Where Australian homes are more likely to sell at a discount

Vendor discounting was revealed to be most common in Hobart and Brisbane, while much more rare in Adelaide. Sydney, Melbourne and Perth sat in between the high and low ends.

So why are buyers more likely to get a home below the asking price in some cities than others?

Compared against citywide figures, the data firm found that discounts largely mirrored the trajectory of prices in each capital.

As Paul Ryan, a senior economist at PropTrack explained, steady market conditions lead to more accuracy around asking price versus sale price. The more volatile the market, the wider the chasm when sale price falls short of what’s advertised.

“Adelaide has recorded the lowest rate of vendor discounting for some time, and was the one region to see only a small increase in discounting in 2022. This highlights how strong market conditions have been across Adelaide – one of the few regions to continue to record price growth over the past two years,” Mr Ryan said.

By contrast, Hobart went into the pandemic with the lowest rate of vendor discounting, having experienced strong market conditions for several years before the pandemic. But after recording sharp price increases over 2022 and 2023, Hobart now has the highest rate of vendor discounting among the major capitals.

According to Mr Ryan, this correlation is confirmed when comparing the opposite scenario: homes selling for above asking price.

“Vendor discounting tends to follow recent price growth outcomes. Comparing the share of listings that sell above asking prices – the opposite of vendor discounting – with recent price growth shows a tight relationship,” he said.

“This is clear when comparing the two in the largest markets of Sydney and Melbourne,” he added, noting that the time frame between price movement and the rate of discounts being offered is a few months.

But although the data showed that it may be easier to negotiate down in the Tasmanian and Queensland capitals, overall, PropTrack’s analysis revealed that discounts are generally being offered less often, and at smaller increments, across the country.

“Comparing across time, almost all markets are recording vendor discount rates significantly below pre-pandemic levels, which points to continued robust general market conditions across the country,” Mr Ryan said.

Before the pandemic, the median discount among properties that sold below advertised was around 5 per cent of the asking price.

That narrowed to around 4 per cent at the peak of the pandemic, but then increased in 2022 when prices fell off the back of rapid interest rate increases.

The current rate of typical vendor discounting now hovers between 4 per cent and 5 per cent.

Going forward, Mr Ryan said that buyers and sellers alike should expect to see vendor discounts tracking alongside market trends.

“It makes sense that when prices are rising, there is more competition for properties, and more sell above their asking prices,” he noted.

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