CoreLogic’s latest data has shown that despite discounting levels stabilising, there is yet to be a “noticeable improvement” in a reduction in discounting levels.
The figures, based on a rolling three-month median, measure the difference between original list prices and ultimate sale prices, with the national median at 5.9 per cent as of July 2019.
While that figure has stabilised over recent months, it’s still a big difference from July 2018’s results of 4.9 per cent discounting, with this year’s figures the largest they have been since August 2011.
The report said that “the heightened discounting is reflective of the weaker housing conditions over the past year, and the increasing level of discount has recently ceased as housing conditions have improved”.
Overall, the capital cities of Australia have recorded slight reductions in discounting levels in recent months, at 6.1 per cent.
This figure is slightly lower than the recent peak of 6.3 per cent but is higher than last July’s figure of 5.1 per cent.
In regional areas, discounting has increased by 0.9 per cent to 5.6 per cent as conditions have “deteriorated”, according to CoreLogic’s report, with July’s figures the largest since March 2013.
“The increase in discounting levels over the past year is reflective of the weakening housing market conditions,” the report read.
“Certain capital cities are already showing signs that discounting levels are reducing, and with a housing recovery expected to continue, discounts should reduce further.
“Of course, lower interest rates and changed lending rules have enabled more buyers in the market, and at this point, the volume for stock remains low. As a result, negotiations in the marketplace are swinging from being in favour of the buyer to being more in favour of the seller and that is likely to also contribute to reduced levels of discounting over the coming year.”
In five months, Sydney’s peak discounting levels of 7.7 per cent have fallen to 6.3 per cent in July. However, these figures are still the highest they’ve been since 2007.
It’s a similar story for Melbourne, whose own figures dropped from 7.1 per cent in February to 6.5 per cent in July but are still the highest recorded in 12 years.