ROOT
Why distressed properties still sell at market value
Despite leading economists predicting a fall in the housing market once government support is withdrawn, a leading property researcher believes stock levels will have a greater impact on prices than owners needing to sell.
Why distressed properties still sell at market value
Despite leading economists predicting a fall in the housing market once government support is withdrawn, a leading property researcher believes stock levels will have a greater impact on prices than owners needing to sell.
Starting from Monday, 28 September, the Morrison government will reduce eligible payments from $1,500 a fortnight to $1,200 a fortnight.
This change is likely to impact up to 3.5 million Australians who are currently relying on JobKeeper payment during the COVID-19 pandemic.
In a conversation with Smart Property Investment, InvestorKit’s head of research, Arjun Paliwal, explained why distressed sales does not mean the property will sell for under market value, with stock levels being pivotal to values.
“There can be houses in Melbourne, Sydney, anywhere really, where someone may have a need to sell,” Mr Paliwal said.
“However, if there are many owners who aren’t selling, then the problems come down to stock levels.”
Mr Paliwal explained that an agent will work in the best interests of the client, with the potential buyers unaware that it is a distressed sale.
“People don’t actively go in wanting to sell at a loss,” Mr Paliwal said.
“They will still put in a campaign. They will still get agents displaying poker faces. They will still try to make the place look nice where they can.”
“As a result, if the stock levels are low, you might see a distressed sale, but they may not sell for cheap,” he stated.
Mr Paliwal urged investors who have been waiting on the sideline for prices to fall to actively watch stock levels, with a reduction likely to mean prices hold firm.
“I am not a believer in the September cliff for our house market across most parts of Australia.
“The unit market currently in Sydney, Brisbane and Melbourne pre-second wave were displaying spikes in listings that took new listings added per month above pre-COVID levels.
“With border closure directly impacting those markets, investors will see greater pressure to sell their properties at a cheaper price.”
“Across the housing market at a city level, [excluding Melbourne] the cliff is not showing. That is because listing levels remain lower or at pre-COVID levels not heightened above COVID levels, which would be the key indicator to look at.
“Over the next couple of months, if we are reviewing listing levels and where it sits in comparison with COVID, should they continue to remain low, then the cliff would not be showing for houses,” Mr Paliwal concluded.
RELATED ARTICLES
About the author
About the author
Earn
Millennials face 'generational squeeze' as most vulnerable group in retirement
Millennials will be the most vulnerable demographic to face the "generational squeeze" in retirement, caught between supporting elderly parents and adult children while funding their own later years, ...Read more
Earn
Top workplaces for women in 2025 highlight progress in gender equity and inclusive leadership
Australia’s top workplaces for women in 2025 have been announced, recognising companies that are leading the way in gender equity, flexible work arrangements and inclusive leadership development. Read more
Earn
Employee satisfaction dips as Australian workplaces tackle retention challenges
Australian workplace satisfaction has declined to 78 per cent as companies grapple with economic pressures and changing work dynamics, according to a new report. Read more
Earn
Simplify your finances: The benefits of debt consolidation loans in Australia
In an era where managing multiple debts has become a common financial challenge for many Australians, debt consolidation loans emerge as a practical solution to streamline finances and regain controlRead more
Earn
Long-term welfare dependency declines despite rise in JobSeeker recipients
New research from e61 Institute has revealed that, contrary to popular belief, the number of people reliant on the benefit system in Australia has declined over the past two decades, despite an ...Read more
Earn
Best property investment strategies in Australia for 2024: An expert's perspective
As the Australian property market continues to evolve, investors are keenly looking for strategies that will yield the best returns in 2024. Read more
Earn
Innovative tax saving techniques for individuals and families
Tax time can be daunting for many Australians, but with some innovative planning and smart strategies, individuals and families can maximise their tax savings. Read more
Earn
Top firm says five factors are fuelling the Great Resignation
According to PwC, the Great Resignation is showing no signs of slowing down. Read more
Earn
Millennials face 'generational squeeze' as most vulnerable group in retirement
Millennials will be the most vulnerable demographic to face the "generational squeeze" in retirement, caught between supporting elderly parents and adult children while funding their own later years, ...Read more
Earn
Top workplaces for women in 2025 highlight progress in gender equity and inclusive leadership
Australia’s top workplaces for women in 2025 have been announced, recognising companies that are leading the way in gender equity, flexible work arrangements and inclusive leadership development. Read more
Earn
Employee satisfaction dips as Australian workplaces tackle retention challenges
Australian workplace satisfaction has declined to 78 per cent as companies grapple with economic pressures and changing work dynamics, according to a new report. Read more
Earn
Simplify your finances: The benefits of debt consolidation loans in Australia
In an era where managing multiple debts has become a common financial challenge for many Australians, debt consolidation loans emerge as a practical solution to streamline finances and regain controlRead more
Earn
Long-term welfare dependency declines despite rise in JobSeeker recipients
New research from e61 Institute has revealed that, contrary to popular belief, the number of people reliant on the benefit system in Australia has declined over the past two decades, despite an ...Read more
Earn
Best property investment strategies in Australia for 2024: An expert's perspective
As the Australian property market continues to evolve, investors are keenly looking for strategies that will yield the best returns in 2024. Read more
Earn
Innovative tax saving techniques for individuals and families
Tax time can be daunting for many Australians, but with some innovative planning and smart strategies, individuals and families can maximise their tax savings. Read more
Earn
Top firm says five factors are fuelling the Great Resignation
According to PwC, the Great Resignation is showing no signs of slowing down. Read more
