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.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
