Soaring demand for affordable residential real estate is prompting buyers to pay tens of thousands of dollars more than the advertised price on websites and has even sparked a punch-up at an auction in Sydney's Parramatta.
Turnover in the middle to lower end of the market has doubled for many real estate agencies in recent weeks, compared with last year.
Agencies previously focused on more highly priced property have expanded into the mortgage belts in Sydney and Melbourne's west to cash in on the demand, as sales in the top end slowed during the global financial crisis.
Kristy and Tim Burness have profited from the market, having sold their home at Tempe in inner Sydney last month for $565,000 before its auction. They had set a reserve of $525,000.
"We purchased the property for $474,000 and that was 3½ years ago," Mrs Burness said.
"We only had our house on the market for a couple of weeks."
Ray White chairman Brian White said about 20 per cent of its branches had reported one of their best years.
"Campbelltown (in Sydney's southwest) has had an exceptional year," he said.
Referring to branches in the more moderately priced locations, he added: "It is unusual these offices are now running tight on stock.
"The stock shortages are as acute as any of us can remember. It has changed to a vendors' market, which was unthinkable six months ago."
He said one auction at Parramatta two weeks ago had 19 bidders, and a fight erupted between buyers for a property worth about $550,000.
"I have never had that before," he said.
Salvi Galati, state chief executive for Raine & Horne Victoria, said Melbourne's western suburbs were running red-hot.
But he said many of the offers being made before auction were collapsing because the banks would not finance a purchase over the property's valuation.
