Since 2007 a 70% rise in incorrect initial pricing of residential property across Mayfair has resulted in over €1.3bn (£1.1bn) worth homes being mispriced over the last decade. This has resulted in slower sales; price reductions and reduced vendor and purchaser confidence, and could all be avoided, explosive new research report by Wetherell reveals.
The new report is titled ‘The Price is Right’. Using LonRes sales data and local market intelligence, Wetherell have reviewed in detail the 1,047 residential sales that look place in Mayfair between 2007 and 2016. Of these, Wetherell has found that a staggering 245 were initially valued incorrectly and required a price correction to ensure a sale. Given an average unit value of €5.5m (£4.6m), this means that over €1.3bn (£1.1bn) worth of Mayfair property at current values has been priced incorrectly over the last 10 years.
Wetherell highlight that the average home in Mayfair currently sells for €2,594 per ft², with typical pricing of between ca. €2,368 to €2,960 (£2,000 to £2,500) per ft² for prime property and ca. €4,737 (£4,000) plus per ft² for ultra prime property. An analysis of annual sales over the last 10 years reveals that when a Mayfair property is correctly priced it will typically sell in 3-6 months; if it is incorrectly priced it will take 14 months to sell and will suffer a price reduction; and if it is underpriced it can sell in just 1-2 weeks but the vendor may have lost out on potential revenue, whilst the adroit purchaser will have found a “bargain”.
Wetherell highlight that the proportion of incorrectly priced homes has risen by 70% over the last decade. Back in 2007 there were that year some 157 sales across Mayfair of which less than 5% suffered from a price reduction before they were sold. Wetherell calculate that in 2007 90% of the homes on the market were correctly priced; 5% were incorrectly priced and had to have a price reduction to ensure an eventual sale; with the balance of 5% underpriced and rapidly sold.
