Buying and Selling Houses in Australia

Introduction

In the Australian property market, the dynamics between buyers and sellers can vary depending on the supply and demand. While a lack of supply can benefit sellers by creating buyer demand, it can be challenging for buyers in a tight market where every available property is crucial. A recent report by PropTrack revealed a decline in new listings in June 2022 compared to the same period in 2021, indicating a quieter year so far in terms of activity in the Australian property market.

The Concept of Pre-Market and Off-Market Properties

Rhett Dallwitz, the CEO of Listing Loop, an online marketplace for off-market properties, explains that the slower pace of property marketing contributes to the reduced number of new listings. Some properties intended for advertisement with a full campaign are known as pre-market properties. These properties are not yet marketed to the wider public through platforms like Domain or realestate.com.au. However, they are still available for sale. The term “off-market” refers to properties that are not listed publicly for various reasons.

The Significance of Off-Market Properties

According to Dallwitz, approximately 20% of available properties in Australia fall into the off-market category. These properties are often overlooked by buyers who are not aware of their existence. While some off-market properties are eventually listed on the market, there is a gap between the signing of the contract and the preparation of the property for sale. This gap can range from 12 to 21 days, during which real estate agents could be selling the property or creating competitive tension among potential buyers.

Types of Off-Market Properties

Off-market properties can be divided into two categories. The first category includes properties that are intended for sale but are not actively marketed through traditional channels. These properties may belong to high-net-worth individuals, celebrities, or vendors who value privacy. Additionally, some owners may not be fully committed to selling their properties but are open to offers at the right price. The second category consists of properties that are not listed publicly due to personal circumstances or financial constraints.

Advantages of Buying Off-Market

Access to a larger pool of properties is a significant advantage for buyers, particularly when supply in the market is low. Off-market properties offer the opportunity for less competition, allowing buyers to have better control over the outcome of their purchase. However, it is essential to note that less competition does not always translate to bargain prices. Some selling agents may initially list off-market properties at higher prices to appease vendors with unrealistic price expectations. As a result, buyers need to carefully assess whether the premium price is worth their while.

How to Access Off-Market Homes

Prospective buyers can tap into off-market properties through various methods. Engaging a buyer’s agent who has established relationships with real estate agents and vendors in a specific area can provide access to off-market properties. Buyer’s agents may receive direct inquiries from vendors who prefer not to use sales agents or from sales agents who are aware of a buyer’s preferences. Additionally, buyer’s agents can send buyer briefs to agents, who then search their databases and potentially even conduct door-knocking to find suitable off-market properties. Online platforms like Listing Loop also match buyers with sellers agents or vendors directly. However, accessing off-market listings through such platforms requires registration and unlocking of property details to maintain sellers’ privacy.

Conclusion

In the Australian property market, off-market properties represent a significant portion of available properties. Buyers who are aware of this market segment can gain an advantage by accessing a larger pool of properties and potentially facing less competition. However, it is crucial for buyers to approach off-market properties with caution, as they may encounter situations where they are pressured to pay a premium price or become pawns in managing vendors’ price expectations. Employing a buyer’s agent or utilizing online platforms can help buyers access off-market homes and navigate the complexities of the Australian property market.