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Inca Mortgage Solutions founder and finance broker Amy Ferguson said first home buyers and upgraders were having a hard time navigating the “crazy” Perth market as property prices rose steeply.
Perth has experienced a major surge in dwelling values in recent years, with recently released CoreLogic data showing that property prices rose a massive 22.6% in the year to 31 October 2024.
The price rise since the beginning of the pandemic in March 2020 has been a whopping 76%, according to CoreLogic, with Perth properties now boasting a median value of $804,621.
The rapid increases in property prices, compounded by low stock on market, mean that buyers are having difficulty pinning down a property for purchase or knowing what they may need to pay.
“Properties are going for significantly above any advertised price range, so it’s kind of hard for them [buyers] in terms of their expectations,” Ferguson (pictured above) said.
“If they see something listed saying offers from $699K … then that could end up selling for $770K or $780K – so it’s not even close to the $700 mark.”
Real estate agents, who are fielding multiple offers from pools of sometimes five or 10 interested buyers, are often not putting prices on properties and are instead letting the market decide.
Ferguson said it was often the best financial offer that would win the property.
“I think it’s hard to buy because the price point has moved up so quickly,” she said. “It makes it tricky for anyone looking to buy in our market at the moment.”
The market is putting pressure on brokers to offer service at speeds they did not need to previously.
“The speed is so fast,” Ferguson said. “For example, I’ve had new clients come to me saying, ‘Oh, we’re going to see a house tomorrow’. Now, you have to be really quick with them, because if they’re seeing the house tomorrow, that means they’ve only got a day or two to place that offer if they like it.”
“I think because the market is moving very quickly in terms of selling days – most properties only open once or twice – it just means as a broker, you really need to be on top of things.”
Ferguson brought on a virtual assistant earlier in the year to augment her single broker business, so she can focus on providing the level of service for her clients in the boom market.
Inca Mortgage Solutions has also implemented a $220 onboarding fee for clients, which Ferguson said was about gaining commitment from a client and protecting her time as a broker.
“It's not about the money, it's about the commitment from the client,” she said.
“I am making sure my clients are genuinely interested in working with me. I don't find I have time to work with everyone; although most brokers don't charge a fee for service, I just think people respect your time a little bit more having made that commitment.”
Ferguson said she introduced and charged the client commitment fee after a conversation with the client where she checked they were ready to go to the stage of a full capacity assessment for a loan.
Ferguson said that, with interest rates slated to start falling in the first half of 2025, she did not expect to see much of a slowdown in the Perth market in the coming calendar year.
“I think when rates go down a little bit, just that confidence it gives people, as well as a freeing up a little bit of borrowing capacity, I think that would just continue to drive the strong growth that Perth has seen. I can’t see our current trajectory slowing down any time soon.”
Brokers will need to continue to prepare their clients for the market they are heading into when they are getting ready to apply for a loan, as Ferguson said she has needed to throughout 2024.
“We are thoroughly pre-qualifying them so that they’re well informed about their budget. The second part is sitting down with them and having a conversation about how the market is operating at the moment, and how quickly properties are selling.”
Ferguson said she advised clients to put in their best offer for a property every time first time, because real estate agents were not returning to clients for a second round of offers.
Clients are also being prepared by Ferguson for the paperwork they will be given by a real estate agent when they want to place an offer, and what answers they will require on their pre-offer form.
“It’s just basically getting them ready to be confident in what they need to do so they are well prepared,” she said. “That way the agent can see that they know what they’re doing and that they’re pretty qualified by how they conduct themselves in the offer process.”
