Properties all across Brisbane are being gobbled up “site-unseen” by Sydney investors. Many of the transactions are taking place without inspections and purely based on online photos.
Brisbane real estate agents have reported that this investment activity has increased housing prices in the suburban areas, where previously the market was more affordable.
The suburbs targeted by the Sydney investors include Inala, Woodridge, Eagleby, Forest Lake and Slacks Creek, located 25 minutes south of city. The neighborhoods have historically affordable property values partly due to the area’s high crime rate. Queensland Police Service’s ranked each of these suburbs near the top of their list for the number of reports for unlawful entry with intent in 2014-2015.
Throughout the area, real estate agents are reporting an increasing number of investors buying-blind. “Out of every 10 sales, five will be investors,” said White Knights Realty Logan agent Kym Whalan,“and two will not have viewed the home, and that is a modest estimate.”
The agents can only speculate over the investors’ motives or knowledge of the properties. Kym said, “Often it seems as the investors have no idea about the area’s reputation. Or maybe they are overlooking them because of the good house prices.”
Locals are concerned why housing prices are on the rise following increased investment activity in Woodridge, a suburb of Logan. Kym commented, “I think locals might be wondering to themselves why it is becoming more expensive all of a sudden.”
Even though Sydney investors are not regularly viewing the properties, important information is still available to them. Lesley Waters, office manager at Professionals Beenleigh, said “I always make sure to explain the area to buyers, and make sure they are not under the wrong impression.”
She admits, though, that the practice of blind-buying was fairly common for Sydney investors buying property in Eagleby.
“We are seeing about 70 per cent of Sydney investors buying without seeing the homes,” she said. “But investors are drawn to being close to the highway, the location between Brisbane and the Gold Coast and also good rental returns.”
Inevitably conflict will arise between the agents and investors when the real condition of certain properties become evident. Photographs do not always tell the complete story about a property.
Daphne Orley, agent for Coulson Real Estate Inala, had to resolve issues with an investor who discovered problems with the property after the sale. “I dropped $7500 off of a house price that was bought from an investor who hadn’t seen the home because of cracks that did not show up clearly in photos,” Orley said.
Orley reported that she continues to sell to blind-buyers, her last two properties in the Acacia Ridge suburb sold without inspection.
Investors usually follow up their blind purchases with inspections said LJ Hooker Logan City manager Tony Hall. “Sometimes you will have the buyers get someone they know in the area,” he said, “like family or friends to view the property for them, and they will go off of that advice.”
Hall continued, “I have had homes crash after a follow up inspection, just as I have had homes go through after a follow up inspection.”
Because of the troubling issues that may arise, not all agents will sell to blind-buyers. Some agents, like New Image Real Estate Marsden agent Christine Carroll are upfront with potential clients:
“I do not sell without a visual inspection. In my view it is the ethical thing to do, because it puts the ball into the buyers court, and at the end of the day I want them to know what they are buying and it is in the best interests of the buyers,” Ms Carroll said.