Brisbane homebuyers are adopting an ‘early bird’ strategy to lock down a home, with new figures revealing an increase in buyers snapping up real estate before it hits the highly competitive property market.
Fresh analysis by the Real Estate Buyers Agents Association of Australia (REBAA) revealed a jump in the number of homes selling off-market – either without a sales campaign or before the campaign can begin.
REBAA analysed the latest property data to compare listing and sales figures and found nationally, annual sales activity increased nearly 3 per cent in the 12 months to September, however, total stock levels were down nearly 15 per cent over the same period.
In Brisbane sales volumes were down 2.3 per cent year-on-year in September, however new listings had dropped 18.7 per cent in the same time and total listings were down 17.3 per cent.
REBAA President Melinda Jennison said the market mismatch was not only pushing property prices higher, but underpinning a pivot to off-market properties by increasingly desperate buyers.
“When you have stronger sales activity but significantly lower listings available, it’s clear that more homebuyers and property investors are seeking off-market opportunities in an attempt to secure their next homes and investments,” she said.
“However, with property prices rising in most jurisdictions, off-market properties are not the easiest to access for the everyday property buyer.”
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Ms Jennison said generally, off-market buyers needed to pay a premium to prevent sellers and agents taking a property to market.
“To buy off market, really does not guarantee you’re buying under market value or paying less, but it does enable you to buy with less competition,” she said.
“Perhaps, it gives you more time and in some instances the ability to negotiate with the seller rather than being part of a multi-offer situation or exposed to a bidding war at auction.”
Place Bulimba lead agent, Pat Goldsworthy said while the Brisbane market was experiencing what could be deemed an increase in off-market sales, many were what he would describe as a pre-market sales.
Mr Goldsworthy said pre-market sales were often part of a two-phase strategy where a property was presented to a select group of buyers before being publicly advertised for sale.
“If a property doesn’t achieve the desired sale price, it will then go to market,” he said.
“Buyers are very hungry at the moment and are jumping on those pre-market opportunities.”
Mr Goldsworthy said in nearly all cases, a vendor and their agent would only sell off- or pre-market if the price was right.
“I recently had an elderly couple selling a post-war home in Norman Park with city views,” he said.
“They were going to go to auction with another agency but were quite scared by the process.
“I already knew which buyers would have attended that auction so I approached them and within eight hours I had three or four offers on the home.
“It sold within nine hours to a buyer for a great price.”
Mr Goldsworthy said in the $4m – $10m price range, vendors and buyers tended to be time poor and desired discretion, so were drawn to idea of a quick, private off-market sale.
“These buyers are looking for off-market opportunities through buyer’s agents and relationships with local agents,” he said.
The REBAA analysis estimated up to 20 per cent of properties nationwide – or about 100,000 per year – were sold off-market, however, accurate figures were hard to come by given the private nature of these property transactions.
Ms Jennison said there were a variety of reasons sellers opted for an off-market sale.
“Often, even in strong market conditions such as now, vendors desire a private sale over anything else, perhaps because it is a deceased estate, they are going through a divorce, or they simply don’t want the hassle of open homes every weekend,” she said.
“Purchasing off-market can be a sound strategy because it reduces competition with other buyers, especially when listings are thin on the ground like they are at the moment.
“That said, although they are considered the ‘Holy Grail’ of real estate, buyers must undertake the necessary due diligence to ensure they are not being sold a lemon wrapped up in a shiny off-market cloak that may also be overpriced.”
Ms Jennison said in robust market conditions, buyers needed to understand the pros and cons when searching for off-market real estate.
“Number one, it is not easy for buyers who may purchase a home a few times in their lifetimes to find off-market property,” she said.
“This is because they simply don’t have the networks or the relationships with sales agents to be on their radars when these types of properties become available.”
Mr Goldsworthy said buyers needed to be in a position to act quickly and offer a relatively clean settlement if they wanted to buy off market.
“They also need to be calling agents in the area where they want to buy and explicitly asking to be kept in the loop,” he said.
“An agent is going to keep them in loop if they feel (the buyer) is a genuine offer who will perform.”
Originally published as Take it off: How buyers are beating out the competition
