A fierce case of FOMO is fuelling one of Brisbane’s biggest housing booms in years with open-home inspections looking more like a scene from The Hunger Games as desperate buyers treat dwindling stock like languishing loo paper.
The “fear of missing out” trend follows yet another month of median house price rises across the city, according to CoreLogic’s latest report, as buyers are now forced to make an offer mere hours after an inspection as record low interest rates and surging market confidence throw fuel on the fire.
According to the recently released Domain House Price Report, Brisbane’s median house price rose to an unprecedented $738,000 over the December quarter – a figure that’s up 4.7 per cent from 12 months ago and one experts say could further rise as the city undergoes a boom reminiscent of Sydney or Melbourne just a few years ago.
Internal Domain data has found the number of people attending open houses in Brisbane increased by a massive 69.4 per cent over the four weeks to the end of January– and that there were 43.9 per cent more people attending open homes than there were at the same time last year.
Buyer agent and director of Red Hill-based Your Property Hound Matt Reeves said increased interstate migration and investment had also sparked nothing short of a feeding frenzy among home-hunters, who were now terrified of missing the property boat.
“We have a wait list of new clients and we are working at full capacity. You arrive at a newly listed property now and it’s just intimidating the number of buyers that are there,” Mr Reeves said.
“The lines are stretched out the door and inside it’s like a can of sardines.
“It’s definitely the most competitive market I’ve seen. We put an offer in on a property in Keperra last weekend and, in what was the first open-home inspection, the agent received 15 offers – we were seventh in line.
“And it’s the same with all new listings.”
While Brisbane’s housing market has enjoyed steady growth throughout the pandemic, Mr Reeves said the market spiked late last year off the back of increased confidence – gathering more momentum over the past few weeks with half their business now coming from local home-hunters and the other half coming from interstate investors. He said investors were predominantly snapping up houses rather than units, which were continuing to underperform.
“The low interest rates are helping (this market growth) a lot but what’s off putting is the low levels of stock and the competition – there’s just so much pressure to make a decision in just hours and it’s even stressful for us as buyer’s agents.”
Director of Coorparoo-based Torres Property Will Torres has clocked record-setting buyer numbers at his open-home inspections this month, and said the Brisbane market was not only the busiest it had been in 16 years but was on an upward trajectory as the city emulated its major southern counterparts.
“I’m selling 10 per cent of my market to southerners and they are saying this (house price growth) is what happened in Sydney a few years ago – this is what we are experiencing now. I mean if you look back at 2018 down south, the market increased by about 30 per cent in Sydney and, while Brisbane is normally a good 10 years behind, that gap is closing because of covid,” Mr Torres said.
“And, because there’s so much urgency people don’t want to miss out, it’s FOMO.
“There’s a lack of stock, as well. Sellers know it’s hot but it’s just so bad to buy back in, unless it’s a lifestyle move. But, when you’re moving sideways though from one suburb to another, it’s almost impossible.
“I just put a video out on social media of every property we opened (last weekend) and we averaged about 70 groups through each one. One property had 111 groups through.”
He said the buying frenzy was fuelling major price jumps in some pockets, with one Carindale home recently selling for $1.251 million despite a seller’s reserve of $950,000.
While Mr Torres said families were the predominant force in the market, first-home buyers had hit the property pavement at a sprint, while splashing more cash than ever.
“First-home buyers are now saying we’ll pay $750,000 instead of $500,000 (a couple of years ago),” he said.
“I had 82 groups through a property in Morningside on Saturday and (immediately after) I had 11 written offers – all from first-home buyers. The property then sold to a first-home buyer for $810,000.”
Place Estate Agents New Farm director Judy Goodger said across Place Estate Agents Brisbane, they had seen about a 35 per cent increase in the number of settled sales in January 2021 compared with January 2020.
“The last two months of 2020 were some of the biggest we’ve seen in the Brisbane property market,” Ms Goodger said.
“We are (also) witnessing one of the highest buyer inquiries. Interstate buyer activity has increased significantly; southerners are wanting to escape to embrace the Queensland lifestyle. The inquiry from Victoria, in particular, has been phenomenal following their unfortunate lockdown. There are also more opportunities to work from home, so if people can relocate to the sunny state, they will.
“I just sold an apartment to a Melbourne couple. They said they wanted to become Queenslanders and ‘we should have done this years ago’.”
The sudden market spike is continuing to spark a string of incredible sales across the city, with one home at 34 Shakespeare Street, Bulimba, selling for almost $500,000 above reserve at auction last weekend.
Selling agent Matthew Hackett, of Place Estate Agents Bulimba, said the home was listed just before Christmas and initially secured an offer of $1.3 million (which was the auction reserve price), but, after a hot campaign and soaring interest in January, it clocked $1.768 million.
“It was a deceased estate and a very aggressive reserve, the owner had been in the house since 1961 and it was on a double lot with two titles. The buyer was Cielo Property Group and they are going to build two new properties on it,” Mr Hackett said.
“This (booming) market is driven by a lack of stock and it’s like the rolls of toilet paper on the shelf at the supermarket. It (stock) is running low and now everyone wants some.”
Ray White Paddington agent Judi O’Dea said the still thousands of Aussies trying to get home from overseas had further boosted the Brisbane market, with those unable to attend open homes snapping up properties sight unseen, while locals queued out the door.
“With our properties we’ve launched there have been queues of up to 70 metres. It’s definitely a fear of missing out, the rental market is a problem as well so people are really shaken by the scarcity of homes,” Ms O’Dea said.
CLICK HERE – For more information
While it is no secret cracking into the property market is tough right now, this report can help buyers identify regions that have the most affordable homes in each city and region across the country. Click here to read more.
So how can you get into your own place as quickly as possible while still paying the rent? We asked a financial adviser for his tips on what renters can do to increase their chances of buying. Click here to read more.