Why buying a home has never been harder in QLD

Emotion, desperation and FOMO are driving Queensland’s booming housing market, with buyers, sellers and agents alike struggling to price the state’s most prized commodity - homes.

Emotion, desperation and a fear of missing out (FOMO) are driving Queensland’s booming housing market to the extreme, with buyers, sellers and agents alike struggling to price the state’s most prized commodity - homes.

An ever increasing number of properties across the state are being listed as “offers over” or “price-plus”, two terms already outlawed in Victoria and New South Wales.

Many other private treaty sales, even in some of Queensland’s most affordable suburbs, are being listed simply For Sale, Best Offer By or Sale by Negotiation, while others are heading straight to auction.

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The Office of Fair Trading (OFT) has received four complaints this year from consumers concerned about properties being marketed without a price, or where the listed sales price was later increased.

The Courier Mail is not suggesting agents are misleading buyers, with the use of ‘offers over’ or ‘price-plus’ permitted under Queensland law.

WEST END: This character house on a 455sq m block was listed for offers over $1.195 million and sold for a staggering $1.4 million. It last sold for $650,000 back in 2010.

But the great Australian dream is becoming a total nightmare for the average homehunter, as cashed-up interstate buyers, expats and investors offer huge cash offers and unconditional contracts, often sight unseen.

“There is nothing logical about the current market,” one agent said when asked how difficult it was to price property in Queensland right now.

“Emotion is the driver – an agent’s skills in the current market are about how to use negotiation skills to convert emotion into a premium price.”

REA economist Paul Ryan said there were two key factors affecting pricing in Queensland – the rapid growth in prices and the changing buyer demographic.

“Prices are growing quickly, in some cases on a weekly basis, so the pool of comparable sales is shrinking,” he said.

“There are also more buyers coming from Sydney and Melbourne, who often have much larger budgets to throw at a sale.”

NORTH LAKES: This family home on a 807sq m block was listed for offers over $669,000 and recently sold for $$780,000.

Mr Ryan said the lack of a price guide was particularly evident in the booming southeast corner, but it was also being seen in the regions.

“For buyers, it is certainly tough because just as first time buyers get a deposit up, the prices go up, and they can’t keep up,” he said.

“But it is not easy for sellers either, who also have to try and buy in the same market.”

Brisbane buyer and midwife Robyn Sinclair, who shared her family’s epic journey to find a home, said the local property market had descended into a “feeding frenzy”, and likened it to the “wild west”.

“Don’t even get me started (on pricing),” Ms Sinclair said. “It was such a crapshoot and there was no consistency in terms of pricing at all.”

A recent survey by Finder revealed that 42 per cent of the 19 economists it surveyed said they believed that there had been an increase in banks knocking back loans due to final prices being higher than their own internal valuations.

Finder’s head of consumer research Graham Cooke said it was not surprising that banks were dubious about listing prices, adding some may be more hesitant to take on extra risk.

ASCOT: Located in one of Ascot’s most sought-after enclaves, this five-bedroom Queenslander was listed for offers over $2.4 millions, and sold for $2.53 million.

But The McGill Group director Mark McGill, who sells on the Sunshine Coast, said it was “incredibly hard to price” in the current market.

“We just don’t know what someone is prepared to pay,” he said. “In past markets, we could price based on facts, but this market is more emotionally driven, and you can’t put a price on that.”

Mr McGill said fear of missing out (FOMO) and a lack of supply were among some of the key factors fuelling the market madness, adding that he had heard cases of buyers being “stuffed around” or “led to believe they are in the running” for a property when they had already been knocked out of the park.

He said his own agency had seen a number of properties go for $200,000 above their own appraisals.

“I have never seen anything like it in my time but I was around during the GFC when it was going the other way, houses selling $100,000 below appraisal,” he said.

PALM BEACH: Listed for offers over $1.05 million, this three-bedroom house was listed for the first time in 22 years, and recently sold for $1.155 million.

Propertyology managing director Simon Pressley said that while it was difficult to price property in the current market, his buyers agents had to do the hard yards.

“These days, well over half of the properties that Propertyology makes a formal offer on we subsequently withdraw our interest because a competitor’s offer exceeds our appraisal price,” he said.

Mr Pressley said the right decision may be to “just walk away”, adding their own “evidence-based appraisal process” often meant they could not justify the price being sought by a seller.

“There is differing legislation in every state, and while I don’t sell property, in defence of those who do, their job is to get the best price for the seller,” Mr Pressley said.

PALMWOODS: This acreage property had been tightly-held by the same family for almost 70 years, and was recently listed for offers over $1.55 million. It sold for $1.61 million.

But it is not just the established housing market where buyers are feeling the pain.

AVID Property Group general manager Bruce Harper has seen first hand the lengths buyers will go to secure a block at their Harmony estate on the Sunshine Coast, with many camping out overnight ahead of a land release.

“It is certainly very frustrating for buyers who can’t assess where the market is at,” he said.

“It is difficult to price property, even for us, but where we have a fixed price package (house and land), there is strong demand because buyers know what they are working with.”

Hopeful buyers have taken to camping at Palmview's Harmony Estate whenever there is a land release.

Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said they was satisfied that there were sufficient statutory safeguards in Queensland to protect consumers.

“Real estate conduct is governed by strict state-based legislation as well as federal consumer laws,” Ms Mercorella said.

“What we’re experiencing is a sales market that continues to exceed and defy the expectations of both vendors and agents, making it virtually impossible to predict the price that the market values the property at.”

REAL ESTATE: Real Estate Institute of Queensland CEO Antonia Mercorella. Image supplied by the REIQ.

Originally published as Why buying a home has never been harder in QLD