The Harsh Reality of First Home House Hunting in Brisbane
If you’re a first-time home buyer and looking to buy in one of Australia’s capital cities, it’s easy to get discouraged. A generation ago, you’d save your deposit, narrow down where you wanted to live, have your finance pre-approved and then everything would fall into place at auction. Fast forward a few years, and the process hasn’t changed. It’s getting the result that’s so difficult.
Soaring Property Prices
Of all Australia’s capital cities, the Brisbane property market isn’t appreciating at quite the same rate as its southern cousins seem to be. In dollar terms, the Sydney median value is rising at a whopping $4,262 per week. A lack of supply though is one of the main issues keeping pressure on dollar values in Brisbane and the other capital cities.
Queensland also recorded a population growth of 2.2% in the 12 months to 30 September 2022, above the national average and the highest of all states and territories. So, if you’re a first homebuyer in Brisbane, you’re competing with a huge influx of internal migrants.
Just Out of Reach
Take the case of Lennon and Bec. Lennon works two jobs. He's a fourth-year apprentice during the week and works in a shop on Sundays. Bec works and studies. They've been diligently saving for a house deposit, but every time they get close, the market puts house prices just beyond their reach. For three years, the couple has hit the open home market, travelling further afield with promises of affordable properties only to find the estimated price range is nowhere near the seller’s actual asking price.
"Half a million dollars should get you something. It's bad enough that half a million gets you a run-down renovator's nightmare in the far outer suburbs, but what's worse is that after commuting way out of Brisbane, the property is actually at least $100K more than originally advertised. It's been three years of this and it's exhausting," said Lennon McGuffie after another fruitless weekend of house hunting.
Underquoting Woes
Brisbane’s median housing price sits at $694,495 – below Sydney’s $1.006 million and Melbourne’s $743,554. However, that’s little comfort for Lennon and Bec who are just trying to get into their first home. For them, underquoting has made house-hunting a huge waste of time.
For others, it can be a waste of money. Homebuyers who believe they’ve found the right property have paid for pre-purchase building inspections ahead of an impending auction, only to discover on auction day that the reserve price was well above their budget.
And then there are the properties that fail the building inspection. The decision to buy a property is momentous – but when the only ones you can afford are full of structural red flags, it can feel hopeless.
"These young adults are getting building inspections on properties that for all intents and purposes fail. They come back to me asking what they should do, and the answer is that the property is already $100K above their budget and will need another $100K to fix the problems. They face disappointment after disappointment. I really feel for them," said Brisbane Building Inspector Andrew Mackintosh.
How Research Can Help
Lennon and Bec aren’t the only ones frustrated by underquoting. Complaints about the practice have soared across the country with both Victoria and NSW taking steps to address the problem.
Unfortunately, Queensland is considered to have the vaguest legislation around underquoting, which means a less transparent market for buyers. So what can buyers do?
Researching recent property sales in your preferred suburbs is a good way to gauge the market. Make a list of the final sale price of properties similar to the ones you’re considering. This will help you determine current property values and get a clearer picture of whether that suburb is truly within your budget.
