Originally published on Real Estate
PENT-UP demand, record low listings and double-digit price growth predictions are driving a desperate race to get into the Queensland market, as buyers with “dollar signs in their eyes” pay tens of thousands of dollars more to snag a home.
Frustrated at the lack of stock, interstate competition and the number of properties selling before they even hit the open market, buyers are resorting to letterbox drops and “throwing out big offers”, while agents are doorknocking homes in a bid to convince owners to sell.
Wannabe buyers are being forced to line up for over an hour to inspect homes, multiple offers are being thrown at vendors and deals are being done within hours of a property listing — if not beforehand.
Online searches for Queensland properties for sale on realestate.com.au are at record highs, with new data revealing searches jumped 41 per cent last week compared to the same time a year ago.
The most viewed property in the country on realestate.com.au this week sold in less than a day for $2.125 million in the Gold Coast hinterland town of Ormeau.
The acreage property at 3 Mobbs Place attracted more than 10,000 online views, two written offers, several verbal offers and a successful sale in just 23 hours.
Luke Moody of Hauss Realty said buyers were paying around 10 per cent more than a property’s value to beat the competition.
“Everything’s selling quickly,” Mr Moody said. “People have dollar signs in their eyes a little bit. They’re listening to what the banks are saying and expecting big growth in the next few years and people want to get in and capitalise on that.”
Place Estate Agents Paddington principal Tim Douglas has been selling property in Brisbane’s inner suburbs for more than 25 years and says the market is the “tightest I’ve seen when it comes to stock”.
“Demand is definitely ahead of supply,” Mr Douglas said. “We could sell a property several times over at the moment.
“We had 30 parties — that’s about 60 people — through an open house in Beck Street, Paddington, last weekend even though Brisbane was in lockdown with COVID-19.
“At the moment, we are frequently seeing multiple offers as soon as we get a new listing. In a competing market like this, buyers are often having to pay more than they feel comfortable with in order to secure the property. But at least then, they get a new home!”
PMC Property Buyers buyer’s agent Joshua Sawyer said some buyers were so frustrated by the current market conditions they were “throwing out big offers” to secure homes.
Mr Sawyer said the competition from interstate buyers used to paying higher prices for property was making it even more challenging.
“We’re getting more inquiry than ever before for professional help,” Mr Sawyer said.
“Buyers are coming to us, after looking themselves for six months, flustered and ready to buy, saying; ‘you guys do it, we’re over it’.
Selling agents are just as frustrated, with Mr Douglas saying his team was having to take extra measures to combat the lack of listings and meet buyer demand.
“We’re reviewing our data base, revisiting people we’ve sold properties to over the years, asking them if they are thinking of re-selling,” he said.
“We’re also actually asking people who are looking at buying if they also want to sell their existing properties — or if they have family or friends who might want to.
“And we’re out and about, conducting letterbox drops and marketing as well as hitting our social media channels.”
Realestate.com.au executive director of economic research Cameron Kusher said homeowners were still relucant to sell, despite the huge buyer demand and rising prices.
“I get the sense a lot of people who were thinking of listing wrote off 2020, so potentially over the next few months, we will see a big increase in stock,” Mr Kusher said.
“But a lot of people who want to sell, have to buy, and if there’s nothing for them to buy, then there will be a reluctance for them to sell.
“They might have to rent for six months and can’t find anything, and if they do, then they miss out on the capital growth in their own home as prices keep rising and then pay more for the next property.”
With the number of properties for sale at the lowest levels ever seen and home loan approvals at an all-time high, prices are continuing to climb.
According to SQM Research, there were only 26,600 properties listed for sale in Brisbane in December — 6.1 per cent fewer than there were a year ago, yet asking prices for houses are up 3.7 per cent.
Mr Kusher is expecting “double-digit” home price growth in 2021 on the back of historically low borrowing costs, the inability to travel overseas and the adoption of more remote working arrangements.
“You can see there’s a lot of pent-up demand and low supply, and if that continues, we’ll see quite strong price growth in Brisbane and on the Gold and Sunshine Coasts,” he said.
CoreLogic research director Tim Lawless is predicting property price increases of between 7 per cent and 10 per cent this year in Brisbane due to buyer demand and the lack of stock.
“While listings started to lift at the end of 2020, they are still 21 per cent lower than at the same time the previous year,” Mr Lawless said.
“I think it will remain subdued throughout January and maybe into February. My guess is demand will continue to outweigh supply and that will be one of the recipes for higher prices.
“We will see buyer numbers remaining very high because of low interest rates and confidence, providing we continue to keep COVID under control.”
Custodian CEO John Fitzgerald, the author of ‘7 Steps to Wealth’, said many people had over-estimated how significantly COVID was going to impact the economy.
“If the COVID pandemic has shown us anything it is that property can be a safe investment, but you need to be careful about what type of property you invest in,” Mr Fitzgerald said.
“We recommend investment in land because it appreciates in value.
“Of course, many investors need to build something on that land to help them pay down their loan, that’s why we recommend building a new house in areas of high population growth and with significant amenity and jobs nodes nearby.”
According to new data from realestate.com.au, inquiries from buyers for properties on the Gold Coast jumped a whopping 92 per cent in December compared to the same time a year earlier.
On the Gold Coast, Michael Kollosche, director of Gold Coast prestige property agency Kollosche, said his agents worked through the Christmas break to meet the incredible demand for luxury property — both established and off-the-plan.
Just last week, he sold a Broadbeach Waters mansion for $12.5 million.
“That’s the third significant sale upwards of $8 million in the past six weeks,” Mr Kollosche said.
“The property attracted a lot of interest and multiple offers which tells me there are more high-end buyers shopping at the top end of town and not enough stock to satisfy them.”
The sale of 297-299 Monaco St, to an undisclosed buyer, matches the suburb record and came hot on the heels of an $8.5 million deal done on 131-135 Monaco Street, Broadbeach Waters and an $8.7 million off-market sale at 87 Admiralty Drive, Paradise Waters.
Mr Kollosche said low stock levels were fuelling unprecedented inquiry and demand for off-the-plan projects, including ‘White Main Beach’ where 10 full-floor apartments had gone under contract in the past four weeks, at prices ranging from $2.5 million to $3.15 million.
“There has been a notable uptick in off-the-plan luxury apartment sales at our projects along the Coast as people just can’t get their hands on established homes,” Mr Kollosche said.
Buyers are also keen to snag a home on the Sunshine Coast, with properties there attracting 87 per cent more inquiries last month than in December 2019 and 81 per cent more in Brisbane.
Property commentator Terry Ryder from hotspotting.com.au said a real estate boom was already “well underway” in Brisbane.
“Brisbane is almost the perfect property storm — vacancies are low, rents are rising, sales activity is picking up and prices are responding accordingly,” Mr Ryder said.
“Brisbane is benefiting from a trend that I call ‘Exodus To Affordable Lifestyle’, where buyers from Sydney and Melbourne are heading north for a new level of lifestyle and affordability.
“Infrastructure spending is also picking up in Brisbane and that will also be a major driver towards booming house prices and sales into the future.”
Mr Ryder said regional Queensland was already a strong market, with multiple cities and towns rising on the back of exodus trend, very low vacancies and improvement in the resources sector.
“Rising markets include Toowoomba, Rockhampton, Mackay and Townsville, while the
Sunshine Coast and the Gold Coast continue to thrive,” he said.
“Expat Australians returning home or planning will also help to pump up these markets.”
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