Burbs Vendors Opt for Slash 'n Burn

I wrote in an earlier blog that vendors were now beginning to slash offer prices (o/p) to try and move their properties and that this could herald the start of a “race to the bottom”. It's certainly a situation to keep an eye on, so I've highlighted some examples:

54 Rakeevan Road, Graceville: original o/p $899k …. Now "$829k to $849k"

25 Morley Street, Chelmer: original o/p $1.3m+ …. Now Buyers over $1m

111 Nelson Street, Corinda: original o/p $1.2m …. then $980k, now Auction

116 Hilda Street, Corinda: original o/p $1.2m+ …. Now $1.05m

90 Long Street West, Graceville: original o/p $895k … now $839k

19 Clara Street, Corinda: o/p $770k …. Now $700k+

17 Clara Street, Corinda: o/p $830k …. Now $600k+  (ouch)

59 Kew Road, Graceville: o/p $895k …. Now 800k+

82 Clewley Street, Corinda: o/p $899k …. now $860k

49 Quarry Road, Sherwood: o/p $795k …. Now $735k

20 Egmont Street complex, Sherwood: multiple dwellings for sale – lower prices assured.

Difficult to see any of the above price adjustments having the desired effect (apart from 17 Clara St) but I stand to be corrected. There are numerous sellers who are sticking for now with their original prices (in the hope of a recovery), but if they’re serious they too will need to consider a chunky haircut. The problem is that, when buyer confidence evaporates, it becomes difficult to sell anything but the top line stuff, so it becomes a choice between ‘retreat’ or ‘slash to sell’.

In a previous blog I related the tale of a friend who commented at a BBQ one evening, after the sale of a Mortlake Street block in winter 2010: “Well, that’s it then, a new benchmark price for land has been set in this area.” The inference here was that the benchmark was more a high-water mark. Sadly, however, it doesn’t work on a high-water mark basis and new benchmarks do get set on the down-side as well as the up. This we will undoubtedly see across the board over the coming 12 to 18 months. 

P.S. In the past 24 hours there has been an increase in the number of properties on the market in the Western suburbs and Surrounding areas of 27 i.e. from 568 to 595 (according to realestate.com.au). This doesn't include all properties on the market, of course, so the real number is much higher. Given that properties are selling in this area at an average rate of about 2-3 per week, I might suggest we all write to Julia Gillard to request she send some well-heeled immigrants to this neck of the woods post-haste to help mop up the rapidly burgeoning supply. Or perhaps Mike Matusik could put his money where his mouth is and step in to catch the proverbial "falling knife".