Why buyers aren’t buying, despite favourable market conditions

Would be buyers are going through the process of home loan pre-approval & then finding themselves unable to take advantage of favourable market conditions because they are struggling to find suitable properties.

Recent data from REA Group shows that home seekers are finding it difficult to purchase in a reasonable timeframe, despite an increase in Spring listings and a drop in buyer competition, due to a lack of suitable stock being available.

Many buyers are also taking significantly longer than they should to make a purchase, with the average time between first enquiry to exchange of contracts being a huge seven (7) months.

REA research showed that, on average, buyers missed the first five properties they made offers on. The result was that many ended up overpaying and compromising to stop the fight.

“Inexperienced buyers often don’t move fast enough, so they get outmanoeuvred by their competition,” Scott Aggett from REA said.

“Secondly, they don’t ask enough of the right questions. As a result, they then make very conditional offers or push for a contract that won’t suit the seller’s time frame.”

Other buyers panic when they can’t find their perfect property and begin compromising on their wish list, Mr Aggett said.

In addition to this, one of the biggest issues right now is the lack of quality stock on the market, due to sellers being too afraid to act in current market conditions.

This can be for a variety of reasons, including the cost of marketing a property on line for an uncertain result.

In order to list and sell a $3,000,000 home in the Eastern Suburbs of Sydney, costs to the vendor can push $100,000 very quickly.

For example:

• Property Styling – $15,000
• Photography – $1,200
• Maintenance, painting & getting “sale ready” – $10,000
• Realestate.com.au & Domain.com.au listing: $8,000
• Agent commission: $60,000

This can mean that vendors who do not need to sell in current market conditions may hold onto their properties until perceived conditions improve; leading to a lack of stock, and thus pushing would be buyers into B & C grade properties.

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Matt Spooner
0452 261 642