The Proof is Here: Listing Numbers are Down and Sale Prices in Some Suburbs are Still Higher Than Ever
Happy New (Financial) Year! Below is my monthly real estate update that covers market advice, my perspectives and recent activity both from a country wide view and with a focus to our special home in Brisbane’s western suburbs.
As a local who loves talking real estate, market trends, home improvement, and everything in between, please feel free to get in touch if you have any questions whatsoever.
It's Groundhog Day But With More Groundhogs!
Be forewarned, I’m about to repeat myself just this time I have more proof …
So the RBA has given us another stay of execution this month by leaving interest rates where they are. Goodness only knows that we will all take it but what will it mean for the Australian real estate market when things have been consistently heating up for 3 months in a row?
In my newsletter last month I made reference to the fact that in the last few months the number of buyers to open houses is increasing consistently week on week, the term FOMO is again being used in reference to buyers as it was back at the height of the Covid boom (read expert Nerida Conisbee’s take on that one), unconditional offers are again more the norm than the exception (they are for my team anyway) and of course all this means that prices are back on the rise (1.3% median price growth for Brisbane in June according to CoreLogic). When we would expect the polar opposite due to interest rates and a cost of living crisis, the biggest impact on the market has been very low levels of new listings and real estate stock in general. But I made all these comments based on national (new listings 8.3% down YoY in June) or Brisbane-based (new listings 9.9% down YoY in June) stats but, from a local suburb level, it was more about perception based on my own gut feel and day-to-day experience.
Ray White data analyst Will Clark published an article early this month. This prompted me to reach out to see if I could access stats specific to our local area … and it looks like my spidey real estate senses were right! For suburbs such as Pullenvale where very few properties are ever presented to the market, to suggest that listings are really up, down or otherwise isn’t really relevant. But for Kenmore and Chapel Hill which turn over a lot more volume, you can see below that buyers will be well within their rights to be feeling a little despondent about a lack of choice … especially Chapel Hill … wow!
And just for those buyers, and indeed general home owners, who claim that prices have dropped and / or are still dropping, the graph below is also very telling. Sure prices were somewhat impacted by rate rise after rate from around June 2022 but we are well and truly back on the rise in Kenmore and indeed starting to exceed end of Covid boom figures. (If you would like to see these stats as they relate to other suburbs just let me know).
Insider Tips For Navigating This Market
Another groundhog … last month I had a rant about the prevalence and pitfalls of selling “off-market”. I am now starting to see more and more properties being referred to as off-market opportunities. Interestingly I am seeing precious few of them selling, but for those who missed my last newsletter, I though a straight copy and paste would help:
” […] unless someone comes to you with an unconditional offer that is three times the acknowledged market value of your home, there is never ever ever a good time to take short cuts with your sales campaign. As with the Covid boom I am seeing a sharp increase in the number of off-market sales (where the property is not advertised on realestate.com.au etc and the agent just brings through a handful of buyers on a private inspection basis) and offers being accepted within 2 hours of the first open house.”
“The only party that benefits from these types of activities is the agent who gets maximum reward for minimum effort. I can 110% guarantee that until a property has been widely exposed to the market and the agent has thoroughly followed up and expertly negotiated with all buyers (I can assure you that if you have had 40+ groups through your house on a Saturday morning, to do that side of the job correctly takes a lot longer than just Saturday afternoon), you will never know that there weren’t $10,000s if not $100,000s left out there that should have been in your bank account. If you are thinking of selling and are tempted by an agent spruiking an off-market campaign to supposedly save you time and $$$, please at least speak with me first to explain the pit falls in more detail.”
While I am on my soapbox, I might just climb onto my high horse and give you a few more tips. Warm markets like this one often encourage bad practices and shortcuts from lazy agents so here’s one suggestion for home owners / sellers and one for buyers.
For Sellers: Agents Are Over-Valuing Your Home To Win Your Business
This is otherwise known as “buying the listing”. When new listings are light on the ground, some agents will tell you anything to get your business and deal with the process of “re-educating” you after you have signed the paperwork. Let’s face it, if I come into your home and tell you that I will get your $300,000 more than any other agent, you’d be mad not to go with me. Right? 100% Right! But the thing is I can’t guarantee that figure and I certainly haven’t come with my cheque book to buy the house for that higher figure. But it blows my mind how often I hear that a seller has chosen an agent for no other reason than that they said the house was worth more than any other agent told them.
So what do you do to circumvent the unscrupulous and those that simply get it wrong (valuing a property is not a perfect science and we can often get it wrong both over and under valuing)? It’s quite simple, ask for evidential proof in the way of comparable sales – this means properties that are similar to yours in terms of size, finish, features, location etc that have sold in the last 6 months. And then Google those addresses and study each property to determine if they really do seem like fair comparisons. If you have been really diligent about preparing to sell, you should have visited some of these properties while they were on the market (and another bonus to open house visiting is that you get to review the performance of agents before they know who you are).
Secondly, and more importantly, find out how the agent operates to ensure they will be aiming to get the best price irrespective of what the house has been valued at. Really simple question – what is your sales process to get me the best price?
For Buyers: Get Your Offer In Quick & Keep Following Up The Agent
Let’s be fair, we are seeing a lot of buyers at the moment. We have had many a weekend in the last few months where we have met over 100 buyer groups at open houses. That’s a lot of follow up and even with the best will in the world there is always the possibility that someone is simply missed. But there are also many instances where an agent takes the shortest possible route to a sale and simply hits an owner with the first half way decent offer they receive and get the property under contract. Job done … Next! Agent happy, seller mostly happy, buyers downright miffed!
At the moment I am hearing it all the time. One poor soul yesterday told me they made an offer on a property, the agent advised that it was not accepted (at least not yet) and that the seller has decided to take the property to auction. The buyer was told to wait for the auction. Lo and behold, the property was then sold prior to the auction for not much more than he offered and certainly for a figure that he would have paid significantly over. The agent never contacted this buyer to let him know it was going to be sold or to give him a final chance to increase his offer. Let’s just say he was a little “peeved”. Equally I am “peeved” because every time that happens, the seller unknowingly misses out on more money and it negatively impacts the value of every other property in the area … including mine!
So what do you do? It’s a tricky one because of course if you seem too keen it can of course be used against you. Don’t overdo your enthusiasm for the property but definitely keep in touch with the agent. Make sure they received your offer, find out when you should expect a response, if you haven’t heard back then follow up again, and again, and again, and again. If the campaign is converted to auction, keep following up with the agent and making sure nothing has changed. And through it all, be super nice. No matter what. No matter if you think you are being manipulated or played. Sadly the home buying process is not transparent and is fraught with the opportunity for agents to play God.
Disclaimer: Before you shoot the messenger. I just want to clarify that my team don’t engage in poor or lazy practice and there are many others that don’t but sadly there are some that do and it’s always handy to know how to circumvent them.
And that’s a wrap for my most long-winded EOFY market update yet! Certainly, if you want to discuss any of my ramblings above, reach out to me directly for a chat. If you’re a buyer or seller out there reading this and are still left feeling unsure on what your next steps should be, shoot me a message and I’ll help you regain the confidence you need as you navigate the buying or selling journey.
