The vendor discount metric measures, for properties that sell below the initial list price, the difference between the original list price and the ultimate sale price. The metric is calculated as a median across a rolling 3 months of data. Within the past 3 months, housing conditions have started to stabilise but there has been no noticeable reduction in discounting levels.

As at July 2019, the median vendor discount nationally, was 5.9% and as the chart shows, discounting has steadied over recent months. At the same time a year ago, discounting levels were recorded at 4.9% and the last time discounts were as large as they are currently was August 2011. The heightened discounting is reflective of the weaker housing conditions over the past year and the increasing level of discount has recently ceased as housing conditions have improved.

Median Vendor Discount_National_20190826.PNG

 

The combined capital cities have recorded a slight reduction in discounting levels over recent months. As at July 2019, vendor discounting was recorded at 6.1%, which was slightly lower than the recent peak of 6.3%. Discounting levels have increased from 5.1% a year ago and haven’t reached their recent heights any time in the past 12 years.

Median Vendor Discount_Capital_Regional_20190826.PNG

 

Across the combined regional markets, discounting has increased from 4.7% a year ago to 5.6% as conditions have deteriorated. Although discounting levels across the regional markets are lower than those in the capital cities, there is no sign of a reduction and the last time discounting was this high was March 2013.

Median Vendor Discount_Sydney_NSW_20190826.PNG

 

Sydney has seen discounting levels fall from a peak of 7.7% in February 2019 to 6.3% in July 2019. The recent reduction in discounting mirrors the ongoing improvement in housing market conditions through 2019. Although discounting levels are reducing, they remain higher than they’ve been any time previously over the past 12 years.

The median vendor discount in regional NSW has increased to 5.5% in July 2019 from 4.4% at the same time in 2018. Although discounting levels haven’t reduced, they have steadied over recent months however, they are at their highest levels since February 2013.

Median Vendor Discount_Melbourne_VIC_20190826.PNG

 

The level of vendor discounting in Melbourne has fallen from a peak of 7.1% in February 2019 to 6.5% in July 2019. The reduction has followed the improvement in housing market conditions over the period. Despite the recent improvement, discounting is much higher than the 4.4% a year earlier and remains higher than it has previously been over the past 12 years.

Although discounting levels remain relatively low in regional Vic, they have continued to climb over the past year and are at their highest level since August 2013. As at July 2018, vendor discounting was recorded at 3.8% and by July 2019, this had increased to 5.4%.

Median Vendor Discount_Brisbane_QLD_20190826.PNG

 

Over the past year, there has been an ongoing increase in the level of discounting by vendors in Brisbane. As at July 2019, the median discount was 5.0% compared to 4.3% a year earlier. Although discounting is still quite low, the 5.0% in July 2019 is the largest median discount since April 2013.

The level of vendor discounting in regional Qld has increased from 5.4% in July 2018 to 5.7% in July 2019. The level of discounting has reduced slightly over recent months however, the last time discounting levels were as high as they are currently was August 2013.

Median Vendor Discount_Adelaide_SA_20190826.PNG

 

As the housing market has seen values fall in Adelaide, the level of discounting has increased. As at July 2019, the median vendor discount was 5.7% compared to 5.0% a year earlier. At 5.7%, vendor discounting hasn’t been as high as it is currently since August 2013.

In regional SA there has been a slight reduction in the magnitude of discounting over recent months. As at July 2019, the median discount was recorded at 6.0%, which was slightly higher than the 5.8% discount a year earlier.

Median Vendor Discount_Perth_WA_20190826.PNG

 

The level of discounting in Perth has been elevated for a number of years as housing demand has remained weak and values have continued to decline since mid-2014. As at July 2019, the median vendor discount was 6.9% compared to 6.5% a year earlier. The last time discount levels were this high was early 2009.

In regional WA, the median vendor discount has continued to trend higher over recent years as housing market conditions have deteriorated. As at July 2019, the median discount was 8.8%, up from 8.3% a year earlier. The 8.8% discount is the highest in regional WA since the beginning of 2009.

Median Vendor Discount_Hobart_TAS_20190826.PNG

 

As value growth in Hobart has slowed over the past year, there has been an increase in discounting. In July 2018, median vendor discounting was 3.5% compared to 3.8% currently. Over recent months, discounting levels have started to reduce again suggesting that buyers and sellers are closer aligned with their price expectations.

As value growth has slowed in regional Tas over the past year, there has been a moderate increase in discounting. A year ago, discounting was recorded at 4.3% compared to 4.6% currently. Mid 2017 was the last time discounting levels were as high as they are currently.

Median Vendor Discount_Darwin_NT_20190826.PNG

 

The weak housing market over recent years in Darwin has seen an elevated level of discounting occurring. As at July 2018, the median vendor discount was already high at 7.7% and it increased to 8.2% by July 2019.

Across regional NT the level of discounting by vendors remains low however, it is currently higher than it was a year ago. In July 2019, median vendor discounting was recorded at 3.9% compared to 2.9% a year earlier. Because of low volume of sales, the level of discounting in regional NT tends to be quite volatile.

Median Vendor Discount_Canberra_20190826.PNG

 

Canberra has recorded a slight increase in the median vendor discount over the past year however, discounting levels remain extremely low across the city. A year ago, vendor discounting was recorded at 2.5% compared to 3.1% currently. The increase reflects the slowing housing market.

The increase in discounting levels over the past year is reflective of the weakening housing market conditions. Certain capital cities are already showing signs that discounting levels are reducing and with a housing recovery expected to continue, discounts should reduce further. Of course, lower interest rates and changed lending rules have enabled more buyers in the market and at this point, the volume for stock remains low. As a result, negotiations in the marketplace are swinging from being in favour of the buyer to being more in favour of the seller and that is likely to also contribute to reduced levels of discounting over the coming year.