Off-market Property Sales In Australia: Market Trends And Statistics

The off-market property sales (including the for sale by-owner market) is becoming popular in Australia.

SUMMARY AND OVERVIEW

According to industry experts, buyers are looking for more lower cost as compared to those properties under auction sale. To capture the market, buyers, and owners at the same time are looking for agents (which could work on both parties) to deal their properties. Most of these agents creates dedicated websites to cater this market. The number of agents working in the off-market sector is increasing in number, an average annual growth rate of more than 7%. 

Based on the number of properties sold on different websites (off-market and for-sale-by-owners), we’ve calculated that the number of off-market properties sold by these platforms has a yearly increase of 72%. 

Based on the number of properties sold on different websites (off-market and for-sale-by-owners), we’ve calculated that the number of off-market properties sold by these platforms has a yearly increase of 72%. 
Thus, we calculated there’s a growth of 7.08% annually in terms of agent companies or firms operating in the off-market property sales in Australia.

METHODOLOGY

The exact information on detailed figures and data of the off-market property sales in Australia has not been published on any industry reports and no direct available data has been found. However, by looking at various reports, real estate industry statistics, news articles and from experts’ opinions, we were able to collect data to finally conclude that this industry is growing in Australia. We’ve presented the findings below.

FINDINGS

According to the business related report published in Australia, off-market property sales is becoming more popular and growing number of buyers and sellers is embracing this trend. McGrath Report confirmed that “off-market selling was taking off across all price brackets but particularly within the prestige sector, where privacy was a key priority for wealthy clientele.” 

The Australian news site also also confirmed off-market prestige property sales were on the rise on one of their released news 2 years back. Some experts, like Douglas Driscoll, CEO of Starr Partners also said he was “certainly” seeing more and more off-market sales, and that they had obvious benefits for buyers.

The owner of Property Whispers, Liane Fletcher also predicted the popularity of off-market sales would continue to grow in the future as she saw increased of listings in her company platform.

And the main reason why this market is growing is that buyers are looking for lower prices. Marketing and advertising costs, little to no competition for the sale, and auction prices, are one major drivers of lower property costs.

OFF-MARKET AND DIRECT-FROM-OWNER PROPERTY DATA AND HELPFUL STATISTICS

For direct-from-owner properties, more and more owners and buyers are turning to agents who could work on both parties, to capture off-market property sales in Australia. According to a report, this scenario has started in Sydney and Melbourne 20 years back. “When established in 2000, The Real Estate Estate Buyers Agents Association of Australia said there were 15 businesses operating in the industry, predominantly servicing high-net-worth individuals. There are currently 55 businesses listed as members registered with the association.”

Thus, we calculated there’s a growth of 7.08% annually in terms of agent companies or firms operating in the off-market property sales in the country.

According to CoreLogic figures, there is an increase of property listings in Australia and in Melbourne alone, an increase of 13.8% of homes are lingering on the market but the auction clearance rates have slipped well below 50% across the nation. Thus, giving options to the off-market industry.

Here are some growth trend between 2014 and 2015 based on number of properties sold recorded by some of the notable off-market and for sale by-owner websites (or those off-market agents operating online property listings);

  • Cubbi increased its number of properties sold from 10 to 55, which translates to 450% increase.
  • Agent in a Box sold 219 properties compared to 75 in the year prior–about 192% yearly increase.
  • For Sale By Owner sold the most properties overall, with 922 in 14-15 and 944 in 13-14–a slight decrease of 2.33%
  • No Agent Property has 110% increase while 40% increase for Property Now
  • Sell My Property Now has about 95% increase.
  • Your Hot Property and Real Estate Your Way has about 20% increase each
  • For Sale By Owner, For Sale For Lease, Buy My Place, and Private Property List has about 5% decrease each while Real Private has decreased by 40%.

On average, based on the analysis of the above websites, there was an increase or a growth rate of 72% of the total number of off-market properties sold between 2014 and 2015. 

In conclusion, while the off-market accounts only for just 1% of the total property sales in Australia, this market is however growing and reports show that those properties listed (as opposed to off-market) are showing slow downturn sales. With all the analysis from industry experts, real estate company reports, and from related organizations, they have common observations and in agreement that the off-market property sales in Australia is rising. 

Estimates based on 1% share in 2015 and using the 72% annual growth rate:

If in 2015, the total property sales was totalled 585,054, then taking 1% of it is about 5,851 properties sold using off-market sites. If this market is growing at 72% up to the current year, then we’ve estimated the market as below;

2015 = 5,851 properties sold

2016 = 5,851 * 1.72 = 10,064

2017 = 10,064 * 1.72 = 17,310

2018 = 17,310 * 1.72 = 29,772

SOURCES:

  1. https://www.news.com.au/finance/real-estate/selling/why-offmarket-property-sales-are-a-growing-trend-in-australia/news-story/453e2b72162a4c9d390b9d687b6d1b72
  2. https://realestatetalk.com.au/why-is-off-market-selling-on-the-rise/
  3. https://upside.com.au/articles/selling-your-property/property-guide/what-are-off-market-properties
  4. https://www.searchfindinvest.com.au/off-market-property
  5. https://propertyupdate.com.au/buying-market-properties/
  6. https://www.mansionglobal.com/articles/to-capture-off-market-sales-australian-buyers-turn-to-agents-97590
  7. https://www.listingloop.com.au/news/off-market-property-sales-growing-in-australia/
  8. https://whichrealestateagent.com.au/sell-property/for-sale-by-owner/
  9. https://www.domain.com.au/research/australian-property-sales-hit-lowest-point-in-two-decades-836670/ 

At Mhojhos Research, we deliver outstanding market report results across many industries. Market research is key to a new business becoming a profitable entity. It anticipates and minimizes risk, identifies potential customers and helps ensure success.

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