Property stock levels masked by off-market deals
The amount of housing stock effectively in the market could be substantially higher than advertised online due to the surging number of unlisted homes offered for sale, buyer's agents say.
Melbourne-based buyer's agent Cate Bakos said since March, her buying agency had seen the amount of off-market properties jump by about 50 per cent as more vendors refuse to pay thousands of dollars to list online amid a weakening market.
"It's gone through the roof," she said. "There's a substantial amount of property being offered for sale that is not listed online. My best guess is, it accounts for at least 50 per cent of properties.
"Vendors are reluctant to spend money to list online at the moment because it's quite expensive and they're not seeing the value in it due to the restrictions and weaker market."
In Brisbane, buyer's agent Zoran Solano, of Hot Property Buyer's Agency, said he was also seeing a large jump in off-market deals.
"I would say good agents will have about 50 per cent of their stock being sold off market at the moment. Usually they only have 20 per cent," he said.
Sydney-based buyer's agent Lauren Goudy, of Rose & Jones, said the agency has recorded about a 45 per cent increase in off-market properties added to its database since the onset of COVID-19.
"Vendors are opting to sell off market because it gives them discretion and anonymity, especially if they are forced to sell," she said.
Sydney buyer's agent Amanda Gould, of Highspec Property, said up to 35 per cent of properties being sold in the area she operates in were not listed on Domain or Realestate.com.au.
"Off-market properties have risen right across the city, in the east, north, inner west and the northern beaches, and in all price points," she said.
"A lot of sellers just want a quick sale and they don't want to pay for marketing and risk having a campaign fail."
But due to the nature of off-market transactions, there was no readily available data to accurately gauge the volume of properties changing hands privately.
"From a data perspective, we don’t have any visibility of how many homes are being advertised off market. However, I wouldn’t be surprised to see more vendors opting to sell their property without a traditional advertising campaign," said CoreLogic's research director Tim Lawless.
"With selling conditions becoming more challenging, there is a likelihood that homes will sit on the market for longer. Homes with a long time on market can attract low-ball offers and make it harder to negotiate the best possible price."
An off-market campaign probably also points to less willingness from vendors to commit to selling their home at a time when selling conditions were tough, said Mr Lawless.
"A behind the scenes campaign based on firm pricing expectations, together with a well-connected real estate agent, is a legitimate way to avoid vultures and tyre kickers, as well as protecting any future sales campaigns from an unsuccessful listing history," he said.
So far, CoreLogic has recorded a significant increase in new listings over the past 28 days to April 19.
Sydney added 4548 new listings, Melbourne increased by 4980 homes and Brisbane expanded by 2956.