Here’s a house in regional Queensland that my wife and I were considering purchasing
late last year.
It’s a four-bedroom, two-bathroom, double-garage house in a fairly nice neighbourhood.
The price was listed as “Contact Agent”, so we clicked on the “Get in Touch” button
and sent a message asking the agent how much.
We noticed that the agent was not one that we regognised, Easy Sell Rent, so I did a
quick search online and found out what it was all about.
“Skip the commission and save!
Forget the middleman and save thousands in commission.
We’ll get your property on Australia’s most popular real estate websites”.
Okay, so basically it’s a service where sellers can sell their own house without the
need for an agent by advertising through Easy Sell Rent which uses the two biggest real
estate websites.
So anyway, I got an SMS back from “the agent”, obviously the owner, saying, “Hi, I’m
now looking for an offer of $485,000 ono.
Cheers”.
I replied, “Thanks, I’ll talk to my wife”.
At the time, our budget was fairly limited – much less than $400,000 – so we never
made an offer.
However, recently, just last week, we saw that this house was still on the market.
So it’s been on the market for a good six or more months.
We figured that “the agent” – the owner – was having a tough time selling.
If you’ve seen the news of late, you’ll know that Australian house prices are through
the roof.
It’s never been an easier time to sell.
However, this guy, still couldn’t sell his house.
What was wrong?
So I thought I’d send him another text, “Can we please inspect so-and-so address?”,
dated five months later.
He replied, “Price has now changed to $570,000 and above.
Still want to inspect?”.
I felt like saying “F-off”, but I was a bit more courteous, “Sorry, that’s out
of our price range”.
Anyway, the house is still on the market.
I guess at least part of the reason is that he’s not using an agent and maybe people
are a bit hesitant to deal with the owner directly.
Or it could just be that he’s a greedy son of a gun.
What are your thoughts?
Here’s another house that we looked at recently.
Again, no price.
“Offers to Purchase!”.
Again, it’s a four-bedroom, two-bathroom, double-garage house in an equally nice neighbourhood.
We arranged an inspection and went to have look at it.
We quite liked it.
It was pretty tidy for a 26-year-old home.
We did our research and looked at its sale history.
We saw that it sold just last year for $431,000.
Our first question was, “Why are they selling it so soon?”.
I’ll answer that shortly.
We also checked the estimated value range and found it to be worth between $460,000
- $530,000.
So we thought we’d push our luck and make an offer of $450,000, just a little bit below
that range.
Here’s the letter that my wife wrote to the agent.
“Hi, you met my husband and I earlier today at so-and-so address.
We would like to make an offer of $450,000.
Could you please present this to the owner and let us know what they think?
Kind regards, my wife.”
Anyway, a day later, we got a reply, “Hi, I hope you are well.
Unfortunately, they would like to list the property offers from $600,000”.
Would you be interested in making another offer?
Thank you.
Kind Regards, the Agent”.
I think you can guess our reply.
Basically, a lot more courteous version of what’s shown on-screen.
So back to my question, why are the owners trying to sell a house they only bought last
year for $431,000?
I think they saw an opportunity to make a killing.
They saw the price estimates and decided to add an extra $70,000 to the maximum and try
to get more than $600,000.
I think they’re confusing regional Queensland for inner-city Brisbane or perhaps Melbourne
or Sydney.
Anyway, I think you can see that the asking prices in regional Queensland are insane.
Somebody has lost their mind.
Here’s another house in a fairly sought-after suburb.
It’s only three-bedroom, one-bathroom, single garage.
We went to inspect it maybe a month or two ago back when house-buyers were truly insane.
There were about 40 or 50 people lined up wanting to look at the house, all socially-distanced
of course.
When it came to our turn, I asked the agent at the door if I could look inside the garage.
She said no.
I said, “Why not?”.
She said, “The owners don’t want you to look in there”.
Then I said, “Well, how can I make an offer if I can’t even look in the garage?.
She replied, “Well, we’ve already had quite a number of substantial offers last
night”.
“But this is the first open-day, isn’t it?
Do you mean they made offers without even looking at the house?”.
And yes they did.
A number of people made offers based on these pictures alone.
I couldn’t believe it.
What the hell are people thinking?
And this has been true over the last few months across Australia.
I’ve read stories from agents saying people are making offers without actually physically
inspecting the property.
I just can’t understand this insanity.
“Ray White Paddington Real Estate Agent Judi O'Dea said ‘fear of missing out’
drove buyers to skip open houses and auctions to beat the competition.
Stock is tight at the moment and buyers will do whatever they need to do to secure property.
I had a situation where I sold a house to a gentleman and at the end of everything he
said, ‘my wife hasn't seen the house, can she look through on Wednesday?’.
I nearly dropped the phone, but I knew they were looking and were desperate.”
Well, it’s not all grim news.
According to some news articles, there are some signs that Australia’s housing market
is starting to simmer, at least according to an REA Housing Market Indicators report.
Looking at the report, which was released this month and authored by Cameron Kusher,
Director of Economic Research, we can see that weekly ‘For Sale’ searches have fallen
dramatically over the last few weeks.
This is a measure of the volume of visitors to the realestate.com.au website searching
for properties for sale with search volumes lower across all states and territories.
Email enquiries to agents are also on the way down for all property types.
Whether this is a good or bad thing for first home-buyers like myself, I do not know.
Time will tell I suppose.
Anyway, that’s my little story today about crazy regional house prices.
Let me know your thoughts below.