$1m discounts: dialled in Aussies’ mega savings

Clued up Aussies are saving millions of dollars on one of the most important things in their lives. This is where and how.

Homeowners are slashing prices on properties for sale across the country, with buyers bagging discounts of up to $1m in some cases.

Vendor discounting is ramping up as a buyer’s market emerges in certain areas in the wake of increasing mortgage stress and more realistic seller expectations.

Home seekers are bagging properties for an average of up to 15 per cent below the list price in pockets of Sydney, with some huge discounts helping buyers save over $1m, with more discounts expected to come as spring listings pile up.

There are bargains out there.

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Melbourne homebuyers can get discounts as high as 13 per cent, with houses in Safety Beach, Roxburgh Park and Hampton Park recording average price drops of between 13.4 per cent and 9.2 per cent.

Those looking for a unit should consider Malvern East, Clayton and Hadfield, where the price being sought initially can drop more than 10 per cent.

In Queensland, sellers are reducing asking prices by hundreds of thousands of dollars — or up to 32 per cent in some cases — as spring listings begin to rise.

Data provided exclusively by SQM Research reveals the state has more than 1600 distressed listings — the highest in the country, with discounted properties ranging from a house in Shailer Park that has had its price cut by $250,000 to a unit in Airlie Beach that is now $155,000 cheaper.

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You just gotta know where to look. Picture: Lyndon Mechielsen/The Australian

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SQM Research director Louis Christopher said the higher supply of listings had been coupled with a recent drop in buyer demand following the Reserve Bank’s hesitancy to cut interest rates.

“There were a lot of would-be buyers who were waiting for a cut that would be pulling out of the market now that a cut looks unlikely this year,” he said.

Digital Finance Analytics director Martin North said there was evidence of “deeper drops” in asking prices as listings began to rise.

“Five to eight per cent vendor discounts seem common, and more at the top end of the market — 15 per cent in some cases, which is very different from a year ago,” Mr North said.

“We are also seeing more ‘forced’ sales due to mortgage pain/arrears, where vendors have to sell.”

Rethink Residential Group CEO Scott O’Neill said it was unlikely mortgage holders who were facing difficulties would find relief in the near future, which may compel some to sell their homes.

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This two-bedroom unit at 27/16 Golden Orchid Dr, Airlie Beach, has had its price reduced by $155,000.

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“Most borrowers are managing to keep their mortgage payments on schedule, however, recent data from APRA indicates that mortgage arrears are on the rise, though they remain low compared to pre-Covid levels,” Mr O’Neill said.

Mortgage arrears — consisting of non-performing loans and borrowers who are 30 to 89 days late on payments — now account for 1.6 per cent of home loans.

It comes as RBA Governor Michele Bullock warned her “message on interest rates is not what many borrowers want to hear” especially “as labour market conditions ease, more households will experience a strain on their finances from unemployment or reduced working hours.”

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Ms Bullock said RBA estimates around 5 per cent of owner-occupiers were “in a particularly challenging situation, where the combined total of their essential spending and scheduled mortgage repayments is more than their income”.

“Some may ultimately make the difficult decision to sell their homes,” she warned, with lower income borrowers “over-represented in the group of people who are really struggling.”

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Originally published as $1m discounts: dialled in Aussies’ mega savings