‘$100k blindside’: Home buyers stung by greedy vendors
Greedy vendors are squeezing every dollar out of desperate home buyers, some even holding out for unrealistic reserves that have forced sellable properties to be passed in, experts say.
Over the past few weeks, several houses have failed to sell with real estate agents quietly claiming it is purely because of unrealistic reserves.
One agent, who did not wish to be named, said one property they listed failed to sell at auction after the vendor factored in a 20 per cent increase in the reserve to offset the rising property market.
"They set a reserve on how the market was trending and it blindsided us," they said.
"When it passed in, they added another $100,000 to their asking price."
Queensland is amid a property boom not since the mid-2000s and over the past 12 months with the median asking price across the state has risen dramatically, according to SQM research.
The biggest increase in the median asking price has been at Biarra, some 85km northwest of Brisbane in the Somerset Region, where it has jumped by 40 per cent, year-on-year, for April.
The next best has been Goombungee and Greenmount, both rural towns outside of Toowoomba, with respective 38.9 and 27.7 per cent rises.
The only Brisbane suburb to make the top 10 was Wavell Heights where the median asking price jumped from a tick over $720,000 to more than $919,400.
Buyer's agent Melinda Jennison said if a high-end property failed to sell at auction then it was likely the vendor had unrealistic expectations.
She said it could come down to real estate agents needing to temper a homeowners' enthusiasm.
"A lot of it comes down to ensuring that the sales expectations are in line with the market on auction day," the managing director of Streamline Property buyers said.
"Anything that's going to sell on the day, in my opinion, has been achieving a premium price and if it does not sell, that's because sellers are beyond where the current market is sitting."
Reputable auctioneer Justin Nickerson touched on the subject of overzealous vendors in a recent newsletter.
After first noting that clearance weekend rates at auctions had exceeded 80 per cent during April, he wrote there was still a "blip on the radar" when it came to homeowners wanting too much.
"As noted last week, the only blip on the radar is out-of-touch expectations from some vendors but, all-in-all, the conditions are still remarkably favourable to sellers," he wrote.
It's a point that resonates with buyer's agent Jamie Charman who said greed was certainly a factor with vendors, but that did not mean they were wrong.
"Vendors are pretty greedy in this market because they are listening to a lot of media reports and getting caught up in it," he said.
"They tend to put on a couple of extra hundred thousand sometimes, and at times they are getting it.
"No one knows where the ceiling is, it could be in one or six months time, and they are trying to counteract that with their reserve."
Besides asking too much for a property, Ms Jennison said houses were being auctioned in suburbs where traditionally risk-averse buyers avoid unconditional sales.
She said auctions can spook first home buyers or low-to-middle income families who are highly cautious about investing in a house.
"I think some agents are incorrectly marketing properties for auction in areas that are not typically where auction properties are sold," Ms Jennison said.
"Houses in the middle, and certainly in the outer ring suburbs, are very unlikely to attract a lot of buyers prepared to buy unconditionally.
"A buyer at a lower price point is typically much more heavily reliant on finance, and it's a big deal to go and bid at auction."
SQM Research managing Louis Christopher said he has not seen a housing boom like this in Greater Brisbane since prices jumped 63.5 per cent between the September quarter of 2003 and the June quarter of 2008, according to the ABS.
He said the numbers are cross-checked to rule out false positives and Wavell Heights may have just been playing "catch-up" on neighbouring suburbs over the past year.
"It's the greatest level of buyer activity for some time … although in 2016 to 2020 there was a gradual rise but no boom," Mr Christopher said.
"It does appear that Wavell Heights is genuine, and it was coming off a low base with $720,000 being low for that area."
Qld Top 10 median asking price increases* (Apr 20 - April 21)
Biarra: $309,007 - $433,701 +40.4 (per cent)
Goombungee $322,318 - $447,741 +38.9
Greenmount $306,871 - $391,974 +27.7
Wavell Heights $720,000 - $919,400 +27.5
Woombye $722,792 - $902,486 +24.9
El Arish $355,922 - $441,179 +24
Mudgeeraba $795,574 - $977,514 +22.9
Petrie $458,589 - $555,527 +21.1
Nobby $268,565 - $324,781 +20.9
Kilcoy $380,948 - $460,542 +20.9
*Source: SQM Research
Originally published as '$100k blindside': Brisbane home buyers stung by greedy vendors