Home Insights PropTrack Off-Market Sales Performance Report – July 2023

PropTrack Off-Market Sales Performance Report – July 2023

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A detailed analysis of the sale prices of homes sold off-market compared to the sale prices of homes posted on realestate.com.au shows that homeowners who choose to sell their homes off-market achieve lower sale prices.

On average, homes sell for 4.3% less off-market nationally. In Sydney, the price difference is estimated to equate to over $60,000 on average. In Melbourne, the average homeowner risks selling nearly $30,000 of his off-market. *

Off-market it sells for an average of 1.2% less. However, in Sydney he sells for 2.8% less. This is a big difference for many sellers.

In regions priced above the 2022 national median home price, homes sold off-market missed the price by an average of 5.0% or more. However, losses for sellers in low-price regions are still above 3% on average, resulting in significant losses for sellers.

Deciding to sell outside the market can cost a lot. While some sellers may try to save costs by not advertising online, this analysis shows that the potential revenue lost at the final sale price far exceeds the initial cost of advertising.

These results are based on sales figures for 2022, when home price growth slowed sharply and fell in many areas. These may be a conservative estimate of the cost of an off-market sale in the current market conditions, where strong buyer demand for realestate.com.au relative to available supply drives prices higher in most markets.

The study highlights the potential significant financial impact on a vendor’s selling price when selling off-market, as well as the benefits of reaching the largest buyer base with online listings.

Merchants in New South Wales, Queensland and Western Australia hit hardest by off-market sales returns

Home sellers in New South Wales lost more than 4% of their average selling price due to going off-market, while in Queensland and Western Australia the difference was more than 3%.

Here are the prices for off-market home sales compared to home sales listed on realestate.com.au in 2022:

  • Sydney down 4.3%, NSW region down 10.3%
  • Melbourne down 2.6%, Victoria down 6.3%
  • Brisbane down 3.6%, Rural Queensland down 4.2%
  • Perth down 4.9%, Western Australia down 5.8%

Sydney Seller Misses Over $60,000

The findings suggest that sellers, on average, achieve better overall results by listing their properties online using open sale campaigns.

The average potential loss from off-market sales is often in the tens of thousands of dollars. In Sydney, Melbourne and Brisbane, the price is likely to exceed his $25,000, and the higher prices in Sydney could result in even bigger losses for sellers.

In all regions, the average price difference to off-market sales was well above the general listing cost, suggesting that most sellers could make more money selling through marketplace campaigns despite the listing cost.

Out-of-market performance is worst in high-price regions

During a period of slowing real estate price growth in 2022, off-market sales performed worst in areas with median values ​​above the national median of about $725,000. In these regions, off-market sales prices were more than 5% lower than those listed on realestate.com.au.

Higher price regions tend to have larger transaction volumes, so the dollar cost for sellers in these regions can also be higher.

Areas with median or below median house prices in 2022 suffered smaller losses.
There is also off-market sales, but it is still estimated at over 3%. This means that the seller has waived a large amount of money.

analytical approach

This analysis uses a hedonic regression model to estimate the difference in average sales price to off-market sales in 2022 for homes and units listed on realestate.com.au.

Definition of “off-market”

For the purposes of this analysis, we define “out of market” as all sales that do not match the listings on realestate.com.au. This includes various sales methods, such as exclusive listings on alternative platforms.

*Based on average price difference between off-market home sales and homes sold on realestate.com.au in each metropolitan area in 2022. The price difference does not include marketing costs.

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