13 Jun Buying “Subject to Sale” in a Rental Crisis
The property market has been on a record-breaking tangent over the last couple of years. Capital cities in particular have surged from strength to strength when it comes to property valuations. Buyers have been lining up and paying top dollar for homes. In fact, it’s been a pretty tricky time for buyers, as every property that hits the market has been hotly contended for.
The Queensland Rental Crisis
It’s not just homes coming onto the market for sale that are hotly contested. Rental properties are exceptionally scarce, prompting the very real situation of a rental crisis in Brisbane and around the state, mirroring that around Australia.
In Brisbane the vacancy rate for rentals was 0.7%, which is a whole 1.2% behind Melbourne. More demand means higher prices, so rents have been increasing steadily due to the shortage of stock on the market, to the point where we now have historic highs in Brisbane. Renters face the dual problem of not being able to find a home, and then not being able to afford it when they do find one.
Over the last five years, rental prices in Brisbane have increased by 20.1%, on the Gold Coast they’ve gone up nearly 40% and in Ipswich they’ve gone up nearly 22%. These are difficult times for renters, many of whom end up paying more than they can afford for their rentals.
It’s no surprise then that this has impacted sellers too. People who are selling their homes don’t want to be stuck in a situation where they sell, then have to find a rental in the interim. Chances are, it’ll be really difficult to find a rental.
So what are these vendors doing? They are still looking for homes, but they are stipulating that any offer they make is ‘Subject to Sale’ of their own home.
What Does Subject to Sale Mean?
Subject to sale is when a real estate buyer makes an offer on a home, with the condition attached that their own property needs to be sold first. More buyers are doing this in Brisbane and around Australia today, in roder to avoid having to find a rental property to live in while they find a new home to purchase.
Unfortunately, if a seller is in a hurry to move onto their next chapter, they will likely overlook any subject to sale offer from a buyer. If someone lese offers the same amount but there isn’t the subject to sale condition attached, the vendor is obviously more likely to go with that offer.
The “Off Market” Solution
One way for buyers to overcome the disadvantages of a subject to sale situation is to look for off-market properties. This is a home that is for sale but hasn’t been advertised on any of the main real estate portals like realestate.com.au or domain.com.au. You also won’t find it in the newspaper.
The sellers of off-market properties often isn’t in a rush and doesn’t feel the pressure to sell right away that the seller of a listed property does. So if a buyer comes to them with a subject to sale offer, they’re likely to give it serious consideration. This takes the pressure off the buyer, who can then find the right buyer for their own home and not have to enter into the slightly crazy Queensland rental market.
Here at The Henry Wong Team®, we pride ourselves on the number of off-market properties we sell. We have a huge database of buyers who we notify of our off-market listings, and this often results in a sale before we need to advertise the home. We’d urge buyers who are looking for a home to get in touch for our latest off-market properties.