When Melbourne couple Zoe and Paul Ikin sold their St Kilda apartment late last year, they “lucked out” with a $50,000 profit despite riding the back of the house price wave.
They purchased the one-and-a-half bedroom 1934 Art Deco unit for $410,000 four years earlier, selling it again last September for $460,000. Had they sold two years ago, they could have gotten just shy of half a million.
“I think we lucked out, especially with how volatile the market is,” Ms Ikin said.
The 37-year-old, who works in advertising, said the $50,000 profit, minus agent fees and other costs of $13,000, “doesn’t seem that much”, but the couple felt like it was a good deal given the “timing of the market”.
“At the end of the day we were aware (it would be tough) due to APRA and the banks not lending to potential buyers,” she said.
The couple had good reason to be relieved at the sale price — at auction, there were six registered bidders but not one bid. It sold the Wednesday after the Saturday to the buyer who had made a pre-auction offer of just $425,000.
The couple has now upgraded to a larger apartment nearby, a two-and-a-half bedroom Art Deco just up the road from the renovated Gatwick. They picked it up for $607,000 — a discount of about $80,000.
“It is a little on the tired side but just needing cosmetic renovations,” Ms Ikin said. “We took advantage of the market falling and did a smart buy in a great street.”
It’s a happy ending for the St Kilda couple, but new research shows they are part of a shrinking group of home vendors who report being satisfied with their sale price.
The survey of more than 36,000 respondents by real estate agent review platform RateMyAgent has shown a steady decline in overall price satisfaction, from 42 per cent in April last year to 29 per cent in December.
The Price Expectation Report released today found regional areas achieved the highest rate of above expectation sale prices, while metro areas in NSW, Victoria and WA ranked highest for below expectation.
It comes as house prices across the country continue to slide, with Sydney and Melbourne now 13.2 per cent and 9.6 per cent down from their respective peaks in July and November 2017.
The RateMyAgent report again found sellers with homes valued over $1.5 million were the most likely to be unhappy with their sale result.
“When you have very strong growth, particularly in the $1-2 million end, you may see percentage growth being similar across the board, but dollar growth is a lot higher,” said RateMyAgent chief executive Mark Armstrong.
“Psychologically, when the market comes back off a $2 million property it’s a lot more dollars than off a $500,000 property. You’re naturally going to have more people unhappy at the top end because it’s a bigger hit to their hip pocket.”
Mr Armstrong said vendors were having to adjust their expectations to a “new reality”. Property was still selling but many owners were being forced to pass in at auction and “negotiate a price that was below what they were hoping for”.
The credit squeeze was making it harder for investors, particularly as banks no longer allow interest-only loans when calculating repayments.
Mr Armstrong said that had “decimated the investor market, particularly for investors that own multiple properties, and many have been forced to sell”.
Hornsby was named the unhappiest suburb in Australia, while Clarence in Tasmania was the happiest. Six of the top 10 unhappiest suburbs were in NSW, while Tasmania had three of the top 10 happiest.
“The biggest trend we’ve seen is more affordable areas tend to get less affected by a downturn,” Mr Armstrong said.
“When markets like Sydney and Melbourne go through strong periods of growth you see an increase in people moving away to places like southern Queensland for tree and sea changes.”
Mr Armstrong said “core markets” like metro Sydney, Melbourne and Brisbane “tend to find their feet first” in a downturn due to the lack of “ongoing underlying demand” in regional areas.
“There’s only so much demand,” he said. “The bigger cities have the financial, legal, political, health and education centres. I think we’ll find it won’t be a long-term factor, we’ll find the inner areas of Sydney, Melbourne and Brisbane find their feet first.”
He added, “I suspect we’ll see the unhappiness ratings of the regional areas probably grow, and we’ll see happiness return back to these core markets.”