Issue 8 | April 3rd, 2020 | A Message form Andrew Bell
Hi, Andrew Bell here with you. Based on the huge number of people reaching out for more information about the real estate market, I will for the next month or so provide you with a weekly update about the market, but, more importantly, will share with you my learnings over eight significant shocks to our economy over the past 40 years that have had an effect on the real estate market and what the best strategies are.
We will revert back to our regular fortnightly eNewsletters as we pass through this immediate period of time.
Beyond question last week was a week full of fear. The news around the acceleration in new cases of COVID-19 started to get the message home that this was something that Australia could not skirt around believing we are the lucky country or with our ‘she’ll be right mate’ attitude. Fear and, to a degree, panic, was incredibly apparent.
This week has been a completely different mood. The amazing JobKeeper announcement seemed to have put a degree of comfort in people’s minds that not only were significantly more jobs now safe, but that the perceived damage that would have occurred by continual mass redundancies will mean that whilst there will clearly still be significant damage to the economy, it won’t be nearly as bad as it could have been.
That week of fear saw an immediate effect in the market with fewer properties listed for sale and fewer buyers coming to the market. An interesting perspective is that the Ray White Group in March 2020 transacted over $4.4 billion in real estate sales, and in that same month recorded 15% more sales nationally than March 2019. Those are massive numbers.
Some people also believed that the Government shut down auctions. This is not true. They banned public in-room auctions and on-site auctions, but we have all quickly adapted to private auctions. Last Saturday, Ray White sold 229 properties under the hammer in private auctions and as we represent 25% of all the auctions in the country, you can estimate that there were around 1,000 sales under the hammer across the industry on one day. This reminds us that there are still buyers out there wanting to buy and that for sellers who want to sell, we can facilitate that for our clients.
At present, there are some $7 billion worth of pre-approved loans in the marketplace. That is, the value of the loans that have been approved for buyers to proceed to purchase right now. If they don’t act on those pre-approvals within two months, they lose that pre-approval and will have to go back to reapply. It is what is driving a lot of buyers to continue on their pursuit of a purchase.
All this activity reminds me that we are an essential service industry. As I have mentioned before, everyone needs a roof over their head. There are reasons everyday of the week why someone needs to sell and why someone needs to buy, and that will continue despite the Coronavirus. We will just conduct business differently.
Next week I will share with you some amazing numbers that will help explain why real estate will become highly sought-after as we move forward.
Until then, please lets all abide with the social distancing guidelines and if you are not at work for essential reasons, let’s stay at home with our loved ones.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group