Frustrated home buyers leave the market unable to make a winning bid

Defeated house-hunters across the country are giving up on buying property as skyrocketing house prices and intense competition continually knock them out of the market.

In what’s being dubbed “boom fatigue” by industry experts, some buyers  — particularly those with tight budgets — are putting their plans on hold and waiting to see whether prices will fall before trying their luck again.

Melbourne-based mortgage broker Chris Foster-Ramsay said between 65 per cent and 70 per cent of his approved customers were changing plans after trying and failing at several auctions.

“The majority are saying the market is going bananas and we’re sick of getting blown out of the water,” Mr Foster-Ramsay said. 

“It’s the emotional effect that it has when you find a place and are doing all the right things; putting in an offer at the top of the asking price range plus a percentage on top of that — and you’re just getting swiped, just getting knocked out,” he said. 

Mr Foster-Ramsay said boom fatigue had particularly affected millennials looking to buy in Melbourne’s outer-eastern Yarra Ranges and Warrandyte. 

“People want to buy in the area they grew up in, where they have always wanted to buy and are now finding that they can’t afford it,” he said.

Melbourne’s property price rises have been evident at auctions, with Domain data revealing median house prices jumped by a massive 17.9 per cent over the year to March, recording a $1.15 million median. 

This was the highest monthly auction price on record, the data showed.

It’s made it extremely tough for those with tight budgets looking to get into the market for the first time.

Associate director with mortgage broking firm ProSolution Private Clients, Jodi McKeown, said first-home buyers were feeling the frustration of price rises, with many changing their plans to buy.

“First-home buyers that have been to several auctions, and they’re continuously going over the 10 per cent extra they were expecting to pay — they are just walking away,” Ms McKeown said. “Others, if they’ve got capacity, they’re paying a bit extra to buy.”

Like Melbourne, the median price for a house sold at auction in Sydney skyrocketed over the year to March, by 16.9 per cent to $1,755,000.

Michelle May, principal of Michelle May Buyers Agents, said frustrated buyers in the harbour city were finding the market was galloping away from them and were now looking for extra help.

“When people reach out to a buyer’s agent it’s usually in the hope we can help all that pain they have been feeling go away,” Ms May said.

While people were missing out on buying properties, a lot were not being realistic about what they could afford to buy and where, she said.

“We have to tell them that what you are looking for in this market is just not possible,” Ms May said. “They need to adjust their criteria or leave the market.”

Buyers needed to reassess the suburb, property type and price they could afford, she said.

Though she had heard about people walking away, she warned against it, instead encouraging buyers to persevere to get into the market.

“If you’re thinking things are going to change anytime soon, that’s super risky,” Ms May said.

While prices have been rising in Sydney and Melbourne, Brisbane’s market has also been booming.

With fewer homes on the market, competition at auctions was growing.

Property Pursuit Buyers Agents director Meighan Wells said about 30 per cent of her clients had been feeling the frustration of missing out at auctions.

“The supply side has been very tight so buyers who have missed out because prices are rising so much are very frustrated,” Ms Wells said. “We’re not normally having this level of frustration because usually they don’t miss out on many houses.”

Like Ms May, Ms Wells encouraged buyers to rethink what they could afford to buy in the rising market in Brisbane.

“It’s the three Ps — position, price and property — so people need to think about where and what they can afford to buy,” she said.