Expert Advice with Kevin Turner. 26/08/2017

In this podcast with Dr Andrew Wilson, we look at property asking prices nationally, and discuss what are we learning from the asking prices?

Listen to the Podcast Now:



Kevin:  My guest is Dr. Andrew Wilson from the Domain Group.

Andrew, let’s talk about asking prices nationally. What are we learning from the asking prices?

Andrew:  Interesting; we had some press last week with some sales price data that was released, which was a little perplexing at a number of levels because it showed that prices had actually fallen over May.

Kevin:  Is the gap between the list and the sale price increasing?

Andrew:  It can. According to the cycle, of course, or reflecting the cycle, it can move, but the relativities actually remain the same. There’s no doubt, of course, that asking prices are always higher than sale prices, because why would you ask something, unless you’re in a trough of a market?

Kevin:  It’s an indicator if it’s the other way around. Then you know you’re in a booming market.

Andrew:  That’s right, but asking prices… And of course, these are properties that are listed for private treaty, so they’re part of them, and for most capital city markets, that’s the vast majority. Even in Melbourne, which has 30% of its marketed properties under the hammer, you still have 70% that are listed for private treaty.

Kevin:  There’s an interesting point I want to pick up on, because we so often look at the auction market and talk about clearance rates and how the market is going, but in one of the biggest auction markets in Australia, it only represents 30% of the market.

Andrew:  Three out of ten sales, Kevin, and in Sydney it’s two and a half sales out of ten, and that’s up from 15% of the market. And in Brisbane, it’s only 7%.

Kevin:  Why aren’t we tracking clearance rates on private treaty sales, and also days on market? Because you look at days on market at an auction, it’s going to be around about 30 days, give or take a few days, because that’s an auction campaign. Days on market for private treaty are sometimes up to 45 days, and 45 days is a fairly normal market.

Andrew:  Yes, and the point with days on market is you have to have a sale. But with listings data, it’s here and now. Nothing changes, because this is properties that are for sale. And people don’t make mistakes, because we can get mistakes in some of the official sales data.

Kevin:  It depends. Garbage in, garbage out.

Andrew:  Yes, that’s right. But listings people make sure they’re not advertising the wrong price.

Kevin:  Well, they’re publicly listed.

Andrew:  Yes, that’s exactly right. And the point is it’s here and now, it’s not relying upon a sale, so it’s real-time data. I’m now focusing more and more now on asking price data as being a robust insight for the market. As you said, Kevin, it does reflect the vast majority of activity…

Kevin:  More so than auctions, and we try to determine where the market is going by the auction numbers.

Andrew:  We can’t. Not necessarily a pass in; I don’t think it’s the same.

Kevin:  But it’s part of the sales cycle.

Andrew:  That’s right. There’s not the same sort of impetus to sell under the hammer as there is down south. It can, in fact, be an entry point into the sale. So, those 50% clearance rates – which is typically what you do see in Brisbane – in Melbourne or Sydney, you’d be saying that’s definitely a buyer’s market. But no, not in Brisbane, because it’s just a very small snapshot, and not really a reflective snapshot of what’s happening in the wider market, because the wider market is basically 95% of the market.

Kevin:  I used to think that it was a reflection on agents, that agents in Queensland were not as good at the auction market. But I don’t think it is. I think it is a culture and I think in the southern market, Sydney and Melbourne, people are used to buying at auctions. They’re a lot more aggressive about their offers, they try to secure before, they go to an auction with a clear intent to buy.

Whereas in Queensland, you probably go to an auction to try and find out what the market is doing – whether or not it’s going to sell, what the values are.

Andrew:  The auction scenario typically favors inner-suburban high-price properties, and in Melbourne and Sydney, there’s plenty of competition for that sort of property. You have to have competition to make an auction work, because that’s the whole basis. You want lots of people standing on the front lawn.

Kevin:  Hammering it out.

Andrew:  Yes. Blood on the dirt, and all that sort of stuff.

But asking prices, as we said, are robust. We certainly had Melbourne leading the charge up by 4.9% over May. Big boom up there in Melbourne continuing. Canberra up 4.1%. The rest just sort of trailed along. Sydney up 1.1. Brisbane was relatively flat over May, down by just 0.7%.

Kevin:  Sum it up for me, mate. Where is the market headed?

Andrew:  The winter market, which is a quieter period for property particularly down south, and the Brisbane market picks up. Always, Brisbane tends to be second half of the year market. Down south, they have a pause until the spring selling season starts.

And the markets have been easing backwards in both Sydney and Melbourne. We had auction clearance rates down over May in Sydney and down over May in Melbourne as well, but still strong results. Melbourne has got a clearance rate over the four months of 75% and Sydney 71.6%.

So, still strong conditions for sellers. Volumes have been at near-record levels this year, Kevin. We have auction numbers up by 30% in Sydney over the first five months of this year compared to last year, and up by 15% in Melbourne, so plenty of confidence from sellers.

Is it a rush to market? Maybe a little bit of that energy. I think sellers are wanting to take advantage of the still strong conditions, but the X factor in the market will be those stamp duty concessions that come into play from the 1st of July in New South Wales and Victoria.

Will it release a flood of first-home buyers? Of course, they can buy established properties with that discount, which means that they’ll be activating change-over buyers, and we may see that ripple effect with prices rising.

But no doubt that the Melbourne market is the strongest market in the country at the moment. Sydney is easing, but prices are still growing. I think there’s a relief all around that Sydney’s boom now seems to be behind it. But as I said, the X factor, the first-home buyer surge from the 1st of July.

Kevin:  Great having you on the show, mate. Thank you very much for your time.

Andrew:  Always great to be here, Kevin.


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Kevin Tuner worked in radio as General Manager of various east coast radio stations. He started in real estate in 1988 and was ranked in the Top 10 Salespeople in the state until he was appointed as State CEO 1992.

He operated a number of real estate offices as business owner and was General Manager of several real estate offices in Christchurch.

He now hosts a real estate show on Radio 4BC and a weekly podcast at He is the host of a daily 7 to 10 minute podcast show for real estate professionals at

To hear more podcasts by Kevin Turner, click here

Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.