Sight unseen purchases rise as FOMO takes hold

Buying a property without looking at it has traditionally been almost unheard of in Australia, but an increasing proportion of buyers are willing to take the risk rather than miss out on their dream home.

A survey by the Real Estate Buyer’s Agents Association and Property Talk Australia showed 30 per cent of respondents said they would take the risk to buy a house without physically inspecting it.

REBAA president Cate Bakos said the heated competition in many markets across Australia had fuelled the fear of missing out, with buyers replacing an inspection with technological advancements.

“It’s alarming to think that people are basing the biggest financial investment decision they’re likely to make in a lifetime on a video and a few photographs that may or may not be showcasing the property’s flaws,” Ms Bakos said.

“We are concerned at this level of apathy and warn buyers that while new technologies have made it easier for home buyers and investors to assess property, it’s risky business to invest based on technology alone.”

Ms Bakos said many of the free valuation and property research tools available online were highly flawed and did not take into consideration renovation works, subdivided sites, orientation or other important aspects.

Issues such as mould and damp, unwelcome odours, noisy neighbours and road noise can easily be overlooked by free apps, she said.

“These free valuation tools are merely built with algorithms, and as clever as they are, they can’t offer the same insights that a genuine valuation does,” Ms Bakos said.

“It might look good in the video and photographs but there may be a number of serious flaws that aren’t showcased by the selling agency.

“These can include light, aspect, structural and building defects, room size, low ceilings and doorways and low-quality renovations that photograph well.”

The survey also showed investor activity was on the cusp of a major upswing, with 43 per cent of those that said they were looking at buying this year would be doing so as an investment.

Of those buyers, 49 per cent said they were looking to invest in a detached house, with 4 per cent looking to buy apartments and 7 per cent keen to purchase a unit.

Nearly a quarter (24 per cent) of the respondents said they were looking for a property to renovate and hold, while 23 per cent of buyers said they were considering an interstate location for their next purchase.

“Interestingly, investors and aspiring investors, when asked, expressed an interest in regional investing for 2021,” Ms Bakos said.

“Some 20 per cent are circling on a regional strategy, while over a quarter are focusing on both metro and regional.

“The decreased interest rates, combined with the strong reported growth of our regional cities, is a key contributor to the strong interest associated with regional investing.

“Now, more than ever, investors can circle in on a cash flow neutral, and in some cases positive, outcome when targeting specific regions.”

Less than a quarter of those looking to buy, however, actually can, the survey said, with 78 per cent not securing finance despite having strong buying intentions.