As we start to see our economy restart and our lives slowly get back to normal, it’s been great to see the real estate industry snap back to life. While no-one has a crystal ball and can foresee what the economic fallout will look like over the next six to twelve months, we are certainly seeing some encouraging activity. For now, this is what we are seeing.
The Residential Market
With the return to open house inspections and live onsite auctions, we are seeing a pick-up in activity in the market. Our Buyers Agents reported long queues at inspections last Saturday and properties are trading. Two properties exchanged on Monday after being listed for 8-10 days. This pick-up at open houses is a combination of pent up demand and people keen to get out and about with restrictions easing. A local agent was quoting $950k for a 1 bedroom, 1 bath property in Bellevue Hill and has now lowered it to $880k. An Elizabeth Bay studio apartment was quoted at $600k and has now been lowered to $560k. Both have converted from private treaty to auction this week.
According to Domain.com.au, more than 13% of property listings in Sydney and 10.7% in Melbourne had their prices discounted in April. This was up from 6.7% and 3.7% per cent respectively from April 2019, equating to nearly double the number of discounts in Sydney and almost three times the amount in Melbourne.
Damien Cooley stopped by our office last week and gave us some facts and figures regarding new auctions. The restrictions were lifted on Sunday 3 May and he saw 70 new auctions booked in for the following two weeks.
Rose & Jones Buyers Agent, John Anderson purchased an apartment 2 weeks ago in Potts Point for a client. Based on October 2019 to February 2020 valuations we saw a valuation range of $2.04m – $2.2m. Based on 2017 numbers we valued it at $1.9m. John ended up purchasing it for $1.85m. There was no competition for this property and an offshore vendor who might have been feeling keen to exit the market.
Of the commercial properties we have under management, a couple have been hard hit and business has folded (A Travel Agent specialising in overseas cruises) and another (food & beverage) which was already experiencing finanical trouble Pre Covid-19. Tenants are seeking rent free periods and each tenant is being dealt with on a case by case basis. Any deferrals will be required to be paid back in 24 months.
Our vacancy list is NOT any bigger than at other times. Quality properties are maintaining their value. We are noticing properties sitting on the rental market for slightly longer than usual and if required, we are recommending to our landlords to offer a 2-4 week rent free period in order to rent properties currently available for lease in order to preserve their value