Southeast Queensland braces for a surge in spring buying
Local buyers are feeling the heat from interstate investors who are coming in droves and snapping up Queensland’s cheaper offering
The big-picture growth prospects for Queensland may not be as sexy as those of Sydney and Melbourne in recent times, but local experts are upbeat that it’s going to be a solid spring buying season.
According to Zoran Solano, senior buyer’s agent at Hot Property Buyers Agency, buying activity is building up and the market is getting more competitive.
“Every property on the market that we’re considering is in a multiple offer situation and we expect that trend to continue till the end of the year,” he says.
David Bennett of Raine & Horne Qld notes that there’s currently a low level of listings that has helped push auction clearance rates and prices even higher.
“In Southeast Queensland (Brisbane, Gold Coast and Sunshine Coast), we noticed that listings for residential properties have been hard to secure because the vendors are reluctant to move at this stage,” says Bennett. “We’re confident that spring is going to be buoyant in terms of listings. Confidence among buyers and sellers is showing signs of returning. Vendors generally get very close to get what they want.”
Bennett says the tight competition has made buyers more willing to meet the market.
“I think when people go to an open home and find that there’s already a contract on the house, they’re more willing to pay the asking price. They’re more driven by feature, not by price.”
Investors are particularly strong in the unit and townhouse sector, he says.
“I’ve never seen it so strong in the last 10 years and it’s right across SEQ. I would say at the moment the investors are being driven by the Sydney and Melbourne markets. I see all areas in the SEQ region performing well over the medium term.”
The increasing numbers of interstate investors coming in is starting to bother local buyers who are not used to seeing such exuberant buying, Solano says.
“The local markets are being inundated with interstate buyers,” he says.
“What we’re seeing is that interstate buyers fly in over the weekend, inspect some properties and then buy. It’s starting to frustrate local buyers. We’re not used to this level of interest since seven to eight years ago when Brisbane boomed. There are a lot of Sydney, Melbourne and South Australian buyers’ agents coming here and buying for their clients. They’re getting a bit of a reputation for heating up our market.”
Interstate investors beware
As more investors move into Southeast Queensland, Solano warns they are facing the risk of paying too much for property.
“The biggest concern is that interstate buyers are overpaying,” says Solano. “Because they’re used to paying high prices in their home cities (Sydney and Melbourne), when they come here and see properties are listed for $500,000 even if they’re located away from the city, they fall over themselves. They don’t mind paying a premium.”
Solano says that when buyers get into multiple offer situations they are putting themselves at risk, especially if they’re starting to remove conditions that are designed to protect them.
For example, he is seeing more and more exuberant buyers removing the finance clause from the contract to make their offer more competitive.
“These buyers still need finance and they’re taking the risk by not putting the clause in the contract due to competition,” he says. “You have to protect yourself and put in the appropriate clause.”
Rapid growth areas
Suburbs within 10–15km from the Brisbane CBD are now beginning to exceed the prices achieved during the boom years of 2007–8, according to Solano.
“We’re starting to see price growth in uncharted territory, and that makes local buyers even more frustrated. Buyers from Sydney and Melbourne are used to outbidding each other because of strong growth.”
Solano prefers to focus on the suburbs within 15km of the CBD or closer, to maximise growth potential.
“The reason is simple. The farther you go out of the city, the more volatile the market becomes,” he says.
He also warns against buying in large apartment complexes of 30–40 or more units to avoid the risk of oversupply.
“Focus on boutique complexes in areas that aren’t oversupplied. If you look at the amount of construction that’s going on in Bowen Hills, Fortitude Valley, Kedron and Chermside, you can see there is a lot. There are pockets of Mount Gravatt
and Coorparoo that are oversupplied. These are the markets to be cautious of if you’re buying in Brisbane. It could potentially turn into what happened in Melbourne in terms of oversupply,” he says.
SUBURB TO WATCH
Daisy Hill: Buyers eye desirable suburb
The fact that the median house price in Daisy Hill has grown by a good 8.5% over the last 12 months indicates that people are already catching on to the great value this suburb offers. But the improving features and solid rental returns of the area suggest that increasing demand and capital growth could well be on the way.
Located 30 minutes from the Brisbane CBD and Gold Coast, this quiet suburb has the popular Daisy Hill Regional Park which provides bushwalking opportunities for visitors to see koalas and other wildlife.
It is also close to the popular Hyperdome Shopping Centre and Logan Hospital, which has recently undergone a $145m project so that it can better accommodate the needs of the region.
Peaceful cul-de-sacs that are a good option for families include Felice Court and Stormbridge Court. They benefit from proximity to schools such as John Paul College and St Edward’s. Meanwhile, parents who work in the city can take advantage of the City Bus Route on Chatswood Road and access to the M1 Motorway.