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Sellers’ fear of being out halts Brisbane investments
Investors’ opportunities have slowed in Brisbane as sellers’ FOBO, the fear of being left out of a rising market, has made many home owners hesitant to list their properties, a property expert said.
Brisbane’s property market has stalled as rising prices, high costs, and FOBO have left many sellers too scared to list, creating a severe supply shortage despite strong demand.
According to Tailored Buyers Agents co-founder, Leanne Spring, Brisbane’s sellers have developed FOBO – “the fear of being out”– which has been acting as a handbrake, lowering listing numbers in the otherwise booming market.
According to SQM Research’s latest property listing data, Brisbane has seen a 12 per cent drop in the number of properties listed over the past year, making it the second-most undersupplied city in Australia.
“This isn’t a demand problem – it’s a supply crisis driven by seller psychology,” Spring said.
Spring said that sellers’ FOBO was compounding with the supply shortage, worsening its effect on market mindsets.
“Managing this process is stressful, time-intensive and complicated if you’re not experienced in dealing with the types of market conditions,” Spring said.
“Some sellers are genuinely scared of being left homeless if they sell.”
She added that the intense growth in Brisbane has raised doubts among those who may have been considering selling and moving.
“Extraordinary value gains across Brisbane, especially in the past quarter, have owners worried about selling their homes, only to be left out of a runaway market that they cannot afford to buy back into.”
With property values climbing by 3.5 per cent according to the latest Cotality data, combined with the additional costs of buying and selling a home, Spring said it was becoming more difficult for homeowners to decide to sell.
“If you choose to sell your $2 million property today, you’d need to find an extra $70,00 in just three months to buy the same calibre of home,” Spring said.
The increased value of the home, as well as the additional costs of buying and selling, including stamp duty, agent fees, and legal expenses, have created a significant financial barrier.
Spring said the additional expenses were leaving sellers even more hesitant to return to the market.
“As a result, owners are simply electing to stay put rather than sell.”
She said that the market conditions were hitting owners in the $1-2 million range the hardest.
“We have seen listings in this crucial price band disproportionately drop in the past year because, ironically, owners are too scared to sell in today’s competitive low-interest, high-demand environment.”
She said keeping homes available within the price range is critical, as they are often considered by second or third home buyers or families looking for more space.
Additionally, Spring said that the suburbs within Brisbane’s inner ring, such as Camp Hill, Cannon Hill, Morningside and Tarragindi, recorded the lowest supply.
“It’s those addresses 5-10 kilometres from the CBD that are suffering the most.”
For agents trying to gain listings, Spring said that offering extended settlement periods could provide sellers with the security they need to bring their property to market.
“For buyers in this price range, the message is clear; when a quality property becomes available, you need to be prepared to act decisively.” Spring concluded.