Issue 22 | Thursday 4 November | The borders are opening… what does that mean for real estate?
Hi, Andrew Bell with you once again as we move into the last 8 weeks of the year.*
And aren’t things changing so quickly. It was only a couple of weeks ago and so much of Australia was in lockdowns but as the surge of vaccinations has occurred, we are now getting undertakings from the Premiers of VIC, NSW and QLD that there will be no more lockdowns ever again. It’s quite amazing how quickly we have gone from so many restrictions to almost none. Borders are starting to open both domestically and internationally and by Christmas and you get a sense that we will pretty much be functioning the same as we did pre COVID. We have been warned that COVID will be with us and that those who haven’t been vaccinated will be the ones at risk and the rest will be able to function with great freedom and safety.
So how is this going to affect the real estate market?
Well, we certainly are expecting a surge of activity here on the Gold Coast. So many people who have been wanting to buy and not quite had the same comfort levels as many other interstate buyers who have bought sight unseen or with Facetime inspections or just a video of the property than those who needed to see the properties first hand from 17 December on will be able to come here personally and inspect.
Our local Gold Coast tourism operators have confirmed that the minute the announcement was made that the borders were open to the vaccinated from 17 December, the bookings have gone through the roof. It’s amazing every year we can accommodate more people than the year before as all the new buildings built-in one year provide additional accommodation space. There is little doubt we are going to have a record number of people visiting the Gold Coast and so many of those will be the people who want to buy here on the Gold Coast. It should be an amazing period of time.
We see that the authorities are getting increasingly concerned about how long the real estate market can power ahead as it is presently. As I mentioned in the last report, APRA has brought in some regulations from 1 November which will strict the amount of money the buyers can borrow in comparison to previous levels. They also said if that doesn’t slow the market down, they are prepared to do some more tightening of lending. And of course, last week’s announcement of inflation now at 3% raised the question of the potential interest rate rises sometime later next year. Both of those measures will be used if necessary to rein the real estate market in.
But for now, it continues with amazing strength. Our auctions are setting record results. Often programs of 30-35 in-room auctions are having 100% success. Likewise with our busy on-site auctions on Saturday’s and it’s almost without exception that every property is selling. It’s the old supply and demand equation.
So I keep being asked how long can this market continue and the answer is, certainly through the balance of this year and into next year. Only the inexperienced would claim that they’ll know what will happen beyond that as there are ever-changing factors that come into play.
Beyond question, the Gold Coast property market has been reset and redefined and as the 6th largest city in Australia, we are now truly showing our huge appeal to our fellow Australian’s. We have come of age. We have built an awesome platform, the days of boom and bust are now behind us but like all real estate markets around Australia, will always be subject to the pressures that Government enforces impose upon consumer confidence about buying a new piece of real estate.
Make hay while the sun shines is certainly my recommendation. The Gold Coast is in the best position it’s ever been and one only wonders what will happen when the international borders open up and foreign investment is looking for a safe haven to secure a real estate investment.
WOW – haven’t we had some crazy weather of late. I hope wherever you are, that you and your families have been personally safe and no damage to your home. Be with you in a fortnight’s time for further market updates.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group