‘Ridiculous offers’ made for units in one hot market
‘Ridiculous offers’ are being made for units in one of the nation’s hottest property markets as buyer FOMO returns to pandemic levels.
Unlike many homehunters her age, Minette Fulo never had the Aussie dream of a backyard and white picket fence.
When she moved to Australia from Canada three years ago for the lifestyle and the weather, she was happy to settle for a unit, but she wasn’t prepared for how hard it would be to get into the property market.
After months of making offers and constantly being outbid, the 27-year-old nurse took a break from the grind of property hunting, but is now back in the game and has her sights set firmly on a Brisbane unit.
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“I was actively looking six months ago, but I just got overwhelmed and over it,” Ms Fulo said.
“I was hoping for a slight pullback (in home prices), but they haven’t really. Interest rates are still too high. I was expecting them to be lower.”
With Brisbane’s median house price now just $2000 away from $1 million, Ms Fulo is one of many first homebuyers trading a house for the inner-city lifestyle and (relative) affordability offered by a unit, with the median price sitting at $690,000.
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“I think I already knew when I started looking that houses were so far out of reach,” she said.
“Besides, I’ve always lived in the city — all the jobs are there — and I like my flexibility, so I’m happy with a unit.
“I’m buying a property mostly as an investment, so I’m going in with an investor mindset. I’ve always been told to buy house because of the land, and that units don’t appreciate much, but it’s better than no investment at all.”
With a budget in the low $600,000s, Ms Fulo has engaged buyer’s agent, Mrs Vanessa Dallas, to help find her a two-bedroom unit within 15km of Brisbane’s CBD.
“I’ve saved more than a five per cent deposit, but I’m really only willing to put in 5 per cent,” she said.
“I just want some flexibility and to have some liquidity, so I’m trying to get into the market with the minimum amount of cash.
“If the property is really good, then I’d be willing to pay more than five per cent just to secure the property.”
Mrs Dallas said she had noticed some “ridiculous offers” being made on units since interest rates started dropping.
“I think people are getting sick of looking and that’s when those ridiculous offers come in,” Mrs Dallas said. “Unit pries are definitely rising. There’s a clear link between interest rate drops and what’s happening now.”
She said there were a few recent examples of people offering $100,000 more than the asking price for a unit she had gone to bid on for a client.
“I think people should really do their due diligence,” she said. “Look at the comparables in the area and not just put down offers for the sake of it. Education can help avoid these crazy price rises.”
Mrs Dallas said a house was still the preferred property type of choice for her clients, who were mostly first homebuyers and investors with five to 10 per cent deposits.
But, with a budget of $600,000 in inner Brisbane, they just weren’t feasible anymore.
“The mindset is that land is value, and that is true, but I also like to tell people that proximity can also sometimes add value a lot quicker,” she said.
Originally published as ‘Ridiculous offers’ made for units in one hot market