Why Sellers Are Acting Now – Key Market Trends

Why Sellers Are Acting Now – Key Market Trends

Hi, Andrew Bell here with you as we move well into February. I have three quick topics to cover today.

State of the Gold Coast Real Estate Market

The Gold Coast real estate market is in a different position, but it remains healthy. The key fundamentals of real estate—supply and demand, interest rates, unemployment, and consumer confidence—continue to shape market conditions.

Supply & Demand

The cost of building new properties has risen so dramatically that we are not constructing anywhere near the volume needed. As a result, the underlying trend is a property shortage across Australia, though its severity varies from market to market.

With the Gold Coast’s population growing by approximately 15,000 people per year, rising construction costs are pricing developers out of the market. Many are even going into administration at increasing rates, particularly those working on affordable housing projects. As a result, supply remains tight and is expected to stay that way for years to come. Meanwhile, as I touched on earlier, demand continues to grow through migration, making this a strong and stable fundamental.

Interest Rates

The primary driver of interest rates is inflation. While inflation has been trending downward, we now need to monitor the global tariff battles that have already begun. Current forecasts suggest these trade conflicts could negatively impact inflation in Australia.

If interest rates do drop this year, the cuts will be minimal, meaning they will only have a limited effect on the property market.

Unemployment

At first glance, unemployment doesn’t appear to be an issue. However, it’s a key statistic to monitor, as it can shift rapidly. Unemployment and interest rates have a close relationship—when unemployment rises, interest rates tend to fall; conversely, when employment is high, it fuels inflation, which pushes interest rates up.

While we don’t want rising unemployment, it is a crucial factor in creating downward pressure on interest rates. The Reserve Bank is unlikely to make any interest rate decisions until the March quarter CPI figures are released in May. This timing aligns well with the Federal Budget announcement, which the Reserve Bank will assess for any potential impact on inflation.

Consumer Confidence

Consumer confidence is currently stable, but expect it to take a hit once the Federal Election campaign begins. As both political sides ramp up their fear-mongering and polls increasingly suggest the possibility of a hung parliament or minority government, confidence is unlikely to improve.

Auction Market Insights

A key statistic from Ray White—the largest real estate company in Australia—shows that 1,900 auctions have been conducted since January 1st. This represents a 28% increase compared to the same period last year, indicating that many property owners are choosing to sell now.

A particularly positive sign is that 73% of these properties sold on auction day, with post-auction sales pushing the success rate into the 90% range. This reinforces the strength of auction campaigns, which continue to outperform private treaty sales.

The Rise of Real Estate Scams

Another important issue I want to highlight is the increasing number of scams infiltrating the real estate sector. According to the ACCC’s Scamwatch, Australians lost over $380 million to scammers last year. Buyers, sellers, and renters are all potential targets.

One of the biggest threats is payment redirection fraud, where scammers impersonate real estate agents to deceive clients into transferring funds to fraudulent accounts. They create email addresses that closely resemble legitimate agents and send fake banking details, tricking unsuspecting clients into depositing money into the scammer’s account.

This scam is also prevalent in the rental market, where fraudsters pose as real estate offices to redirect rental payments. Additionally, scammers impersonate buyers or sellers, providing false bank details to real estate agencies in an attempt to divert deposit funds. Solicitors face similar threats, with scammers pretending to be legal firms to intercept payments.

Another common scam involves fake landlords listing rental properties online, offering tenants a property without reference checks in exchange for a deposit. When the tenant arrives to collect the keys, they find out there is no property, no owner, and no refund.

Protecting Yourself Against Scams

To safeguard against these scams:

• Always work with a reputable real estate agency.
• Communicate via both email and phone to verify details.
• Ensure you are speaking directly with the agent handling your transaction.
• If you receive updated bank details via email, always call your agent to confirm them before making any payments.

While banks are continually improving their fraud prevention measures, scammers are constantly adapting. Unfortunately, this is the reality of today’s digital world.

Fortunately, we have not experienced any issues to date, and we remain highly vigilant in managing our clients’ funds with the utmost care.

I look forward to being back with you in a fortnight.

Warm Regards,

Andrew Bell, OAM
Chairman
The Ray White Surfers Paradise Group

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