Overpriced homes detriment to property market
Overpriced houses are contributing to dire residential property market conditions in some parts of the country, according to one report.
News Limited reported that some homeowners were forced to slash property prices by up to 40 per cent after grossly overestimating the worth of their dwellings.
According to Australian real estate sites some properties have had to discount the asking price by more than $1 million.
The prestigious suburbs of Palm Beach located north of Sydney, and Yeronga in Brisbane both have house listings which have sat stagnant on the market for up to two years.
SQM head of research Louis Christopher said some homeowners listed unrealistic prices on properties, which has a detrimental effect on selling prospects.
"That stops them finding a buyer in the first few weeks, the crucial time to sell," Mr Christopher said.
"The seller is then faced with reducing their initial asking price, creating stigma around the property with potential buyers (thinking) that there is something wrong with it."
Mr Christopher said overestimating the value of a property was one of the biggest mistakes those selling a house could make, dramatically reducing the chance of a successful sale.
And those in the market to buy a property should not be fooled into believing discounted houses were a good buy and should be snapped up.
"Even properties that have been dramatically reduced may still be overpriced," he added.