Issue 12 | May 7th, 2020 | Gold Coast Real Estate Activity
Hi, Andrew Bell here with you.
The first full calendar month post the commencement of the restrictions around COVID-19 has now passed and it gives us the ability to do a snapshot comparison to each of those months in the first quarter of this year.
Looking at this in two major areas of Gold Coast real estate activity.
The first, residential sales and beyond question we seem to be in a ‘void’ period of time where I believe people have been terribly distracted by all the ramifications of restrictions and are trying to assess how everything COVID-19 is impacting on them. As such, we are seeing very little new property coming onto the market for sale and although buyer enquiry halved, the intent of those who did enquire was very strong. These were people who had recently sold their properties or who had moved from interstate and were very committed to buying properties, and so our residential month saw us sell more properties than we listed. It meant levels of available properties for sale was less at the end of March 2020 than it was at the beginning. There was no evidence of any impact on real estate pricing throughout the month and there were some very notable sales, although sales volumes were down around one third.
In the commercial sales arena the situation was similar and in fact it was quite surprising to see just how many investors surfaced looking for quality tenants who were not affected by COVID-19, and there are many, providing properties with security of income and good yields. Overall, the sales activity again was down around 40% and no evidence of any price adjustments.
The second area of real estate activity is our property management. In the residential property management space we did receive a significant amount of requests for rental assistance, but through the month we were able to navigate through that and sort out those with genuine cases of hardship and work with both the tenants and the landlords. This saw us end up with only around 7% of properties that needed some rental assistance. What has been noticeable is in the leasing area where a large number of properties came out of AirBNB and general holiday letting pools with owners knowing that they would not be able to lease their properties with travel restrictions and chose to go into permanent tenancies. This has seen a jump in vacancies rising from around 1,200 properties five weeks ago to around 3,500 at the end of April 2020. Yet in the last two weeks, there has been an enormous jump in rental enquiries and surprisingly this increase has not come from Gold Coast tenants moving from one property to another, but a significant influx of interstate people who have decided as a result of changes to their personal circumstances through COVID-19 now is the time to make their move to the Gold Coast. We have been leasing an extraordinary number to people from Melbourne in particular, followed by Sydney, and as such, our leasing for the months was almost identical to the month of March 2020.
Commercial managements have of course been hit so much harder with many businesses affected by forced closures of their businesses. Around 40% of tenants have sought rental relief and likewise we are wading through that to see how we can assist all those genuinely affected. It is very stressful for both landlords and tenants and without clear direction from the Government as yet, it has made it just that much harder, but we have been wading through that progressively. Interestingly, there has been quite a strong surge over the past two weeks by people seeking to rent. We have been very surprised to see the number of people seeking to open up new restaurants – believe it or not – whilst others are just reshaping the size of the premises they are operating from. Some businesses are looking to downsize whilst many others who are beneficiaries of COVID-19 are looking to increase the size of their premises.
A lot of activity but overall, there is an enormous amount of work to still get through to assist in this commercial space, and of course there is a long way to go yet.
With careful strategy and a lot of understanding and sensible negotiations we entered April 2020 in a much better position than we might have otherwise imagined. As I have said a couple of times, we know there is a long way to go but with over 45-years’ experience behind us through so many tricky economic situations over those decades, we have been able to bring a lot of experience to the fore and have put great strategies in place which fortunately are yielding good results for our clients.
I am sure the situation will continue to evolve and as I have said a number of times, there is a long way to go, but we will keep you up to date with developments because I know how keen everyone is to keep a finger on the pulse and know all the latest factors that relate to real estate holdings.
We have weathered the events better than most, but let’s keep supporting each other as the economic impacts will need all of us to step up. Let’s do it as Australian’s always do where we come together through droughts, fires, floods, and now pandemics.
Best Wishes to all
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group