There’s a gulf occurring between vendor and buyer

PROPERTY markets have entered a period of pronounced “negotiation tension” as prices soften and confidence dips, real estate professionals have said.

According to the Real Estate Buyers Agents Association of Australia, buyers and sellers are struggling to find common ground.

REBAA president Melinda Jennison said the gap between what the price sellers hope to achieve and what buyers are prepared to pay has widened sharply.

“We’re seeing a clear divergence in expectations,” Jennison said.

“Many vendors are still anchored to peak prices from months prior to now, while buyers are responding to softening sentiment and shifting economic conditions.

“When those two positions don’t move toward each other, negotiations often stall, and that’s exactly what we’re seeing on the ground.”

Jennison said the stalemate is evident even in suburbs where competition remains strong.

“In some areas, we’re still seeing multiple offers or several bidders competing at auction for a property, but they’re not converting to sales,” she said.

“That tells us that buyers are active but they’re not willing to stretch beyond what they believe is fair value in the current market conditions.

“Those who need to transact are recalibrating their expectations, whereas discretionary sellers are simply stepping back from the market.”

She said that headline median price movements are giving buyers a distorted picture of what is actually happening at suburb level.

“Median prices are a blunt instrument,” Jennison said.

“They don’t capture the nuance of local demand and they can swing dramatically depending on the mix of properties selling in any given period.

“If a suburb with mostly three and four-bedroom homes suddenly sees a cluster of two-bedroom sales, the median drops but that doesn’t mean the suburb has become cheaper. It just means the data is skewed.”

Jennison said this disconnect between data and reality is contributing to buyer confusion at a time when negotiation conditions have quietly shifted in their favour.

“Buyers are trying to make sense of conflicting signals such as falling medians, an increase in total listings, and inconsistent vendor behaviour,” she said.

“It’s a complex environment and the people who understand the micro-dynamics of each suburb are the ones making the most informed decisions.”

She said the current conditions are creating opportunities that have not existed for buyers for several years.

“For buyers who can read the market accurately, this is the most favourable environment we’ve seen in a long time,” Jennison said.