First home buyers are being swamped by soaring house prices and “extreme offers” as historic low interest rates and reverberations from the COVID-19 pandemic supercharge the property market.
Following a call-out to 9News.com.au readers, our inbox was flooded with messages from buyers who have finance approved but are being consistently beaten to the punch by offers made far over the asking price.
Aimee-lee Koch works full time, is a single mum and has her deposit ready to go. She has no issue with securing finance and is living with her mother to save as much money as possible while her furniture is in storage.
“It’s taken me years to be financially ready after my fiance passed away and now that I’m ready, all my offers on homes are getting knocked out of the park by extreme offers anywhere from $1,000 to $40,000 over the asking price. I am at the point of giving up.,” Ms Koch told 9News.com.au.
“Honestly, I thought buying my first home would be a happy experience.
“I am so disheartened and depressed due to the market.”
Reader Rajesh and his wife are both on six-figure incomes and have moved back in with his parents to help boost their deposit.
He says he has been actively on the market for six months, but has been struggling to compete with buyers downsizing from larger properties or other buyers leveraging their parent’s equity as guarantors.
A major issue he signalled was the onus on the buyer to obtain building and pest inspection reports on properties they were not guaranteed to buy.
“These reports are not cheap, as well the cost to have a contract of sale reviewed,” he told 9News.com.au.
“When you add it up, we risk losing hundreds of dollars in the process of doing our due diligence for every property we miss out on each week. I think more procedural fairness is warranted in this market for first-home buyers.”
James Butler, from Victoria, recently sold an apartment and is now looking for a home. He says huge demand is speeding up the rate of offers made on properties.
“It just seems that a home is on the market and within days it’s under offer. Even if its going to auction it ends up selling in a private bid due to demand,” Mr Butler tells 9News.com.au
“So now I feel whenever we see a new home we have to go to the high end of the proposed sale price if not more just to get a sniff at a home.”
Chloe Riley is from regional NSW and lives with her partner and their two children. She reports that at almost every house they inspected the agents were “facetiming people from Sydney”.
“We finally had an offer approved, had a building inspection done, and taken friends and family past the house to have a look and show off ‘our new home’ and the day before going to the conveyor to exchange contract we were called by the real estate agents assistant and were told they were sorry but had now accepted a higher offer,” Ms Riley tells 9News.com.au
“We understand it’s in the seller’s best interest to get the most money, but it’s definitely a kick in the guts after having our kids so young and waiting and working so hard and long to finally save enough to have a deposit and for now the market to go crazy like this.”
The pain doesn’t appear to be over anytime soon.
“It would appear that even in the midst of a global crisis, Australians love nothing more than getting into a new house,” Dr Oliver explains.
“And at this point in time, it makes some sense for a lot of people. Houses may be costly, but credit is cheap.
“Despite the fact that Australian property ranks amongst the most expensive in the world relative to incomes and rent, household interest payments as a share of income are at their lowest levels since the mid-1980s.”
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