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Vendor discounting

Discussion in 'Real Estate' started by Jacque, 9th Jan, 2008.

  1. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    Latest Jan 2008 news update from RPData shows that Darwin and Canberra appear to be the hottest housing markets, if you rely on vendor discounting statistics to demonstrate a trend. Taken from their most recent Pulse publication, see below:

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    Because RP Data tracks virtually every property currently for sale in the Australian real estate market, we can provide detailed statistics about how the market is tracking. One of the most interesting statistics is the average level of vendor discounting in the market. ‘Vendor discounting’ is the average difference between the original asking price of a property and the ultimate selling price. A very ‘hot’ market will typically have a very low level of discounting; due to the high demand for dwellings vendors hold most of the power and will be reluctant to negotiate significantly on the price. Conversely, in a slow market the level of discounting will be higher as power shifts to the buyer. The table below shows the average level of discounting in the market for each capital city during the month of November:


    Average level of vendor discount
    Sydney Houses: 5.3% Sydney Units: 5.2%
    Melbourne Houses: 7.4% Melbourne Units: 8.4%
    Brisbane Houses: 4.4% Brisbane Units: 6.4%
    Adelaide Houses: 4.4% Adelaide Units: 4.2%
    Perth Houses: 5.9% Perth Units: 5.2%
    Darwin Houses: 2.7% Darwin Units: 2.8%
    Canberra Houses: 2.4% Canberra Units: 5.2%

    Interesting figures and clearly showing that Melbourne appears to be off the peak, if the discounts are increasing in size. Then again, with Melb being the Auction capital of Australia these figures may not be entirely accurate either.