Q&A with Andrew Bell of Ray White Surfers Paradise
A while ago, Urban had the opportunity to sit down with Andrew Bell from Ray White Surfers Paradise to chat about the property market and COVID-19’s positive and negative impact on real estate.
Urban [U]: Queensland was the first state that eased COVID-19 lockdown restrictions. Do you think this would contribute to an influx of interstate buyers? How would this impact the property market in Queensland and the state of Queensland as a whole?
Andrew Bell [AB]: I do not believe the fact that Queensland was the first to ease COVID-19 lockdown restrictions has had any effect on an influx of interstate buyers, but rather our early surveys of both buyer and tenant enquiries is that many people reassessed their life during the isolation period as a result of some having lost their jobs and others simply deciding that life is not quite as they wished it to be going forward and they just took the bold decision to either immediate migrate or put the wheels in motion to migrate. The impact initially was seen in the rental market which makes the most sense as people who made the decision to move immediately want to rent for a period of time to decide where they might want to permanently live before buying. Interstate buyers have been a strong supporter of Queensland now for the last twelve months and we expect them to continue to do so, but perhaps in greater numbers making up for an easing back of investor buyers and international buyers in the short-term.
U: In your 45 years of experience in real estate, how does COVID-19’s impact on the property market differ from previous property market crises e.g. ‘87 Global Financial Crisis, ‘08 Global Financial Crisis?
AB: COVID-19 differs from previous substantial economic downturns largely because of the size of the impact. It has been described on an international basis as 30x worse than the GFC. It is also affecting a much broader width of people and that has been reflected in forecasts of 15% unemployment, the largest contraction of the economy since the Great Depression etc. etc. The impact has many similarities to previous downturns but simply much more severe and most probably for much longer.
U: What is the most challenging part so far about the COVID-19 crisis? And what has the Ray White Group been doing to boost consumer confidence?
AB: The most challenging part so far in terms of real estate is purely the impact in the rental market with around 20% of people asking for rent relief in the residential market and over 50% in the commercial market. A great deal of our time has been devoted to wading through those cases, but it has stabilized and we are now seeing less than 6% of our residential rent roll requiring some rental assistance and around 40% of the commercial rent roll. At the moment, in the sales arena, there remains a shortage of stock for sale and a reasonable number of buyers in the marketplace, but I am sure that the scenario will change within 60 days.
Ray White has lent on its 120-year history through many shocks to the system including two World Wars, the Great Depression, and all the way through until the GFC, and so we have been able to calm many of our clients with good advice about the journey we are on and whilst there will be pain there will also be solutions for most. We have had very high levels of communication not only with our own clientele but providing the same information broadly through the media nationally.
U: White was one of the first real estate companies to go online and conduct virtual property tours, auctions and online training sessions. Do you think these online auctions and training sessions are here to stay?
AB: Online auctions, private auctions, remote auctions, and in general all auctions that are not held in the public arena are actually nothing new. For more than 20 years at our in-room auctions it has been common to have our seller on the phone in Melbourne and our buyer on the phone in Sydney, and so we adapted very quickly. I think the future will be a marriage of both in-room auctions, on-site auctions, and a variety of electronic forms of engagement for auctions. At the end of the day, it is what is best for our clients and we now just have an added tool to a highly successful method of selling goods that has been around for well over 2,000 years.
U: What opportunities do you see in the near future for property developers and home buyers in Surfers Paradise/Queensland?
AB: Whilst every part of Australia’s, and indeed around the world, real estate markets will be affected by the economic effects of COVID-19, real estate remains a fundamental necessity in everyone's lives. Everyone has to have a roof over their head whether they rent it or buy it, and so whilst demand for purchasing may ease back because of economic conditions, those people will have to rent, and so we will see stronger demand for rentals. What we will be looking for here on the Gold Coast is people who see value in our real estate compared to the rest of Australia and who are particularly keen on a new and more affordable lifestyle. Just last Saturday I spoke to someone who moved from Sydney and they talked about what a great move it was, how their whole family loves it, how the people are more friendly, the climate is better, how it is better value for money, and how it is the best lifestyle by comparison. I am suspecting we are also going to see an increase in overseas buyers who have eyed off how well Australia handled COVID-19, how wonderful our health system is, who appreciate we are actually underpopulated, and who will see how the Australian dollar softened and that there is great value in buying our real estate. I think we are going to see a lot more higher wealth and mid wealth people looking to migrate to Australia as a country that has stood out to the world for all the right reasons in 2020.