High levels of discounting on coastal properties

Sellers are having to drop the asking prices for their properties by as much as 23 per cent in coastal locations to get their properties sold.

RP Data senior research analyst Cameron Kusher says high levels of discounting suggest that listing prices are out of line with what the market is willing to pay in a given location.

Aldinga Beach in South Australia sits atop the list of locations where sellers are having to cut their asking prices by the greatest amount to secure a sale, as unit prices recorded a 23 per cent discount.

Among houses, Saint James in Western Australia recorded the biggest average discount of 19 per cent. Most of the locations showing large discounts are waterside suburbs, beachside getaways or suburbs of Perth.

After Saint James, the top 10 for the greatest discounting on houses is made up of: Hove in SA (18 per cent); Paradise Point in Queensland (17 per cent); Bryron Bay and Wangi Wangi in New South Wales (17 per cent); South Perth (also 17 per cent); San Remo in Victoria (16 per cent); Turrella in NSW (15 per cent); The Entrance in NSW (14 per cent); and Mount Claremont in WA (14 per cent).

Kusher says it’s no surprise to see locations known for their coastal lifestyle such as Byron Bay, Paradise Point, Wangi Wangi and San Remo high on the list, as houses in these locations are typically “discretionary assets”.

“As high net worth individuals feel the pinch of dramatic falls across equity markets, lower than anticipated bonuses and in some cases job losses, the holiday home or other discretionary assets are usually the first to go,” Kusher says.

Among Australia’s capital cities, Darwin and Canberra sellers are the closest to achieving their asking prices:

  • Sydney houses are being discounted by an average of 6.9 per cent and units by 5.3 per cent.
  • Melbourne houses are being discounted by an average of 7.7 per cent and units by 6.4 per cent.
  • Brisbane houses are being discounted by an average of 6.7 per cent and units by 6.6 per cent.
  • Adelaide houses are being discounted by an average of 6.4 per cent and units by six per cent.
  • Perth houses are being discounted by an average of 7.2 per cent and units by 7.1 per cent.
  • Darwin houses are being discounted by an average of 3.8 per cent and units by 3.7 per cent.
  • Canberra houses are being discounted by an average of 5.5 per cent and units by 3.6 per cent.