Prestige property sellers in Brisbane risk losses by overestimating demand

In Brisbane’s high-end real estate market, sellers are finding themselves at a disadvantage by overestimating buyer demand, according to insights from Zoran Solano, a leading buyers’ agent at Hot Property Buyers Agency. This miscalculation is resulting in sellers rejecting strong auction offers, only to sell their properties later for less than the initial bids. Meanwhile, the market for properties priced between $800,000 and $2 million is experiencing fierce competition and rapid price increases.

“We have been to quite a few auctions lately, with property priced north of $3 million, which not only start with a vendor bid – which doesn’t show great confidence in the quality of the buyers – but then get passed in because the bidding gets nowhere near the reserve and the sellers aren’t prepared to budge,” Mr Solano explained. The tendency of sellers to hold out for higher prices, despite a lack of demand at the top end of the market, is proving to be a costly strategy.

Mr Solano elaborated on the disparity in the market dynamics, noting that the top end, while still experiencing price growth, lacks the velocity and demand seen in more affordable segments. “Of course, with prestige, you never have the same volume of potential buyers in that upper price bracket,” he said. “But it also seems that sellers are shooting for the stars, when the top of the market doesn’t have the same momentum under way.”

This overestimation of demand is leading to properties lingering on the market longer than anticipated. “Rather than accepting a price close to their reserve, which often has a significant profit already baked in, they are stubbornly holding their ground and often paying the literal price for it when the highest offer they receive post-auction is well below what they could have achieved under the hammer,” Mr Solano added.

In contrast, the $800,000 to $1.2 million price bracket is currently leading the pack in Brisbane, with both property buyers and investors expressing frustration over their inability to secure purchases. “We’ve helped quite a few buyers who had been searching for months – sometimes up to six months – and were always missing out, because of people offering crazy prices or removing the finance clause to secure the property,” Mr Solano noted.

The demand is not limited to this price range alone. Properties priced between $1.5 million and $2 million are also seeing strong interest, particularly from upgraders. “There is also very strong demand from upgraders for properties between $1.5 million and $2 million, with some having left it too late to upsize,” Mr Solano said. He explained that many buyers find themselves in a situation where, by the time they manage to upgrade to their dream home, their children may be finishing high school, leaving them with a house that is too large for their needs.

For those navigating the prestige market, Mr Solano advised a more cautious approach, recognising that the market is not as heated as lower-priced segments. “This means they have more time to find their next home and don’t need to be throwing the kitchen sink at a property – especially at auction,” he said. He emphasised the importance of patience and strategic decision-making, warning against the risks of overpaying. “While it is always risky to let a property pass in at auction, if it is seriously overpriced, that is far better than buying it an inflated price – sometimes several hundred thousand dollars above market value.”

The insights from Mr Solano highlight the current challenges and opportunities within Brisbane’s real estate market. Sellers in the prestige segment need to recalibrate their expectations and strategies to align with the realities of buyer demand, while buyers in the more competitive price ranges must navigate a landscape marked by rapid price escalation and high competition.