Demand strongest for properties under $500,000

Demand strongest for properties under $500,000

www.switzerbroker.com.au
21st February, 2012

Demand is strongest for properties priced under $500,000 according to the RP Data weekly Property Pulse.

Research analyst Cameron Kusher says "the most expensive properties are not necessarily going to be the most lucrative to sell for agents".

"Slower market conditions coupled with a fall of -3.6 per cent in home values across Australia's combined capital cities over the 2011 calendar year as well as less buyer activity has made it much harder for property sales," he says. "To add to this, the once lucrative premium end of the housing market has experienced greater value falls than those recorded for more affordable property types."

Data from RP Data shows most property sales in capital cities have been between for those between $300,000 and $400,000, accounting for 23.5 per cent of all sales in this price band.

In 2011, 58.4 per cent of all home sales were priced between $300,000 and $600,000. Properties priced at more than $1 million accounted for 7.8 per cent of all sales.

Sales of homes between $400,000 and $500,000 had the biggest total value of sales, RP Data says, accounting for 16.6 per cent of the total market. This price range also accounted for 21.2 per cent of the total volume of sales.

"This suggests that this is a market which is both attractive for purchasers and potentially most lucrative for sales agents," says Kusher.

The results also revealed properties that cost between $1 million and $2 million represented 13.9 per cent of the total value of all sales.

By capital city, properties priced between $400,000 and $500,000 account for the greatest total value of sales in Melbourne with 16.3 per cent, Brisbane with 22.2 per cent, Perth with 19.5 per cent, Darwin with 24.6 per cent, and Canberra with 27.1 per cent.

The $300,000 to $400,000 price point accounted for the greatest total value of sales in Adelaide with 23.7 per cent, and Hobart with 26.4 per cent. In Sydney, the $1 million to $2 million price point accounted for the biggest total value of sales with 19.3 per cent.

"Our results highlight that with home values falling and sales volumes at below average levels, property professionals need to understand where the strongest level of demand exists if they want to maximise their earning potential," says Kusher.

"For vendors, this means that they now need to have an understanding of the true value of the home and subsequently, what level of demand there exists at that price point.

"Higher price points will typically experience a lower pool of potential buyers and in the current market are likely to prove harder to sell."