A detailed analysis of sale prices for homes sold off-market, compared to those listed on realestate.com.au, has found that homeowners who choose to sell their homes off-market achieve lower selling prices.
On average, houses sell for 4.3% less off-market nationally. In Sydney, the difference in price is estimated to equate to more than $60,000, on average. In Melbourne, homeowners risk close to $30,000 selling off-market, on average.*
Units sell for 1.2% less off-market, on average. However, in Sydney, they sell for 2.8% less. This is a significant difference for many sellers.
In regions with prices above the national median house price in 2022, houses sold off-market missed out on more than 5.0% on average. However, losses for sellers in lower-priced regions still exceeded 3% on average and amounts to significant dollar figures foregone for sellers.
Deciding to sell off-market may come at a significant cost. While some sellers might try to save money by not advertising online, this analysis shows the potential earnings lost in the final sale price far outweigh the initial cost of advertising.
These results are based on sales in 2022, when home price growth slowed rapidly and fell in many regions. They may represent a conservative estimate of the costs of selling off-market in current market conditions where strong buyer demand on realestate.com.au relative to available supply is pushing prices up in most markets.
This research highlights the potential significant financial impact to vendor sale prices when selling off-market and the benefits of reaching the largest buyer audience with online listings.
Sellers of houses in New South Wales missed out on more than 4% of the average selling price by going off-market, and in Queensland and Western Australia the difference was 3% or more.
House sales off-market, relative to those listed on realestate.com.au in 2022, achieved prices:
The results of this research suggest that sellers, on average, will achieve better total outcomes by listing their property online with a public selling campaign.
The average potential losses from selling off-market are often many tens of thousands of dollars. In Sydney, Melbourne and Brisbane, this is likely to exceed $25,000, with high prices in Sydney contributing to the potential for much larger losses for sellers.
In all regions, the average price differential from selling off-market is far more than typical listing costs, suggesting most sellers will still make a bigger return despite the cost of listing by selling through on market campaigns.
Over the period of slowing property price growth in 2022, off-market sales in locations with median prices above the national median price of around $725,000 performed the worst. In these areas, the prices of off-market sales were more than 5% lower than those listed on realestate.com.au.
The dollar costs for sellers in higher-priced regions is also likely to be higher, given transaction values tend to be larger in these regions.
Regions with median prices at or below the median house price over 2022 saw smaller losses for
off-market sales, but they are still estimated to have exceeded 3%. This represents significant dollars foregone by sellers.
This analysis uses a hedonic regression model to estimate the average selling price difference between house and unit listings on realestate.com.au against those off-market sales in 2022.
We define ‘off-market’ for the purpose of this analysis as all sales not matched to listings on realestate.com.au. This will include a wide variety of sale methods, including exclusive listings on alternative platforms.
* Based on the average price difference between off-market house sales and those sold on realestate.com.au in 2022, in each greater capital city region. Price differences do not include marketing costs.
