The Queensland housing market is so hot 90 days doesn’t leave you enough time to buy back in when you sell.
- Some buyers have had to settle for less when property hunting
- Core Logic latest data shows nationally the average home had jumped $103,000 in value in just one year
- Real Estate Institute of Queensland CEO says it was the toughest market she had ever seen
That depressing reality is stressing out teacher Megan Whiting as she and her partner spend every weekday hunting down real estate and every weekend going to open homes after selling a Murrumba Downs property in March.
“It went under offer within 24 hours and we agreed on a three-month settlement thinking that would be more than enough time to buy a house,” she said.
“We have seen hundreds of houses and made offers on 15, but our success rate is zero, zip, we have not got one.”
“We put three offers on three houses in one weekend and systematically got rejected from all three,” Ms Whiting said.
“We got really close sometimes, we actually offered more money than what they took in the end, but the conditions I suppose with a 90-day settlement didn’t get us across the line.
“Because the market is so hot, vendors are picking quicker options.”
“I track all the houses we go to and when they sell I see what they are selling for and they are often way over what they’re valued at.
“In the time we’ve been looking we have seen up to $200,000 added to the same houses in same street.”
Ms Whiting said the relationships with agents could be tricky too.
“Sometimes you do not even hear from the agent, it is like a bad relationship. You think, ‘I have not heard from them for a while, maybe they are just not into us’ — you get pretty over it,” she said.
“We have good jobs, stable employment, we have a lot of cash and yet we cannot even afford a house around a million at the moment, we just keep getting priced out.”
Facing the prospect of being homeless, the couple decided to rent for a year as they keep hunting.
Lowering expectations led to ‘tears of joy’
Georgina Auton and her partner Jordan McNee sympathise, as they too have had to settle for something less after hunting for a home for the past 18 months.
“It has been disheartening. We have looked at over 100 homes and made plenty of offers,” Ms Auton said.
“When we first started looking we were too picky worried about termite damage, asbestos and we wanted a garden, now we go: ‘Oh asbestos, no problem’.”
Core Logic latest data showed nationally the average home had jumped $103,000 in value in the past year, with house prices rising almost 11 times faster than wages growth, creating a more significant barrier to entry for those who don’t yet own a home.
It’s that stark reality that made the couple realise the great Australian dream of owning a home was no longer realistic for them.
They will move into a townhouse at Kedron in October.
They paid $592,000, outbidding three others, but paying only a few thousand dollars less than the very first house they looked at and “loved” at Keperra 18 months earlier.
They said they were “too picky” to make an offer at the time.
“When the agent called me we had got the place I was so overwhelmed I cried, so when I rang Jordan to tell him he thought we didn’t get it because I was crying,” she said.
“But it was tears of joy.”
Bidders showing irrational and erratic behaviour
Toowong real estate agent Gabrielle Trickey, who has witnessed properties selling recently for up to $300,000 over the asking price in Brisbane’s leafy western suburbs, said some buyers became aggressive and angry when told their offer was too low.
A house she has listed at 39 Duke Street, Toowong, got five firm offers in the first three days, but she said two were way “too low”.
“One of the buyers said it was a really good offer, but no we had others $200,000 to $300,000 more,” she said.
“We are having people who are buying other houses just to make sure they have got a house before they come to an auction and then buy the house at auction and then have to crash the first contract.
“So just really erratic, irrational behaviour — very desperate, it is like they think there will never be another chance that they can purchase this house.
“Certainly in some areas it is hard to get a house and certainly it has become much more difficult to buy a house now than it has ever been ever and competition is rife.”
Overcommitting is a dangerous game to play
Real Estate Institute of Queensland CEO Antonia Mercorella said it was the toughest market she had ever seen and an inability to buy was across all demographics.
“Even buyers with a generous budget are struggling to secure property, you have to move very quickly in this marketplace.
“We are seeing tears and some extreme disappointment.
“Buying a home at auction and a second one is a dangerous game to play, but it is a risk some purchasers are willing to make.
“But I think we need to acknowledge that it can be a very frustrating and frightening time for people trying to secure property.
“There is no panacea for a solution, it is being driven by very strong demand it remains to be seen how long this will last.
“We also want to see people entering into mortgages they can afford, where they can service then mortgage if rates go up and not enter into financial stress.”
Ms Mercorella said competition in regional areas was also fierce.
“Certainly I do not recall a time when we have seen virtually the entire state of Queensland performing so strongly as we’ve seen in the last 15 months,” she said.
Buyers desperate to get weekends back
Buyers’ Agent Brett Warren said buyers were compromising and doing things they would ordinarily not.
“The heart starts to rule over the head as FOMO [fear of missing out] creeps in and takes hold,” he said.
“Buyers are increasingly frustrated, impatient and are taking a win-at-any-cost attitude.
“They want their house and their weekends back.
“We have seen some cry and get upset, confronting agents.
“If they do go to open homes they want an immediate answer on their offer, but of course the agent can’t give it to them.
“This is the worst it has ever been. We had the usual waiving of building and pest inspections and finance, but now also buyers are waiving the cooling-off period.
“Also people are now making offers sight unseen and in many cases without actually inspecting the property.
“They are sometimes compromising and buying what we would call secondary properties in flood zones, on busy roads and railway lines.
“But then when they need to sell in a lesser market, they lose out.
“People are also thinking there are no more properties coming up, so it clouds the decision-making process and judgment.”
Mr Warren is telling his clients to be pre-approved for finance so they can be ready to make an immediate unconditional offer and to put in a higher deposit upfront.
“The market is definitely not slowing down anytime soon, although I would suspect it will change down a gear from white-hot to red hot over the next 12 to months,” he said.