Getting the Price Right Matters More Than Ever

Getting the Price Right Matters More Than Ever

In This Market

If you want to sell your home in Frankston or Frankston South, the most important thing you can control is the price. It matters more than how the house looks, how it is advertised, or which weekend you pick for an auction. The price is the first thing a buyer sees. The market is not as hot as it was before. If you set the wrong price, your home can sit unsold for weeks. You may also end up with a much worse result than if you had set a fair price from the very first day.

The clearance rate tells you what kind of market you’re in

There is an easy way to check how the market is going before you sell. You can look at the auction clearance rate in Victoria. This number shows how many homes sell at auction.

In the strong years not long ago, the clearance rate was 70% or more. That means if 100 homes went to auction, about 70 would sell on the day or just before. Many of the other 30 would sell soon after.

Right now, the clearance rate is about 54%. That is the lowest we have seen in 25 years of selling homes in this area. You do not have to sell at auction to use this number. It is free, it is honest, and it shows how keen buyers are right now. It is a good idea to check it before you choose your asking price.

Online estimates and comparable sales can be out of date fast

Be careful about trusting a website that guesses how much your home is worth. Those guesses are based on “comparable sales.” These are sales of similar homes nearby.

There are rules called the Statement of Information rules. They say we must use three comparable sales from the last six months when we set a price for a home. The problem is that the market six months ago is not the same as the market today.

Since the start of the year, a few big things have changed how buyers act:

• Interest rates have gone up.
• The federal budget made a lot of investors stop buying.
• Self managed super funds are no longer allowed to borrow money to buy homes.

Here is an example. One home sold for just under $2 million about a year and a half ago. Based on today’s numbers, it is probably worth closer to $1.8 million now.

Here is another example. An investor bought a home when prices were at their highest during COVID. They sold it for $5,000 less than they paid. They did not care about the price. They just wanted their money back. Sales like that become the comparable sales that other owners get measured against.

Fewer buyers are coming, so there’s less room for mistakes

A few years ago, a normal four week campaign brought close to 48 groups of buyers through a home. These days, we would be lucky to get 20.

With only half as many buyers, a price that is too high can scare people away before they even come to look. Setting the price too high does not just slow things down. It is a very old story. The home sits unsold. Then the price drops from $1 million, to $950,000, to $900,000, to $850,000. It is like an elevator going down one floor at a time. Buyers start to wonder what is wrong with the house.

Auctions still do their job, even in a slower market

It may seem strange to choose an auction when only 54% of auction homes are selling. But auctions still help the seller in important ways. When a home sells at auction, the buyer cannot back out because they could not get a loan, and there are no other conditions. Also, when serious buyers see that other people want the home, they often step forward.

We recently took two homes to auction in Frankston South. One had about 30 groups come through during the campaign. The other had 40 to 50 groups.

• The first home sold after the auction. It sold to a buyer who wanted to move in quickly.
• The second home had a vendor bid of $1.44 million. A vendor bid is a bid made for the seller. No real buyers bid on the day. The home did not sell at the auction, and the bidding stopped at around $1.4 million. After the auction, we kept talking with buyers, and it sold for $1.435 million.

Buyers who have looked at a home are told if it sells after the auction, even if they were not there on the day. That is often when the real deal happens.

While we are talking about auctions: in Victoria, buyers do not have to sign up before an auction yet. In Queensland and New South Wales, they do. From October, sellers in Victoria will have to share their reserve price seven days before the auction. The reserve price is the lowest price the seller will accept. It would make sense for buyer sign up rules to come next.

Why a slower market can be a good time to move

If you are moving to a bigger home, a slower market can actually help you. The idea is simple. The time you buy matters more than the time you sell.

If you sell and buy in the same falling market, both prices are lower. So if you are moving up to a bigger home, or into an area you have always wanted to live in, you get the same discount on both sides.

Prices are also lower everywhere than they were in 2025. So spending a bit extra on the right home now could be worth more in the long run than waiting and paying full price later, when the market gets stronger again.

Frankston South isn’t just competing with itself anymore

Here is one sign of how much the market has changed.

A year ago, imagine you searched for comparable sales of four bedroom, two bathroom homes on a good sized block in Frankston South, within five kilometres. You would get about 15 to 20 results. About 19 out of every 20 would be in Frankston South.

If you do the same search now, it is closer to half Frankston South and half Mount Eliza. That means Frankston South sellers are now competing with Mount Eliza. Homes in Mount Eliza usually sell for more, and there are fewer of them for sale. This pulls buyers away, unless your price is right and your home looks its best.

In short

• The Victoria auction clearance rate (about 54% right now) is a free and trusted way to tell if it is a buyer’s market or a seller’s market.
• The comparable sales used to value homes can be up to six months old, so be careful with online estimates.
• About half as many buyers are coming to see each home, so there is less room for pricing mistakes.
• Auctions still have real benefits, even when fewer homes sell at auction. The buyer cannot back out, and the sale does not depend on getting a loan.
• If you are moving to a bigger home, buying in a slower market can make up for selling at a lower price.
• Frankston South homes are now often compared with Mount Eliza homes, not just other Frankston South homes.

This article is based on a chat between Juan and Josh Merchan on the Selling Frankston podcast. Juan has been selling homes in Frankston and Frankston South for more than 25 years.