Virtual inspections soar as more homebuyers look interstate
Investors are increasingly turning their attention interstate and virtual property inspections are booming as a result.
Virtual property inspections in some states have become so popular they now make up for 43 per cent inspections in certain cities.
New data from August revealed Australian investors and homeowners keen to snag a bargain property amid the current market downturn are looking interstate more than ever before.
The Sight Unseen report, from virtual property inspection platform Little Hinges, found that 43 per cent of all inspections completed in the Gold Coast have come from buyers outside of Queensland, with 9 per cent coming from overseas buyers.
The same report found that one in three buyers eyeing off property in Queensland had come from interstate. Across Brisbane and the Sunshine Coast, an average of 33 per cent of buyers were inspecting from interstate, with much of the interest coming from Sydney and Melbourne.
Little Hinges chief executive Josh Callaghan said his company analysed 300,000 virtual inspections for its latest report.
“The percentage of interstate inspections has remained consistent since January, showing that the trend of buyers shopping outside their home state is here to stay,” he said.
“Agents who are able to tap into the sight unseen market will be able to leverage the influx of Sydney and Melbourne buyers to achieve much higher price points.”
Agents in New South Wales and Victoria say the sight unseen market usually draws a particular buyer and it often isn’t the kind looking for an owner-occupied property.
“We tend to find that mostly investors are comfortable buying sight unseen,” Frank Valentic, Director of Advantage Property Consulting in Melbourne, said.
“If it’s someone who is going to be living in the property, nearly 100 per cent of the time they won’t buy sight unseen, they want to come and do through a walkthrough physically and form that emotional attachment.”
Investors most active
Mr Valentic said over the past two years he’d seen an increasing interest from Sydneysiders who were fed up with being priced out of the market and wanted something with more “bang for buck”.
“I’ve been doing this for 22 years in Melbourne and we’ve always had the major influx from Sydney and that’s because of the more affordable nature.
“Most of the interstate buyers generally are investors,” he said.
“We tend to find when they’re coming from Sydney that they really want a house with a backyard.
“In Sydney, similar prices are generally 20 per cent to 30 per cent higher, so they can’t afford some of the houses they can afford in Melbourne.”
Given the pricing difference of Sydney and Melbourne markets, Mr Valentic said he noticed Sydneysiders were often more flexible with their budget.
“I think they tend to find they’re getting such better value for money.
“The lifestyle in Sydney, the cost a meal at a restaurant and a drink in the bar is about 20 to 30 per cent higher as well, so when buyers come here they tend to push the boundaries and increase their budget knowing they’ll save on the cost of living,” he said.
Mr Valentic said the locations many buyers sought changed with age.
“Most of my retirees want to go up to Queensland where the weather is warmer and where they can walk around in shorts all year long,” he said.
In Australia’s largest cities, Sydney and Melbourne, Little Hinges found virtual inspections conducted by interstate prospective buyers to be 13.9 per cent and 15.4 per cent, respectively.
“A third of buyers may have gone to Queensland and that’s mostly because they’ve come out of areas like Byron, where we’ve had a great capital growth and now they’re just moving north,” he said.
“They’re basically releasing cash - they might sell for $2.5 million in Lennox Head and then buy something for $1.3 million or $1.4 million in Queensland.
“What they’re doing is just basically releasing equity out of their homes.”
The local area has long been popular to buyers from all over the country but over the past two years it was those from the nation’s largest city who had been most active, Mr Walter said.
“I would say that in the last two years, the major buyers have been people out of the metro cities like Sydney or Melbourne, in particular, Sydney’s Northern Beaches,” he said.
“The running joke was that Sydney’s eastern suburbs have moved to the northern beaches and the Northern Beaches people are moving up here to get away from people from the eastern suburbs.”
The shift from the metros to northern NSW has brought with it some positive change, Mr Walters said.
“The buyers have demanded more out of the cafes and hospitality, so now all the restaurants are getting better, the coffee we’re getting is better and there’s more builders around with all of the renovations happening,” he said.
Mr Walters said the new crowd had begun to pump money into the local economy and forced a few changes upon local business.
“It’s interesting because previously, after two or three o'clock in the afternoon, you couldn't get a coffee anywhere, you know, but now all of the cafes have started opening a little later,” he said.
“I would just say that all of the comforts get a lot better because people from Sydney and Melbourne, they just demand a little bit more.”