Vendors trying to sell properties at prices above the current weak market demand are "wasting everyone's time", a property analyst has stated.
With housing demand and credit growth sluggish, SQM Research managing director Louis Christopher has urged vendors to have more realistic expectations. He told Your Investment Property's sister title Australian BrokerNews the Melbourne market in particular currently has an oversupply of housing, and that many vendors have yet to adjust their expectations to this.
"A lot of stock on market is not selling. It’s just piling up. Lots of vendors are still trying to sell at an inflated asking price. That’s meant less sales have been achieved," Christopher said.
Christopher stated that, as of the end of July, the Melbourne market had 43,000 listings. He said this was a greater overhang of stock than the previous record set during the GFC in 2008.
"It’s going to take awhile to clear this overhang. We’ll need a sudden increase in demand to absorb it all. We saw a little bit of this back in ’08 when Sydney had a bit of overhang. It went very quickly as buyers snapped up some properties and sellers took others off the market," he remarked.
But sellers have yet to react to this, Christopher said. He said unrealistic price expectations were leaving many vendors "frustrated", and urged vendors to either readjust their expectations or remove stock from the market.
"Vendors who really aren’t that keen to sell and have properties listed above the market are foolish, because they’re wasting everyone’s time and money. They’d be far better off either meeting the market or withdrawing their property," Christopher commented.
With increased buyer access to valuation and research tools, Christopher said vendors can no longer get away with inflated asking prices.
"The days of finding some poor sucker to pay an inflated asking price are gone," he said.
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