Melbourne properties are taking longer to sell at present, compared to the average days on market nationally. When homes are are the market for longer it means there is less pressure on buyers, and sellers need to drop their price, delist their property, or remain on the market indefinitely.
When you see those factors combined, it is the best time to buy!
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By Wendy Chamberlain
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