Aussie Boom Suburbs: No Sight? No Problem — Aussie Real Estate Market
There’s a new trend sweeping the Aussie real estate market — buyers purchasing sight unseen.
I’m not just talking about investors here.
Home buyers are slapping offers on the table before they’ve even set foot across the threshold.
Part of this is due to the lockdowns.
Where ‘Doing the right thing’ — aka following government orders — doesn’t allow for real estate inspections.
At least that’s the interpretation of ‘Doing the right thing’ in Melbourne. Sydney is less stringent.
Even the sales agents in metro Melbourne are currently prevented from recording video walkthroughs for interested punters.
Still, nothing stops buyers these days.
Hundreds of auctions listed over the last few weeks in Melbourne have been converted to private sale.
I called an agent yesterday about a property in Heidelberg West.
It was set to go to auction next weekend.
Now it’s being sold prior.
It’s a knockdown two-bedroom unit on a tiny handkerchief patch of land.
He told me the enquiry rate was ‘INSANE!’
The property was uploaded onto the net just as Melbourne entered lockdown.
Not one person has stepped foot inside the place.
Yet they still have enough interest to run a multi-offer campaign.
‘How are you going to handle the offer process?’ I ask.
‘Via a whatsapp chat group.’
I can see it now — everyone frantically typing in their bid until they get to the highest number.
That’s a first for me.
Most agencies auction via Zoom or Google Meets.
Still, as they keep telling us, we’re in ‘unprecedented times’.
Lockdowns are not the only reason buyers are purchasing sight unseen.
The other is the speed regional markets are moving at.
In Vic, it’s centralised around the larger towns of Ballarat, Geelong, and Bendigo, etc.
This is where the great exodus from Melbourne is fleeing.
To be clear, the trend started prior to the COVID-panic.
After the first half has run its course, affordability pushes buyers into outer lying areas.
Smaller capitals (by population), along with regional cities, gain the benefit — just as we’re seeing now.
Add to this trend — fleeing Melbournians buying to escape ongoing city lockdowns — and you can see where this is going.
Take Wendouree, Victoria.
It’s a suburb of Ballarat first home buyers target.
One of the areas that the state government pushes buyers to purchase in is under its ‘HomesVic shared-equity scheme’.
In every negotiation in this area, I’m competing against multiple bidders before the property ads even hit the net.
Once again, more often or not, these buyers haven’t set foot in the joint.
They’re making assessments based on photos taken with a fisheye lens and slapping the offer down subject to a building inspection to ‘be safe’.
It might sound insane, but there’s no quick stop to this trend. It’s often the only way you can secure a deal and beat the competition.
Prices are likely to be trending markedly higher in these regions to the peak of the cycle.
The chart below shows the start of this trend clearly.
Wendouree is an area that pretty much went nowhere until recent times.
Now — boom!
The houses I’m looking at have doubled their value in 3–4 years.
And right now, you don’t need to take on a massive mortgage to get in.
You simply need to know the areas to target today in the sub $500K range — like Wendouree — and secure your seat.
Suburbs that could be pushing the ‘million dollar’ mark by the end of this decade if it keeps pumping at this pace.
I share the secrets for accurately timing the market — buying at the bottom and selling at the peak — as well as identifying future boom suburbs in Cashmore’s Real Estate Wealth and Cycles, Trends & Forecasts.
For The Daily Reckoning Australia
PS: Australian real estate expert, Catherine Cashmore, reveals why she thinks we could see the biggest property boom of our lifetimes — over the next five years. Click here to learn more.