Pandemic homes selling below cost as buyers’ remorse grips Qld market

Vendors are reselling their homes for hundreds of thousands of dollars less than they paid last year as buyers’ remorse grips the market.

Qld homes sold at a loss as buyers' remorse creeps into the market

VENDORS who splurged during Queensland’s pandemic boom have resold their homes for hundreds of thousands of dollars less than they paid as buyers’ remorse grips the market.

With FOMO — or fear of missing out — no longer ruling buyer behaviour, homeowners have notched up capital losses of up to $600,000 after overpaying to secure their properties amid heated competition in 2020/21.

Exclusive data from PropTrack shows the vendors of a four-bedroom post-war home on two lots across an 814sq m corner block in Hendra were among Brisbane’s biggest losers, selling the property in September for 22 per cent under what they paid in November 2021.

The sellers bid $2.72m to secure the 1950s-built home at a hotly contested Covid auction, but found the appetite for renovators severely diminished when they re-sold one year later due to changed family circumstances.

PropTrack data shows median house prices in Hendra were up 25 per cent since last year to $1.6m.

Eimeo: Vendor paid $547,500 in August 2021, sold for $530,000 in March 2022

Hendra: Vendor paid $2.72m in November 2021, sold for $595,000 less in September 2022

Aus Property Professionals director Lloyd Edge said vendors who maxed their mortgages to match soaring house prices were most likely to succumb to a fire sale.

Some were burnt by the construction crisis, no longer able to carry the rising costs and delays associated with getting projects off the ground.

And others were seeking a return to their former life interstate, following a reality check on romanticised lockdown plans to settle in regional Qld.

Research by Real Insurance found 68 per cent of people who moved from inner city to regional areas planned to move back, while 36 per cent already had, citing better work opportunities or missing friends and family.

Aus Property Professionals director Lloyd Edge

”I’ve seen a big jump in properties that have sold again within 12 months of the vendors buying them,” Mr Edge said.

“There was so much FOMO last year that people were offering extraordinary amounts, often sight-unseen, and putting in offers sometimes without even doing a building or pest report.

“A lot of people thought low interest rates would last till 2024 so they went out and spent big on property and now they’re in trouble with rates rising.

“People have had to put their properties back on the market, and it puts them in a pretty precarious position when they sell and leave with negative equity then end up owing the bank,” he said.

Buderim: Vendor paid $1.7m in October 2021, sold for $1.525m in October 2022

Moranbah: Vendor paid $635,000 in December 2021, sold for $190,556 less in April 2022

On the Sunshine Coast, a four-bedroom Hamptons home on an 8,019sq m lot in Buderim went for $1.525m in October — $175,000 less than the owners paid one year prior.

Marketing agent Jess Ruskin, of Home Sunshine Coast, said the vendors were motivated to relocate for a job opportunity.

“The last time, it was sold at auction and there was competitive bidding and that was definitely a factor, and also this time around, the presentation of the house was not the same as when they had bought it,” Ms Ruskin said.

“The house itself hadn’t changed, but it had been beautifully styled the first time, and when a property is looking its best in a hot market it can have a pretty direct bearing on the sale price.”

Median house prices in Buderim have jumped 28 per cent since last year to $1.15m.

On the Gold Coast, a marriage dissolution saw vendors take $115,000 less than they’d paid 14 months earlier for a five-bedroom waterview home at Elanora, despite undertaking remedial work.

Carindale: Vendor paid $1.17m in October 2021, sold for $1.05m in June 2022

Elanora: Vendor paid $1.25m in July 2021, sold for $1.135m in September 2022

While the property, sold for $1.135m in September, still had drainage issues affecting its value, agent Rhys Wildermoth, of Belle Property Palm Beach, said this years’s aggresive campaign of interest rate hikes by the Reserve Bank of Australia was hitting home.

“We’re really starting to see a squeeze from interest rates,” Mr Wildermoth said.

“We were selling first-home properties during the boom for $1.1m, $1.2m, and it’s really tightening up now.

“A lot of those kids borrowed 80 or 90 per cent with mum and dad as guarantor, and now the squeeze is coming in on interest rates.

“We are now finding a lot of stock is landing $100,000, $200,000 under the asking price,” he said.

House prices in Elanora were up 15.7 per cent annually, to a median of $1.18m.

Main Beach: Vendor paid $2.2m in December 2021, sold for $2.125m in November 2022

PropTrack director of economic director Cameron Kusher

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PropTrack director of economic research Cameron Kusher said while not every loss-making sale was classed as distressed, more households were feeling the effects of seven cash rate rises since May.

“I think it’s reasonable to expect that we will see more people exiting the market after a short period of time,” Mr Kusher said.

“Buyers were clearly paying more when prices were rising, while for the first time in 11 years interest rates are rising. A lot of people fixed their mortgages and that will be expiring.”

Currumbin Valley: Vendor paid $935,000 in July 2021, sold for $925,000 in August 2022

Buyers Agency Australia director Dragan Dimovski said the current market presented opportunities for savvy investors to snap up properties at discounted prices as other buyers put purchase plans on hold.

“Despite the doom and gloom associated with the market falling, it wasn’t all bad, with many buyers and sellers benefitting from the market conditions this year,” Mr Dimovski said.

“People who had the best run were those who sold in the first few months of 2022 and then picked up a discounted property in the second half of the year, after prices started falling.