A survey of Australia’s top buyer’s agents has revealed a lack of good quality established property is the number one issue facing today’s home buyers.
The survey, conducted by the Real Estate Buyers Agents Association of Australia (REBAA), showed 70 per cent of respondents cited lack of stock or low inventory as the major issue facing the nation’s buyers.
The survey also revealed a combination of low interest rates and a shortage of quality established properties was leading purchasers to pay premium prices to secure properties and inflating vendor expectations.
REBAA NSW member Amanda Segers describes the situation as ‘depressing’ for many home buyers who are faced with having to compromise, overpay or wait extended periods before something suitable comes onto the market.
“Buyers are faced with open homes filled with crowds of other buyers and their tape measures,” said Segers.
“Without the luxury of inspecting a home without the crowds it’s pretty disheartening for the regular home buyer.”
These sentiments are echoed by fellow REBAA Newcastle member Tiron Manning who says buyers are being pressured into making poor purchasing decisions.
“It’s putting pressure on buyers to sign unconditional contracts without time for adequate due diligence or they’re simply relying on reports supplied by the vendor,” said Manning.
REBAA NSW member Sebastian James estimates the amount of good quality stock in Sydney is down around 40 per cent compared with this time last year.
James said many are turning to buyer’s agents simply to tap into their industry contacts so they can gain access to stock prior to mainstream marketing campaigns.
“As a business off and pre market purchases now account for more than 50 per cent of property we have secured for clients this year,” said James.
“The advantage is reduced competition and fairer pricing driven by comparable sales and not by the fear and emotion experienced in the majority of property transactions.”
In the nation’s capital the situation is no different.
REBAA ACT member Claire Corby said the major issue facing buyers in her patch was the fear of missing out.
“Supply is down and demand is up big time in Canberra,” said Corby.
“Auctions are exceeding expectations in a growing number of suburbs with more emotions on display as buyers try to compete for the new quality homes on offer.”
REBAA QLD member Stephen McGee said the shortage of good properties in all areas across Brisbane was compelling home buyers to pay top dollar for houses that probably wouldn’t be top of their list.
“As a consequence selling agents are then reluctant to market their property without a price, leading to an ‘auction’ or ‘for sale by negotiation’,” he said.
“This then leaves the buyer at the mercy and persuasion of the selling agent and online valuations to determine what the house is worth.”
In the lifestyle locations of the Gold Coast and Byron Bay lack of good quality stock is frustrating buyers and overbidding is becoming a major problem.
“The Byron Shire market is so heated that anything good that is listed at fair value has a number of competitive bidders,” said REBAA Byron Bay member Michael Murray.
“Once I know a property is fair value I offer full price, get it off the market and then exchange as soon as possible.
“The ability to recognise value early is key and why I would recommend to anyone to use a local, experienced buyer’s agent wherever they are.”
In Melbourne the stock shortage has been broadly fuelled by home upgraders opting to buy before they sell in an effort to avoid their spending money being devalued in a rapidly rising market.
“Unfortunately it’s a bit of a ‘chicken and egg’ phenomenon right now as stock shortage is precluding these upgraders from securing their next home and subsequently selling,” said REBAA VIC member Cate Bakos.
“The shortage has had a marked effect on higher than anticipated sales results based on larger numbers of emotion fuelled buyers fighting it out with increased borrowing capacity in the current low interest rate environment.”
In Tasmania buyers are grappling with the challenge of a rising market and recognising fair market value, according to REBAA TAS member Rob Zubin.
“Buyers here are finding the challenge of how to be competitive without paying way over the mark,” he said.
The second most reported issue the survey revealed was affordability of available homes.
REBAA NSW member Henny Stier said many first home buyers were being ‘unrealistic’ in their expectations and that they needed to be prepared to move several times to get their ‘dream home’.
“The era of buying one home and living in it for 30 or 50 years like our parents is no longer realistic,” said Stier.
“Very few buyers are able to buy their ‘forever home’ on the first go and many are grappling with the reality that they don’t get a lot for their money and then put off buying only to discover they are being left behind chasing an upward market.”
REBAA president Rich Harvey said the results of the survey illustrated how much home buyers and investors needed the help of a buyer’s agent.
“The survey shows that it’s a seller’s market in most of the country,” he said.
“In order to navigate these issues, to understand and recognise good value early, it’s more important than ever that buyers have a REBAA accredited buyer’s agent on their side to guide them through one of the biggest investments of a lifetime.”
For a full list of REBAA accredited buyer’s agents visit, www.rebaa.com.au
Article first appeared on the REBAA website here