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Buyer frenzy causing property shortage

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Emily is a Sydney-based real estate writer.

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Australian home values are soaring as a tsunami of buyers spurred on by low interest rates, strong economic conditions and government stimulus continues to exceed the number of properties on the market. 

The latest data from SQM Property Research shows that while new national listings jumped 52.4 per cent in February, the level of absorption is so high that total listings actually fell over the month. 

Managing Director of SQM Research, Louis Chrisopher comments on these figures, saying that “right now demand is swamping supply.” 

In an analysis of the Reserve Bank’s monetary policy meeting in February, Chief Economist of AMP Capital, Dr Shane Oliver said that based on current conditions, he expects Australian house prices to rise by 5 - 10 per cent through 2021 and by a similar amount next year. 

“It would appear that even in the midst of a global crisis, Australians love nothing more than getting into a new house. 

“At this point in time, it makes some sense for a lot of people. Houses may be costly, but credit is cheap,” he said. 

The sheer volume of buyers on the market and competition amongst them seems to be speeding up the time it takes to sell. 

New data reveals that at a national level, in the second half of 2020, houses sold six per cent faster than in the first half of the year.

Around the country, Agents also say that their property markets are extremely hot with buyers snapping up homes in record time. 

Prestige acreage sells in just four days 

According to Brenton Buttigieg, General Manager at Ray White Nerang, prestige properties on the Gold Coast are selling quickly due to interstate buyers. 

Mr Buttigieg recently sold a five bedroom acreage property at 29 Proudlock Drive in Willow Vale for $1,520,000 in a matter of days. 

“In the first weekend, we had four offers straight off the bat that went into the $1.5m,” he said.

This two hectare property in Willow Vale sold in just four days. Source: Ray White Nerang

Mr Buttigieg says that prestige properties in the area usually take longer to sell, however more affordable housing in the Sunshine State has attracted an influx of interstate buyers. 

“We’re used to seeing prestige acreages have an average days on market anywhere up to three to six months, so a turnaround that quickly is a strong indicator on how the market is going at the moment. 

“Southern state buyers are pushing things along. $1,500,000 in Victoria or Sydney doesn’t get you anywhere as much as what you get up here. 

“More people are migrating and the prestige market is moving quicker than ever,” he said. 

Further north on the Sunshine Coast, Real Estate Agent Will Van den Dungen from Ray White Kawana has also experienced a spike in demand due to migration. 

“There’s a lot of people who were moving up to Queensland from Sydney and Melbourne, who couldn’t come up because of border closures, so a lot of people are making the move now,” 

The latest interstate migration data from the Australian Bureau of Statistics (ABS) shows that in the September 2020 quarter, of all the states, Queensland gained the most people from interstate migration — with a total of 7,200 people making the move. 

Mr Van den Dungen recently sold a charming one bedroom apartment at 101/79-83 First Avenue two weeks ago for $390,000. 

“We sold after the first open for inspection with two offers. We opened on the Saturday and it sold Monday the following week. 

“Often you don’t expect to get that much interest so quickly so that was pretty exciting,” he said. 

Successful sale for Doncaster unit 

After weaker performance throughout 2020, the Melbourne property market is bouncing back with price gains of +2.1 per cent over February, according to the latest CoreLogic Home Value Index. 

Tim Heavyside, Melbourne Director and Auctioneer at Fletchers Canterbury says the market is certainly on the rise, selling a two bedroom villa unit at 2/797 Elgar Road for $616,000. 

This unit villa in Doncaster sold via private treaty for $616,000. Source: Fletchers

The two bedroom unit was wheelchair friendly with the inclusion of a modified bathroom as well as a ramp to enter into the outdoor entertainer’s deck. 

“There were 28 groups that came through in three weeks. Some buyers were first home buyers, some were downsizers, and some specifically looking for wheelchair friendly accommodation. 

“In the end, the buyer was a first home buyer,” he said. 

While Mr Heavyside did not meet the vendor, he spoke with the vendor’s niece who was selling the property on behalf of her uncle. 

“The niece approached OpenAgent and OpenAgent connected her with me. I popped around and provided the advice and information and won the business,” he said. 

During those meetings, Mr Heavyside discussed the overall presentation of the property and recommended small ways to enhance the saleability of the property, including repainting the walls white, oiling the deck, adding greenery into the garden as well as hiring furniture into the property. 

71 groups through South Hurstville home in the first week 

When it comes to selling property, Kristina Lee, Principal at Belle Property St George says that in this rising market, it’s more important than ever to be transparent and honest with price guides. 

“It’s no secret that a lot of agents out there still underquote. When agents underquote you tend to lose faith in that particular agency and then you tend to not go there. With us, our clients are following us from property to property,” she said. 

Ms Lee says that her agency looks at a range of factors in order to determine a selling price. 

“We look at comparable sales, market factors such as current interest rates, government policies and what is on the market in competition with that home,” she said.  

As a result, Ms Lee has found that their guiding prices have been right on the mark. 

“I’ve taken a look at what we’re guiding and what we’re selling properties for, and the numbers are very very close. 

“I think that transparency and accurate guiding is helping us put the deals together quicker,” she said. 

Ms Lee recently sold a three bedroom house with granny flat at 90 High Street in Carlton. The family home was guided at $1,500,00 and sold for that price prior to auction. 

This five bedroom house in Carlton with granny flat attracted young families and investors. Source: Belle Property

After getting the offer and acceptance, Ms Lee contacted the other interested buyers asking if they were willing to go above this sale price. 

“The buyers went ‘thanks for letting me know’ or ‘no we’re out because it’s too much’ and that really emphasises that it is the right price because no one else will pay more. That’s the market figure,” she said. 

In her 28 years of real estate, Ms Lee says that the current level of demand in her market is phenomenal. 

A four bedroom double brick home at 71 West Street, South Hurstville sold at the end of February for $1,960,000. 

This south Hurstville property garnered an incredible amount of interest. Source: Belle Property

“The first week we had 71 groups through. Each group has around three people with them so the amount of people through the home was just crazy,” she said.