Australia's Property Pricing Puzzle: Are properties selling for expected prices?

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New data by online property sales platform, Openn, has highlighted the challenges of pricing property in Australia.

In our latest "The Property Pricing Puzzle Report" Openn analysed February sale prices across 6 states and compared them to the expected sale price range.

The results found around 33% of the residential properties sampled sold for a price within 10% of a model price estimate. Interestingly, Tasmania had the highest proportion of sales below expectations (70%), while South Australia had the highest proportion of sales above expectations (17%).

The expected selling price was determined based on a computer generated price estimate, which matches properties using an algorithm that emulates how a valuer works. We then compared this estimate to the agent-advised sale price.

In most cases we expect up to 45% of sales to fall within 10% of expected prices under normal market conditions. When we see a smaller percentage, it can highlight a disconnect between buyer demand and seller expectations.

Openn’s Managing Director, Peter Gibbons, says digital sale processes can help agents and homeowners navigate the pricing challenges of a shifting property market.

"Unfortunately, many of the free estimate tools used by agents and sellers to help set prices aren't keeping pace with market conditions and buyer demand. In these circumstances, digital sales processes that allow buyers to compete transparently until true market value is achieved can be really powerful.

“That's why Openn is so effective. Buyers submit offers digitally in real-time – providing live feedback of how the market is pricing the property. Agents can then leverage transparency settings to show where their price stands amongst other competing buyers. This social proof encourages buyers to put their highest offers forward and helps the seller extract the best possible price from the market.”

For more information, download the February report here.
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