Why people with $1.5 million homes are ‘unhappy’

People living in NSW who own properties worth more than $1.5 million are among the unhappiest in the country.

Altona Meadows is the “happiest” place in Australia.

The western Melbourne suburb has the highest number of homeowners who sold their properties for more than they were expecting, according to data from RateMyAgent.

The real estate agent review website asked 30,000 sellers over the past two months whether their sale price was in line, above or below expectations, with 63 per cent saying they were satisfied, 31 per cent happy and just six per cent unhappy.

The Perth suburb of Canning Vale was the “unhappiest” place, reporting the highest percentage of homeowners who sold for below their expected price, followed by Bundeena and Castle Hill in NSW.

In general, the more expensive the property, the less satisfied the owner was with the sale price. NSW homeowners were the least happy, reporting the highest levels of below-expectation prices.

That was consistent with the Sydney property market coming off the most — prices are now down 8.2 per cent from their peak in August last year — and “the most pain” is being felt around the $1.5 million price level.

“In dollar terms the growth has had a much greater effect at those higher price points, so now the market’s coming back a bit, I think psychologically people are looking at the dollars and thinking, ‘Wow, I’m missing out’,” said RateMyAgent co-founder Mark Armstrong.

“When a market softens the top end of the market gets hit really hard. That $5-10 million sector, when the market softens there is no market, 0.1 per cent of the population can afford to buy a $5 million property.”

He said the market “finds solid ground” at lower price points. “More people can afford a $500,000 property than a $1.5 million property. In a sense there’s safety in numbers, it’s a stronger market there.”

Homeowners achieving the highest above-expectation prices fell in the sub-$1 million bracket in NSW, $400,000-$600,000 in Victoria and $400,000-$800,000 in Queensland. The happiest sellers were in the ACT, Tasmania and Victoria.

HEART OF THE PROBLEM

RateMyAgent says it wanted to track the “very human” piece of data amid an “oversupply” of information about the property market.

“When you cut away all the fat, you’re left with the main question sellers are most worried about, ‘Did I sell my property for as much as I could?’” Mr Armstrong said. “We wanted to build a metric that was very unique that no one else was capturing.”

The fact that the majority of people sold their property in line with their expectations is “perhaps a reflection of homeowners already adjusting their expectations accordingly” in the softening property market.

Mr Armstrong said real estate agents also played a big role in setting expectations.

“You can have one agent who says, ‘We’ll definitely get $1 million for this property but I’m going to try and get as high above $1 million as possible.’ Then you have another that says, ‘I think we can get $1.2 million for this property,’” he said.

“The first agent has been more realistic, the second has essentially bought the listing. It’s very hard for a consumer to knock back an agent who says he can get $200,000 more than the other guy. When it sells for $1.1 million, the price point is exactly the same but you’ve got one happy and one unhappy customer.”

RateMyAgent was launched four years ago and now claims to be used by 27,000 real estate agents, roughly three quarters of all agents in the country, with reviews from homeowners for one in three properties sold across Australia.

The company faced criticism for its invite-by-agent-only review model resulting in virtually no negative feedback on the site, but that was changed early this year to open up the platform to anyone who has bought or sold a property with the agent.

It comes as debate rages about how far house prices still have to fall, with predictions ranging from five per cent top-to-bottom to more than 30 per cent in extreme scenarios.

Tightening lending standards in the wake of the banking royal commission and Labor’s planned cutbacks to tax breaks for property investors are expected to put further pressure on prices.

AUCTION HEARTBREAK

Auction clearance rates in the two major capitals are now hovering at multi-year lows of between 40-50 per cent.

Earlier this month, a Sydney couple said they were “heartbroken” after a Chatswood home that had been in the family for 93 years passed in at auction.

Just two bidders for what until recently would have been a “hot auction” couldn’t be enticed anywhere near the $1.75 million reserve for Chris and Brad Kerr’s three-bedroom California bungalow.

“Last year our vendors might have got $2.4 million for this but now we’re having to ask them to consider $800,000 less than that,” Standen Estate Agents’ Karen Davis told The Sunday Telegraph.

Mrs Kerr’s mother, who passed away last year, lived in the house until she moved into a nursing home four years ago. “Yes we are heartbroken,” she told the paper. “We expected to get something more reasonable than this. This is garbage.”

MacroBusiness founder Leith van Onselen said the comments were like reading The Onion. “Chatswood is, of course, the nation’s most popular suburb for Chinese buyers,” he wrote.

“So what Ms Kerr is really ‘heartbroken’ about is the fact that Chinese capital flows have evaporated and Sydney’s real estate is not being sold off to the same extent as it was before, to the detriment of young first home buyers locked out of the market.”

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