Homes sold $100k over asking: Qld market heats up as renters become desperate buyers
Fed-up tenants are jostling for entry-level properties as rising rents and fierce competition force them into home ownership.
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FED-UP tenants are jostling for entry-level properties as rising rents force them into home ownership at a time when competition to buy a property has never been more fierce.
In scenes reminiscent of the pandemic boom, open homes on weekends are overrun with buyers — an increasing number of whom are desperate long-term renters resorting to dipping into their savings or going into debt to try and escape the rental crisis.
The extra competition comes at a time when investors are looking to exit the market, forcing the hands of many tenants and making rental conditions even worse.
Ray White chief economist Nerida Conisbee said renters were realising there was no escaping skyrocketing rents and seeing home ownership as their only alternative.
“It’s actually probably a good time for a first homebuyer to get into the market, but there’s just not enough homes, so it’s really hard to buy,” Ms Conisbee said.
She said there was also a return of the fear of missing out or FOMO, despite so many interest rate rises reducing borrowing power considerably.
“When prices started rising again at the start of the year, I think people thought they would go down again, but price growth does seem firmly entrenched, and I think there’s a fear prices are on the move,” she said.
“Brisbane is also so much hotter than the rest of the market. It’s very different to Melbourne and Sydney because it’s seen such strong population growth, and now international migration is back, so that FOMO’s probably even more problematic (for buyers).”
Agents on the ground are also noticing more renters desperate to get out of their current situations and into home ownership.
Shane Hicks of Place Estate Agents - Camp Hill recently sold a townhouse at 5/19 Kennington Road, Camp Hill, at auction for $909,000, which he said was “considerably over reserve”.
Mr Hicks said the buyer had been renting and his rent had just increased, so he made the decision to buy instead.
“Some of these people are renters and rents have gone up so much that they think they may as well buy, or the property they’d been renting has sold and they need somewhere to go,” Mr Hicks said.
“(A townhouse is) a really good solution to being in a suburb you desire to be in at an affordable price.”
And many townhouses and units are owned by investors, who are now fleeing the market due to rising interest rates and government disincentives, such as the new rental cap in Queensland.
As of May, new listings added to the market were 20 per cent below the previous decade monthly average, but the number of investor listings has increased — particularly in inner-city areas.
Mr Hicks said more than 50 per cent of inquiries to sell properties were coming from investors looking to get out of the market.
He said the majority of people looking to buy investor-owned properties were owner-occupiers, with the most in-demand homes at the mid-to-lower end of the market, with no renovation work needed — particularly townhouses.
On the Gold Coast, a three-bedroom townhouse in Southport recently sold within two days of listing after attracting multiple offers.
The property at 2/80 Pohlman Street was listed for interested above $620,000, but has gone under contract for more than that.
Lisa Amies-Jones of Harcourts Coastal - Broadbeach said nine out of 10 of the people interested were owner-occupiers.
Ms Amies-Jones said she had noticed an increase in absentee owners of investment properties looking to sell, but often they were asking for too much.
Another townhome at 1/51 Bauer Street asking for offers over $669,000 received nine written offers within a few days, with some well over $700,000.
The three-bedroom property last sold two years ago for $350,000, and the owners have made no improvements made to it.
Marketing agent Ben Latimer of LJ Hooker - Southport said townhouses and entry-level unit stock was in strong demand. He said he expected to see more investor stock come online in coming months.
“I think we’re going to see more of it,” Mr Latimer said. “In this market, people don’t have that excess cash to put their hands in their pockets (and pay the extra needed to keep an investment property).”
The increase in renters in the buying pool is only increasing competition and forcing people to pay a premium for certain properties.
In Chermside, a first homebuyer couple recently secured the keys to a house at 20 Meemar Street after paying more than $100,000 over the reserve price at auction.
The five-bedroom, three-bathroom home sold under the hammer for $1.511m, while the reserve was only $1.4m.
A turn-key home in the suburb of Enoggera in Brisbane’s north recently sold at auction for $1.41m, which was more than $100,000 over reserve. As many as 15 buyers registered to bid for the property at 31 Norman Terrace.
On the Gold Coast, a townhouse at 27/272 Oxley St, Coombabah, was on the market for $600,000 and snapped up within a few days for more than $100,000 over the asking price.
Similarly, a townhouse at 1/96 Kangaroo Ave, Coombabah, recently went under contract the day after its first inspection for “substantially more” than the asking price of offers over $610,000, according to the listing agent.
Originally published as Homes sold $100k over asking: Qld market heats up as renters become desperate buyers
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