What is discounting, can I really bag a bargain?

For vendors, setting the right asking price is a hard task, particularly if a market is progressing with pace, irrespective of whether that movement is up or down. An asking price too low can mean missing out on a significant amount of dollars, a price tag too high can turn away prospective buyers. It is an art of finding market balance.

Discounting occurs when a vendor accepts a figure below the initial advertised price. Vendors can be presented with a low offer early on, and then must decide whether to accept and have a speedy sale, or wait for a higher figure. Under slow market conditions, vendors can become agitated, and in haste they jump on the first offer.

Under strong market conditions, certain homes can exceed vendor and agent expectations. In a seller’s market, it is not unusual to have a number of interested parties, creating competition that drives the figure higher.

Robust housing conditions have propelled Canberra’s house and townhouse prices forward. Despite this, all regions of Canberra recorded some level of discount. While it is wrong to assume that this impacts all property, it is correct that discounts can be found – you just have to look hard enough.

A study of houses (including terraces and townhouses) sold by private treaty over a 12-month period to the end of July 2017, reveals the average price discounts across Canberra’s regions. The Inner South had the highest figure, where the final sale price was 8.4 per cent below the asking price of homes when they first hit the market.

Weston Creek vendors accepted 8.1 per cent below the asking price, and the Inner North had prices discounted by 5.6 per cent. On average, properties were discounted in Belconnen by 4.4 per cent, in Gungahlin by 4.3 per cent, in Woden Valley by 3.8 per cent, and in Tuggeranong by 3.7 per cent.

Ultimately, the asking price of any home is an estimate, determined by detailed analysis of comparable, recent sales. It is important to keep track of the market throughout a selling campaign. If there is one truism in real estate, it is that a home is only worth what someone is willing to fork out.

This is unlike most other goods and services that have a fixed price. No one negotiates at the petrol pump or supermarket, as tempting as that may be.