Buyer’s market versus seller’s market

When it comes to real estate, there are lots of common phrases that float around, and one that’s been gaining a fair bit of traction over recent years is ‘seller’s market’.

But what does that even mean, how is it defined, and how is it different to what’s known as a buyer’s market? Here’s a quick insight into buyer’s market versus seller’s market.

Buyer’s market

A buyer’s market tends to occur when there are more properties listed for sale then there is demand for.

In a nutshell, this means buyers have multiple properties to choose from and they’re in the driver’s seat when it comes to negotiating the price.

In a buyer’s market, you’re more likely to see properties have higher days on market.

In other words the time between when they’re first listed for sale and when they transact is longer.

You are also more likely to see higher vendor discounting, as in the seller will reduce the price of the property in order for it to sell.

Signs of a buyer’s market

  • Fewer attendees at open homes
  •  A rise in listing volumes
  • Higher days on market
  • Lower auction clearance rate
  • Vendor discounting on properties
  • Stable or decreasing median property prices

Seller’s market

A seller’s market is the opposite, and it’s something many observed during Covid as people flocked to buy property, particularly in lifestyle areas.

In a seller’s market, demand is higher than supply and buyers have to be quick off the mark when it comes to securing a property because there tends to be more competition.

As a result, days on market will be lower, properties tend to sell for asking price, and property prices will increase in general.

Signs of a seller’s market

  • Multiple serious buyers at open homes
  • A decrease in listing volumes
  • Lower days on market
  • Higher auction clearance rate
  • A lack of vendor discounting
  • Increasing property prices

What triggers the market shifts?

A whole range of factors can trigger the shift from a buyer’s to seller’s market and vice versa. Some of these reasons include economic shifts, while others relate to lifestyle and societal changes such as those we saw during Covid.

For example, a rise in interest rates or a tightening in lending criteria can see the market shift.

Why? Because high interest rates and tightened lending criteria might see more properties come to market as homeowners struggle to pay higher mortgages.

It might also see fewer buyers in the market as their borrowing capacity has reduced. This would indicate a buyer’s market as the supply of properties is potentially higher than demand.

On the flipside, low interest rates and other economic conditions might see people flock to the relative security of bricks and mortar property.

Either way, the market shift can be hard to pick in advance, and the reality is people buy and sell property in all markets and all circumstances.

The most important thing when buying or selling is to remain educated and realistic, and this is where a trusted agent can assist.

How we can help

If you’re considering buying or selling a property and seeking to understand the current market conditions, why not chat with one of our friendly agents to understand how we can help?

Or feel free to enter your address below to get your instant property estimate.

We’re not just about property, but the people and the stories behind it. You can also view our list of currently available properties here.