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Andrew Bell’s Market Wrap: 50+ Contracts in a Fortnight

ByAndrew Bell

Issue 22 | October 24th | 50+ Contracts in a Fortnight

Hi, Andrew Bell here and coming to you with just on eight weeks to go until Christmas. As I mentioned before, these last weeks of the year just disappear.

It has certainly been brisk in the real estate market. Over the past two weeks, we have recorded well in excess of fifty contracts across all types of real estate. There is a real push for so many people to buy a property and get possession prior to Christmas and it is certainly driving the marketplace very strongly at present.

Today, I am coming to you from 17 Cheval Court, Benowa Waters. It is just one of those perfect homes for the huge number of people migrating here from the southern states and looking for a centrally located waterfront property. It is a single level coastal-inspired residence on a massive 1,027 square meter block with a big 31-meter frontage to water. I am sure you will be as impressed as me by this property. It goes to auction on the 24th of November 2019 at 10:30am and so you might like to come along to one of the open home inspections or you can contact our marketing agent, Carita Lanham on 0413 130 330  or c.lanham@rwsp.net. It really is a cleverly designed home with all the features that make it a home you will just love living in.

I have been staggered to see how quickly the shift in the market has created a significant housing shortage. We had some good building numbers pumping through in 2017 but with the tightening of finance and all the regulations around lending around the Royal Commission into banking in 2018, there was a significant decline in the volume of new homes being built. That is really starting to bite home now in the rental market. With investors finding it hard to get finance, we see a significant decline in the number of investors in the marketplace. I sure hope that turns around very quickly.

I have mentioned before that a 3 percent vacancy is the benchmark for residential rental properties. A vacancy rate beyond 3 percent means there is an oversupply of properties and it tends to see rents fall in value. Below 3 percent means there is a shortage of rental properties and rents are likely to rise. Never in my 40 odd year career have I seen a rate of 0.81 percent, and that is what our rent roll is currently recording. Yes, I accept that we are probably the best-run property management business in Queensland, but, irrespective of that, this is alarming as it is showing the incredible shortage of rental accommodation there is in the marketplace at present, and sadly, it inevitably means rents are going to rise sharply.

Fortunately, there are signs over the past couple of weeks that investors are coming back to the rental market. Finance is getting easier to obtain and it makes sense in any event because you get next to nothing for having your money in the bank and the stock market is as volatile as any investor has seen. I sure hope that these investors do come back in numbers because clearly no Government in Australia is supplying sufficient public housing and there is a huge dependence on private investors to provide rental properties for the ever-increasing numbers of Australians who need it.

Auctions are still producing the best outcomes in the market at present. They are providing quicker sales for sellers; with days on the market generally under 30 days as opposed to a private treaty that averages much higher, and some fantastic sales results are occurring through competitive bidding. For buyers, there is nothing better than having the hammer come down on their purchase and they know they are not caught up in any further frustrations in the buying process.

Very busy times at present and we are of course now taking bookings for those who want to be part of Australia’s biggest marketing program for the year, namely The Event 2020. A million or so people will flock to the Gold Coast over the Christmas/January holiday period, swelling the number of buyers in the marketplace. We are certainly expecting a fabulous summer and so if you want more information about The Event, please reach out to us on our hotline 1800 198 009 or info@rwsp.net

That is all for this fortnight. I trust you are in great space and wishing you all the very best for the fortnight ahead.

Kind regards,

Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group

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