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By Melissa Heagney

February 9, 2019

Relisting for sale: Vendors change their approach as Melbourne house prices drop
Todd Rowson sought the advice of property experts before putting his Tootgarook investment property on the market. Photo: Norm Oorloff

Relisting for sale: Vendors change their approach as Melbourne house prices drop

Home owners are relisting properties that earlier failed to sell, dropping their asking prices or making minor upgrades to attract buyers as Melbourne’s housing market weakens.

Some vendors who see their homes languish on the market are making the tough decision to switch agents and lose thousands of dollars in fees already paid. 

It comes as a chorus of pundits have been downgrading their outlooks. This week Commonwealth Bank economists were the latest to cut their forecasts, tipping Melbourne prices to drop 13 per cent peak-to-trough.

Wendy Chamberlain from Chamberlain Property Advocates said vendors were finally catching up to the market, acknowledging they needed to be more realistic on prices and work on their homes to stand out from the crowd.

“I’ve been seeing this for the past 12 to 18 months where an agent will have a property on the market and they’re trying to sell it for an unrealistic price because that’s what the vendor wants,” Ms Chamberlain said.

Financial advisor Todd Rowson. Photo: Norm Oorloff
Financial advisor Todd Rowson. Photo: Norm Oorloff

“They [over]cook the campaign and what the vendors do is blame the agent.

“[Then they] change their agent – and put it back on the market for a more realistic price.”

She said unrealistic vendors could end up paying thousands of dollars in marketing fees for very little. In one instance, a vendor paid $8000 for marketing their home in Ascot Vale that didn’t sell and it’s now being offered off-market. 

Ms Chamberlain said some vendors were now spending money on simple cosmetic upgrades, such as painting or decluttering furniture to make houses stand out before listing them.

Nelson Alexander Pascoe Vale’s Cody Bettanin said in the slowing market, it was more important than ever for vendors to stand out with a good looking property.

Although vendors have always prepared homes for sale with simple strategies such as a fresh coat of paint, “it’s far more important now than ever before,” he said.

He said a home in Pascoe Vale that was listed late last year but did not draw interest from buyers. After the overgrown gardens were cleaned up and the home decluttered of furniture over the Christmas break, and some of the photos on the online listing updated, the property sold in January.

Others were happy to spend for bigger improvements to ensure a sale.

Financial advisor Todd Rowson sold an investment property in Tootgarook on the Mornington Peninsula midway through last year, as Melbourne’s boom started to slow. 

To avoid relisting, he sought the advice of property experts to make changes to the home he bought for $627,000 in 2016. 

“I was trying to get it right the first time,” Mr Rowson said.

The fibro shack was revamped with a few walls being knocked down, a bathroom/laundry reconfigured and an en suite added. He also paid for landscaping.

The total refurbishment costs were around $100,000. When it sold at auction, the three-bedroom home went for $915,000.

With the weakening market, buyers have been taking their time to consider their options, while the process of getting a home loan has slowed amid a regulatory crackdown on bank lending and the financial services royal commission.

Vendors are having to make their homes stand out, feeling the pressure of competition as more properties stay on the market longer.

Across Melbourne, total stock was up by 39 per cent in January compared to a year earlier even though new listings were down by 20 per cent over the same time period, as some listings languish for longer. 

Some regions are seeing even bigger jumps, with Melbourne’s north-east posting a 71 per cent lift in total stock on the market, while the Mornington Peninsula was up 57 per cent and the west up 46 per cent.

Only Melbourne’s outer east had a lift in new listings, by 9 per cent.

Melbourne home and apartment listings January, 2019
Region (new listings) YOY 
Inner Melbourne -29%
Inner-east -23%
Inner-south -35%
North-east -7%
North-west -40%
Outer-east 9%
South-east -22%
West -17%
Mornington Peninsula -4%
Melbourne total -20%
Region (Current total stock) YOY
Inner Melbourne 10%
Inner-east 20%
Inner-south 31%
North-east 71%
North-west 43%
Outer-east 58%
South-east 43%
West 46%
Mornington Peninsula 57%
Melbourne total 39%
Source: Domain

Adrian Kay from Douglas Kay Real Estate Sunshine said street appeal was one of the most important things for vendors to consider.

“It’s what I always advise,” Mr Kay said. “It’s like nail polish. Dressing it up can make a property far more appealing.”

Greville Pabst from WBP Group, who advised Mr Rowson on his property purchase and sale, agreed.

“Cut the lawn, trim bushes and trees, replace an old letterbox, repaint the fence and plant some flowers – it can instantly make the home feel welcoming for potential buyers,” he said.

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