My dataset for Logan City which is just south of Brisbane shows that over the last 3 months house prices have risen 4.6% in this part of the world. This seems outrageous to me given the credit crunch that the world has just been through. However I now have a story that I wouldn’t have believed if somebody had told me but that demonstrates just how crazy the property market still is in this part of the world.
For various reasons a close relation who lives in Logan City needed to sell their house. Now I must say that the house was impeccably presented. Think of all the recommendations from the House Doctor for how to extract maximum value and you can imagine what the house looked like.
Now the first stage was to get the real estate agents in to value the house. Three agents turned up and duly placed their bids. The prices were what my relation expected having looked at similar houses in the area however one agent was a little bold and suggested the market was quite ‘buoyant’ at the moment and that maybe the best option was to place the house on the market without a price.
Now to the demonstration of how crazy the South East Queensland housing market is. Within 2 hours of having placed the house on the market an offer had been made that was 11% above the highest real estate agents valuation. Of course the offer was accepted. The only hick up before settlement was the buyer of the buyers house struggled for a few days to secure finance. My relation therefore had to extend the date when the house sale went unconditional for a few days. This was a bit of a risk but which fortunately for them ended happily. The house exchange ended up going through on time.
My statement to my relation was that they had done really well and to enjoy it. They are over the moon with all the extra cash that they hadn’t planned on receiving.
My question is how much longer can this asset price inflation and in particular house price inflation carry on. US house prices have deflated considerably. UK house prices are showing some very small initial signs of running out of steam. If this continues it will be impossible for me to ever retire to Australia and I will be trapped in the UK forever.
As always DYOR.
It's a hot market in Melbourne too (where I live). The auction clearance is over 70% and there is no sign of recession. Well, not that we had one, but the slow down is over. In my area, the price has gone up on average 30% in the past 2 years, and this is a working class suburb. It's the upper class suburbs that suffer the most.
ReplyDeleteWe are still under-supplied and the price increase is relentless.