Surge in house prices fuelled by ‘new FOMO’
THE new FOMO — fear of moving on — is driving property prices, with potential sellers frozen over selling at the peak and then having to buy in the same market.
Buyersbuyers co-founder Pete Wargent said there was “exceptionally low” stock, which meant that your own home was appreciating but “so too is the value of the property you plan to upgrade to next”.
“In the suburban home market there’s a clear risk that prices might gap higher in the first half of this year. Eventually the frenzied activity will slow as more supply comes on to the market, but it could take some time for things to calm down, and prices will probably rise in the meantime,” he said.
Sarah Megginson, senior editor of home loans at Finder, said it was a common concern for sellers “especially in a market that’s heating up”.
“If you sell your home prior to finding another one, that’s going to add a lot of pressure as you’re on a deadline,” she said.
Chairman of the Property Investment Professionals of Australia, Peter Koulizos, said “sellers are right to think that if they sell in a hot market and then buy in the same hot market, there is no financial advantage”.
But he said waiting might not be the answer either: “Sellers might be disadvantaged if they sell first, leave it for a few months, property prices increase substantially and then try to buy into an even more expensive market.”
Eddie Dilleen, of Dilleen Property, said anyone selling one property to buy another could buy time by delaying settlement for the one they sell. “Instead of 30 days make it 60 or 90 days,” he said.
Mr Koulizos added that a seller’s market was not the time to make a low-ball offer. “When you put a bid or offer in, make sure it is attractive, for example, there should be no or limited conditions and the money you offer is around the true market value.”
Real estate agent Savva Koulouris of Place Woolloongabba said “any price point right now is starting to be busy across the board” especially with upgraders and interstate buyers on the hunt.