Issue 17 | Thursday 26 August 2021 | Appetite for Gold Coast Property Continues
Hi, Andrew Bell here and isn’t out daily weather becoming more like Spring by the day.
The national focus at present has been on the outbreak of the COVID Delta variant. We can see the incredible impacts and are getting a real understanding, particularly in NSW, of how quickly one case of the Delta variant can escalate so rapidly. The Delta strain is now turning up in other States which I guess does show why State Premiers are so definite in closing borders to try and prevent the outbreak in their state. We are certainly blessed at present here in Queensland where on most days we record zero new cases or where any cases that are identified are already in quarantine.
Everyone is anxious to understand how all of this is going to affect their livelihoods. We are seeing compounding effects with much of Sydney now in its eighth week of lockdown and with forecasts that there is probably another eight weeks or more still to go. Melbourne is in its sixth lockdown. These are our two main States and where, for example, Western Sydney accounts for around 38 percent of the national economy. People who derive their income from the health of the economy, which is most of us, are certainly worried. I see NAB has already suggested we have dipped into another recession.
It is no surprise that I am getting inundated with enquiries about what is likely to happen in the real estate market and I guess my answer is two-part. For the present, it has stimulated a new avalanche of people from all parts of NSW and Victoria who want to migrate to Queensland – either for a sense of greater health safety or because they have lost jobs or have had to close their business down and just want to start a new life, and some because of a perception that Queensland, by and large, is managing this situation pretty well and that is largely because we are not nearly as densely populated as those larger cities and with the understanding that COVID apparently isn’t as active in warmer climates. However, most definitely our more affordable real estate plays a major role. Every time there is a lockdown there is simultaneously a spike in buying activity out of those lockdown areas.
Our auction last week is just one example. It set new national, state, and indeed local records. 26 properties were submitted with a 100 per cent success rate. One auction went for 45-minutes with 144 bids and $700,000 over the reserve. Sale after sale flying past reserve prices and setting new benchmark prices in either the streets they were in or the buildings they were in, whether it was residential or commercial. This is on top of the previous month’s auctions 84 auctions that saw 93 per cent of those properties sold, including one residential property that sold for double the reserve price. Some $60+ million in sales and beyond question were significantly stimulated by the lockdowns. Whilst buyers came through real estate portals and significant enquiry off the Gold Coast Bulletin, so much of the enquiry came out of our existing database of clients who have registered with us in recent weeks and people from around Australia knowing of Ray White’s presence on the Gold Coast through our national network asking us to help them find a property. Unprecedented numbers of people reaching out weekly.
We are well versed now in operating in COVID restrictions. We have videos for every property we market, we do Facetime inspections with interested parties, we help people with finance through Loan Market which is the country’s second largest financier and owned by Ray White, and we leverage our Ray White network – the largest in the country. It is Ray White’s scale that provides us with incredible and unique tools that help us not only in the good times but most definitely in the challenging times.
In the week that Southeast Queensland was put into a sudden and unexpected lockdown, we wrote 55 sales for the week. Who would have imagined? This is again a sign of how COVID impacts the real estate market.
The answer to the question “how is the Delta outbreak affecting the real estate market”, the answer is – here on the Gold Coast and for the present, it is proving to be a huge stimulant to the marketplace. At the very time, we have the lowest level of property on the market in decades we have record demand.
Looking forward we expect those conditions to continue through September and perhaps into October. It is the spring season when so many buyers come out of winter hibernation and want to secure their new homes to be in by Christmas or for those buying their holiday properties to get their Gold Coast holiday property to use through the summer season. There could not be a better selling period for any seller with a spike in buyers and the significant undersupply of stock.
Looking further forward the market is going to heavily depend on the long-term damage that this current lockdown is having to our economy. It is likely to be the most damaging effects of this whole COVID pandemic. Way too many people are having lasting economic damage. Businesses are closing and will continue to close. People without incomes. This will see significantly more mortgagee in possessions and an increase in sellers simply having to sell their homes, their investment, or their holiday properties to cover debts and get rid of repayment commitments. History will show us that many potential sellers in the marketplace today will bury their heads in the sand and will think that this current market will just continue forever and that they have the luxury of selling whenever it suits them, but no market continues forever. Every market has a beginning and an end. There is certainly a rising concern that there are reasons to believe that what we are experiencing at present may well be the peak and that there are issues to deal with moving forward. You simply can’t get better than a 100 per cent success rate at auction.
What I am actually saying to the large number of people who have indicated that they would sell but have been putting off selling is that the adage of ‘make hay while the sun shines’ rings home now. One strong learning during my career in the industry has been it is always better to sell three months too early than one day too late. We have had an amazing run in real estate with huge growth in values and for the wise, it is time to capitalise on those gains.
We have some very special programs running through the balance of this year to ensure all our clients capture the very best of this market. If you would like more information, please do not hesitate to contact us at firstname.lastname@example.org or 1800 198 009 and we will certainly address any particular questions or issues you might have.
I also have interviewed Nerida Conisbee, the most interviewed economist in Australia on real estate, and gave her insight into the market in general at present and a separate interview addressing the prestige market, so if you could like a copy of that interview please reach out via email@example.com or 1800 198 009.
Spring is on our doorstep, and we are ready for what it brings. Wishing you all the very best wherever you may be.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group