As featured in Nine.com.au
With over 2200 property listings heading to auction last weekend across Australia, it would appear that the real estate sector is finally getting the supply it needs to meet demand.
However, even with the increased supply, consumer sentiment appears to be remaining resolutely strong.
According to Domain’s latest data, Melbourne, Sydney, Adelaide, Brisbane and Canberra’s clearance rates for Saturday, February 19, were all above 70 per cent – clear evidence that there’s still hunger in the market for real estate.
One industry expert is cautioning buyers’ strong demand and eagerness to get into the market, though.
Dan Sofo of Unicorn Buyers Agents said that increasingly in the post-covid era, he’s seeing property buyers get carried away at auctions and buying events, purchasing homes without crossing all the Is and dotting all the Ts… and it’s costing thousands.
“In a hot market, even bastard properties get bought up,” Mr Sofo said.
“I am seeing too many people snap up property in the heat of the moment, spending a lot of money on homes without doing their due diligence just because they fear that if they don’t buy, they will miss out, and property values will keep soaring.”
Mr Sofo highlighted that some specific precautions to identify significant problems were also being neglected.
“Quite a number have hidden fundamental issues like foundation problems, electrical issues, roofing issues, and pest issues,” he said.
“I am really concerned by the number of people I see at auctions buying up properties that are going to be money pits. Many of these people are stretching to purchase the property, let alone deal with all the soon-to-be-realised money pit issues.”
Another issue exacerbated by the coronavirus pandemic has been its effect on spurring inflation in Australia, which has, in turn, sent the cost of building materials through the roof.
Mr Sofo said this is causing utter turmoil and could spell financial ruination for buyers who’ve hurriedly purchased a home that needs work.
“The price of timber went up 50 to 100 per cent last year. Steel prices increased by 30 to 60 per cent, and concrete prices saw a 20 to 40 per cent increase,” Mr Sofo said.
“Due to supply chain shortfalls and labour shortages, building and renovation projects are also taking longer to complete.
The remedy for this growing issue, Mr Sofo explained, was for would-be buyers to forget the hype, stymie the ‘fear of missing out (FOMO)’ mentality, and focus on the fundamentals of buying a home.
“My strong advice for people is to stay calm, get back to basics, revisit the foundations of good property buying and investing, and make good decisions,” Mr Sofo said.
