Rising sales and tight supply push property buyers beyond the open market
Sales activity in Australia’s property market is rising even as the number of listings continues to fall, prompting more buyers to pursue off-market opportunities, analysis by the Real Estate Buyers Agents Association of Australia (REBAA) has shown.
Recent data from Cotality reveals that annual sales have climbed by nearly 3%, while the total number of properties available for sale has dropped by almost 15% over the same period.
Darwin has seen the most pronounced shift, with listings down 45% and sales up 60% in the past year. All capital cities have experienced double-digit declines in listings, with Hobart recording a 33% decrease compared to last year. Nationally, stock levels are now nearly 20% below the five-year average.
According to Melinda Jennison (pictured top), president of REBAA, the imbalance between rising sales and shrinking listings is pushing prices higher and leading more buyers to consider off-market transactions.
“When you have stronger sales activity but significantly lower listings available, it’s clear that more homebuyers and property investors are seeking off-market opportunities in an attempt to secure their next homes and investments,” she said. “However, with property prices rising in most jurisdictions, off-market properties are not the easiest to access for the everyday property buyer.”
It is estimated that up to 20% of properties – about 100,000 each year –are sold off-market, though precise figures are difficult to confirm due to the private nature of these sales.
Jennison noted that buyers need to be aware of the challenges involved in sourcing off-market properties. “Number one, it is not easy for buyers who may purchase a home a few times in their lifetimes to find off-market property,” she said. “This is because they simply don’t have the networks or the relationships with sales agents to be on their radars when these types of properties become available.”
She also highlighted the distinction between genuine off-market properties and those marketed to select databases before public listing. “If buyers receive an email from a sales agent with a ‘first look’ at a property that already has all the snazzy photos and styling, this property is not off market,” she said. “It is part of a marketing campaign for a property that will eventually be listed for sale publicly – unless someone pays a ridiculously high price for it that the agent and the vendor simply can’t ignore.”
Jennison explained that off-market and pre-market properties are typically offered to a small group of potential buyers, such as buyers’ agents, because vendors prefer a discreet sale. “Often, even in strong market conditions such as now, vendors desire a private sale over anything else, perhaps because it is a deceased estate, they are going through a divorce, or they simply don’t want the hassle of open homes every weekend,” she said.
Jennison added that buying off-market can be an effective approach in a tight market, as it reduces competition. “Purchasing off-market can be a sound strategy because it reduces competition with other buyers, especially when listings are thin on the ground like they are at the moment,” she said.
“That said, although they are considered the ‘Holy Grail’ of real estate, buyers must undertake the necessary due diligence to ensure they are not being sold a lemon wrapped up in a shiny off-market cloak that may also be overpriced.”
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