One of the more interesting property market metrics tracked by CoreLogic RP Data is the average vendor discount.
It shows the difference between the advertised price and sale price.
It only applies to homes sold through private sale and those that had an advertised price.
If the vendor discount is very high it shows that either demand is soft in an area, the vendors expectations are too high, or a combination of both.
For a house in the Melbourne metropolitan area the average vendor discount in the most recent 12 months was -5.6 per cent.
This does contrast to auctions where the sale price tends to be above advertised price.
This can therefore be very useful information for buyers as it can help them make a judgement about how much to offer.
Likewise for sellers it can help them set a realistic sale price.
In the twelve months ending 30 November (the most recent and comprehensive data) the top 10 suburbs when ranked by the size of the vendor discount were mostly south of the Yarra and around the metropolitan median. Top of the list was Springvale where the vendors had to discount their desired sale price by 15.3 per cent.
Other suburbs in the outer east where vendors’ house price expectations were overpriced for the market conditions were Wantirna, Ringwood East, Springvale South, Bayswater and Bayswater North.
Five years ago the most remarkable difference was the prevalence of million dollar suburbs. Half the list had a median house value in excess of a million dollars which reflects the soft market conditions at the time.
*The above analysis is based on detached houses over the twelve months ending 30 November