“Apartments are the No.1 thing,” Malamatinas said. “Buyers are just a little bit more reserved now than they were … They do their market research before and are being stand-offish now. It can take five minutes to get an auction started, and it goes really slow.”
Bigger discounts are being offered on homes that sell privately, or even off-market, if the deal could be done quickly, and give vendors more peace of mind if they had already bought another property.
Jellis Craig Stonnington partner Michael Armstrong said the transition in the market, from red-hot to much cooler, forced vendors to change their pricing.
“We’re obviously going through a transitional phase of the market and people are having to adapt,” he said.
Armstrong said he expected a period of reduced activity across the region, as vendors and buyers adjusted to the slowing market.
The Macedon Ranges, where tree-changers fled during Melbourne’s six lockdowns, also saw a shift in discounting where the average discount jumped by 3 percentage points from 4.6 per cent to 7.6 per cent over the year to April.
Keatings Real Estate owner John Keating said vendors were now realising that buyers were not willing to pay as much as they had last year when the market was booming.
“People get carried away expecting to get prices the same as last year,” Keating said.
The changing market was not only making it hard for vendors, but for agents who were unsure what buyers would pay for particular properties. Keating, who advertises reserve prices, said it was becoming much tougher.
“I have two auctions this weekend where I have said to the vendors: ‘I’m not sure what the market will value these properties at,’” Keating said. “We have set reserves, at figures higher than I would have expected this time last year … but we don’t know what the market may be prepared to pay.”
Though many regions of Melbourne had recorded deepening discounts, not all did.
In Maroondah, in the city’s outer east, the average amount of discount was less compared to last year.
McGrath Croydon’s Paul Fenech said while prices were holding up, the market was slowing in the region. He said agents were expecting to see a rise in discounting in the coming months, given discounting was happening closer to the city.
“We get the ripple effect, so if you see discounting in the inner-city areas it usually comes out to Blackburn, Ringwood, Nunawading and to here,” he said.
Buyers were becoming more hesitant at auctions, with some waiting until after properties passed in to negotiate and buy.
“FOMO has gone out of the market,” Fenech said. “We do have to work harder to get deals together – six months ago it was a lot easier, but things were going up so much in 2021 it had to ease.”