Selling a house off-market, which means not listing it on popular real estate websites like realestate.com.au, can have significant financial consequences for sellers. According to a study by PropTrack, off-market houses sell for 4.3% less on average compared to those listed on realestate.com.au. Similarly, units also sell for 1.2% less off-market nationwide, but the difference is higher at 2.8% in Sydney.
The impact of selling off-market is felt even in regions with higher-than-average house prices. Houses sold off-market in such areas miss out on more than 5% of their value on average. Even in lower-priced regions, the losses are substantial, averaging over 3%.
These findings are from sales in 2022, when the property market slowed down in many areas. However, in the current market conditions, where demand is high and supply is limited, the losses from selling off-market may be even greater.
The study highlights that sellers in New South Wales, Queensland, and Western Australia suffer the biggest hits to their returns when selling off-market. For instance, sellers in New South Wales miss out on more than 4% of the average selling price, while in Queensland and Western Australia, the difference is 3% or more.
House sales off-market, relative to those listed on realestate.com.au in 2022, achieved prices:
In Sydney, off-market house sales were 4.3% lower, and in regional New South Wales, they were 10.3% lower.
In Melbourne, off-market house sales were 2.6% lower, and in regional Victoria, they were 6.3% lower.
In Brisbane, off-market house sales were 3.6% lower, and in regional Queensland, they were 4.2% lower.
In Perth, off-market house sales were 4.9% lower, and in regional Western Australia, they were 5.8% lower.
Cities like Sydney, Melbourne, and Brisbane pose a greater risk for sellers opting for off-market sales, potentially resulting in losses exceeding $25,000. The study also reveals that off-market performance is worst in higher-priced regions, where off-market sales were over 5% lower than listings on realestate.com.au. This is mainly because transaction values tend to be larger in these regions, magnifying the dollar costs for sellers.
Even in regions with median prices at or below the national average, the losses from off-market sales exceeded 3%, meaning sellers are missing out on significant amounts of money.