Amid falling house prices and interest rate rises, agents are turning to increasingly frenzied measures to hunt for sellers
The first time Neha Samar received a handwritten note in her letterbox asking if she would be willing to sell her home, she threw it in the bin and forgot about it. The third time she received a similar note, it felt “creepy”.
Samar has lived in her Shepparton property, north-east of Melbourne, since 2018, but this is the first year real estate agents have come knocking.
“They must be getting really desperate,” she said. “Shepparton has a bad housing need at the moment, but it’s so annoying.”
Agents are turning to increasingly frenzied measures to hunt for sellers as lower supply, falling house prices and rapid interest rate rises dissuade punters from entering the market.
The number of newly advertised homes for sale on fell by 7.5% last month, the latest PropTrack Listings Report released on Wednesday found, in a sluggish start to the usually busy spring season.
Brisbane and Sydney were the worst hit, dropping by 13.3% and 13% respectively.
The Hello Haus founder, Scott Aggett, said agents were under pressure with housing stock levels notably lower than previous years, leading some to resort to door-knocking, cold calling and sending out flyers.
“Agents are on the hunt for more quality listings to service,” he said. “Their personal income and business income will be down, due to lower trading volume and lower prices when compared with last year’s revenue.
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“They need listings that are fresh and priced to today’s market value, not homes they may have been working on with vendors that have been considering selling for some time and [are] yet to adapt to current pricing levels.”
Since a relatively sharp peak at the end of last year, there has been a 24% decrease in the number of property listings nationwide, SQM Research revealed. There were 73,461 properties listed on the market for the month of September compared with 96,346 in November.
The drop has been notable in Sydney, where monthly property listings have hovered around 12,000 for the past four months, a 35% decrease since November.
Sales are down across the whole state of New South Wales, from about 30,000 in the fourth quarter of 2021 to 21,000 in the second quarter of 2022. In the same period, median house prices have fallen by $40,000 to $925,000.
It’s a similar picture in Melbourne. There were just 14,707 property listings last month, almost half the November peak of 22,503.
Quarterly sales have dropped across Victoria by 26.5% from the end of 2021, with 25,300 sales in the most recent quarter. House prices have remained stable, though, at a median of $755,000.
The fury I feel receiving this mail at my apartment which I love and am raising my kids in but some rich jerk wants to add to their investment portfolio
The trend is encouraging some agents to get in touch with their creative side to lure prospective buyers.
For the past two months, Canberra resident Andrew* has been receiving three or four offers for agent evaluations a week, often accompanied by recipes or garden seeds.
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“It’s been happening for a year but it’s really ramped up recently … the Canberra market is still red hot,” he said. “One agent regularly says he has people on wait lists just waiting for new listings.
“Some agents have resorted to recipe cards and one even included a card containing petunia seed. They’ve been planted and are now starting to sprout.”
Richard Norman, also in Canberra, regularly receives correspondence from an agency with dessert recipes attached to help seal the deal. “The snails eat them,” he said.
The Real Estate Institute of Australia president, Hayden Groves, said the market had been in “major flux” due to the high inflationary environment and rapidly rising interest rates.
He said the Reserve Bank’s sixth consecutive interest rate rise in October, bringing the cash rate up by 2.5 percentage points since April, would continue to place greater downward pressure on prices in the short term.
“People tend to just pause and wait [at times like this], particularly in states and territories where they’re experiencing a retraction of property values, like in NSW and Victoria,” Groves said.
“Part of the reason is stock levels have slowed, new listings coming to market have slowed down but also property transactions will start to slow.
“And people who missed the market that were thinking about selling are now thinking we’ll just wait for the next cycle.”
Groves said once interest rates settled, which is widely predicted to occur by early 2024, the market would “come back to life”.
“Agents are looking to encourage trade-up buyers,” he said. “And sellers in the face of diminished competition will be quite happy to consider a subject sale prospect.”
* Name changed for privacy reasons.