It is usually alarming when we read some property related article telling us that the homeowners are slashing their selling price just to sell. What if this is compounded by revelation that the total homeowners who are reducing their selling prices are over 30 percent of all sellers? According to property website Zoopla, UK homeowners desperate to sell their property in a slowing market have slashed their offer price by an average of £25,562 (RM139,000). In fact a total of 35 percent of the homeowners are slashing their selling prices. Coming to London, considered a major property market of the world, the average prices in London are being cut by more than £50,000 (RM272,000). 39 percent of the property listings were reduced in price. This average reduction is about 7.4 percent.
For Chelsea Football Club supporters, perhaps you can get a property there now. Prices in Chelsea were facing discounts of 7.9 percent or £129,559 (RM706,000) on average. Lawrence Hall, spokesperson for Zoopla, said the increase in the number of reduced properties currently on the market is good news for first-time buyers. He said, “A slight rise in levels of discounting is to be expected at this time of year when house hunters are likely to be delaying their property search until activity picks up in January.” (Before everyone thinks that reduction in selling prices meant dropping property prices, it has not happened yet.) According to the article, recent figures from Nationwide show that house price growth edged up in November, with average monthly property prices up 0.1 per cent. It was up 0.2 percent in October and 0.4 percent in September.
Dropping property prices may not work when the whole market is not in the mood to buy. In fact, it may be counter-productive because potential buyers may think that property prices are going to soften further. Panic selling may still not work. When we look at the overall stats showing property prices still inching upwards, we could already see that there are many properties which did not have to resort to discount and buyers were still buying them. Perhaps it’s because of location supply scarcity? Even within the Klang Valley, it is easy to see that while some areas have seen dropping prices, there are many in-demand areas for which property prices stayed almost the same.
A good friend who’s already 50 years old said that there has been occasions where his offer and the seller’s willing price is pretty far off, still. He concluded by saying that the sellers still have strong holding power. I replied, “usually the properties we like are those that some other people like too. That is why owners will try to hold on. As for desperate sellers, usually their neighbour or relatives will get the unit first…. As for opportunity dropping down from the sky, that depends on luck n effort. Keep looking at listings n call as soon as u see an awesome one. As for holding power, this is summarised by job market. Holding power will only start to waver when a lot of ppl lose their jobs. Only personal tots.” Happy viewing and negotiating. It may be a good strategy to expand the choices too.
written on 21 Dec 2017
Next suggested article: It’s always best to start investing 5 years ago. Agree?