Issue 25 | December 5th | A Strong Finish to 2019
Hi, Andrew Bell with you and here we are December. I won’t talk about how fast the year has passed but I will say that it has been an amazing year. There were clearly two distinctly different halves. The first six months was dominated by the effects of the APRA financing regulations that made it almost impossible to get a loan, and the fear around a change of our Federal Government and the impacts of higher capital gains tax and the elimination of negative gearing. The market was grinding to a halt and there were very few people with any interest in buying real estate.
Moving into the second half of the year and some of the fundamentals that drive real estate really kicked into gear fast. Population growth continued to build demand and created some pent-up demand. Interest rates fell again to new record lows with talk of even more falls. Suddenly, real estate was on the agenda and it clearly became a preferred option for the placement of peoples hard earned money over a volatile stock market or in a bank with negligible interest being paid. Growing consumer confidence clicked in and now the fear of missing out is really driving the market.
Right now, is an incredibly unique combination of one of the lowest supplies of properties on the market that I have ever seen in 40+ years, yet with strong demand from buyers. It has created a situation where properties are being sold very quickly unless they are crazily overpriced. A typical example is a property we listed last week in a central market of the Gold Coast, where it was listed on Thursday and sold on Sunday at an outstanding price. No wonder we are starting to see reports coming in about price growth since the middle of the year, but it is so tricky to get a proper read on how this price growth is occurring. It is not very high in some areas and extremely high in others. In some places, the strongest price growth has been in apartments and others in housing. No question, it is across the board but it can range anywhere from 5 percent growth in some properties to 20+ percent in others.
What is clear is that there are two stories emerging. One is for buyers who are increasingly frustrated by a negligible choice of properties, as well as the reality that they must move quickly with their offers which have to be strong in order to secure the properties. Many buyers are missing out because they do not have unconditional finance in place and are therefore less attractive buyers. Finance is obtainable, but it has to be done in advance of buying and should always be done through a broker.
The second story is for our sellers. Many of them are thrilled to see their properties sold in four or five days, at what looks like good prices, but they don’t realize that they could be leaving a lot of money behind. In markets, such as this, open and fair competition is key to realizing a seller’s optimum results in their sale. Buyers truly do not know what they are prepared to pay until they are in a competitive situation, and this is why auction at this point in time is the most spectacular way of selling property. For the sake of waiting a few more weeks, there could easily be another 3 – 5 percent, and sometimes considerably more, by going through the auction process. It is no more work for the sellers, just another couple of weeks in the sale process. In this sort of market, the wisest sellers understand that the method of sale has such a bearing on the price you achieve, and that auction right throughout the country is producing the best outcomes.
It is great timing here on the Gold Coast with our upcoming The Event 2020 marketing program that kicks off in a couple of weeks. It is an iconic event in the Australian national real estate calendar. It has grown in stature year after year and it is where you see the most amazing auction environment that produces fantastic results for both buyers and sellers. The forward predictions of over a million people visiting the Gold Coast over Christmas / New Year means there could not be a better time to be offering properties to this huge buying market at present.
For more information on our program for The Event 2020 contact our hotline 1800 198 009 or email firstname.lastname@example.org. We can only take limited numbers so for anyone considering selling, please reach out to us immediately so we can give you more information and make sure you are part of the program.
I will be with you once more for a final news report for 2019. In the meantime, please be safe on the roads and let’s really look after each other.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group