‘You’re not overpaying’: Do what it takes to get a foot in market

After 18 months, more than 20 unsuccessful offers, and three loan pre-approvals, these home hunters have had enough.

After 18 months, more than 20 unsuccessful offers, and three loan pre-approvals, Brett and Dana Moodley just want a place to call home.

The Brisbane couple have been fruitlessly house hunting in the suburbs of Crestmead and Browns Plains in the hope of securing a home for under $700,000 in order to qualify for the First Home Guarantee Scheme.

House prices have surged in these entry-level markets in the past 12 months due to demand from first homebuyers and investors, but the gains might be starting to lose momentum.

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Brett Moodley with Dana Lim with Naomi Moodley, 9mts, pictured at their rental in Runcorn, Brisbane. Picture: Josh Woning

New research from Suburb Data reveals the Brisbane markets where buyers are most at risk of overpaying because they have reached their peak, and one of those suburbs is Crestmead, with a median house price of $680,529.

“We’re just worried we’re going to be paying way too much for a house,” Mr Moodley said.

“The asking price might be $629,000, and you’d put an offer in and get declined and then find out it sold for $690,000.”

The couple, who both work and are in their 30s, has decided to let their latest loan pre-approval lapse so they can save more money to put towards a deposit.

This four-bedroom house at 16 Lycoris St, Crestmead, recently sold for $710,000 after being on the market for offers over $699,000.

But renting is starting to take a toll on the pair, who welcomed their first child nine months ago.

“Honestly, we just want a place to live without being limited by renting,” Mr Moodley said. “We can’t make this place our own when we’re renting. At the end of the day, we’re really just looking for a home that’s good enough to raise a family in.”

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The Reserve Bank’s decision to cut the official cash rate by a quarter of a per cent this month came as good news for the Moodleys.

“If we’re going to be going from renting to servicing a mortgage, that’s going to be almost double our rent, so a rate cut would help us in getting by each week,” Mr Moodley said.

Derrick Williams of All Properties Group, who predominantly sells property in Crestmead and Marsden, said those suburbs had been in high demand, attracting both owner-occupiers and investors drawn by strong rental yields.

Mr Williams said the average house price increased by at least $60,000 in a matter of months in the wake of increased first homebuyer incentives early last year, but that demand had started to slow.

“In the last six to eight weeks, it hasn’t escalated,” Mr Williams said. “I think we’ve kind of hit the peak.

“Buyers are a bit more wary — whether that’s to do with interest rates or the election.”

But Mr Williams said affordable properties priced under $750,000 were still in strong demand.

“I personally think we’re just going to plateau,” he said. “I don’t think the lower end of the market will drop.”

He also doesn’t think there’s a risk of overpaying.

“You’re not overpaying,” he said. “You’re doing what you need to do to secure the property when you’re in a market with a lot of active buyers.

“If you have to pay $5000 or $10,000 more to get the property...you do what you’ve got to do to walk away with the keys.

“I’m not having any conversations about what happens in the market. No one has mentioned in 12 months what happens if the market drops.”

Originally published as ‘You’re not overpaying’: Do what it takes to get a foot in market