Home now your oasis in a crisis

But unlike the GFC, there’s a sense of exciting possibility as our Gold Coast weathers the pandemic storm and a city looks ahead, says boxing property man Conal Martin

WITH ANN WASON MOORE

TEN years ago, the Gold Coast was hit by a tsunami.

Sure, when the wave arrived early on February 28, 2010, it barely caused a ripple – measuring just 100mm – but the crowds of spectators didn’t know that as they gathered on the beach to watch what would happen. They swarmed upon Burleigh Hill even as lifesavers urged them to flee, with the city having assembled an evacuation centre, hotline and emergency response teams. History shows it was much ado about nothing, but for Burleigh resident and Kingfisher Realty founder and principal Conal Martin, it is the closest scenario he has experienced to our current pandemic. This time, the forecast disaster is both physical and financial, the warnings are being issued from governments and experts alike and the people crowded on Burleigh Hill are, well, still the people crowded on Burleigh Hill. Despite the cries of impending doom, Conal is once again watching in amazement – this time as the property industry defies expectations. Just as Australia avoided the worst of the health implications of COVID-19, he says real estate is proving remarkably resilient.

Whether it all comes crashing down in October as relief packages are wound back is yet to be seen, but as this former boxer says, don’t count the city’s property industry out.

In fact, Conal says even if the economic tsunami does arrive, our defences are strong.

“We’re actually seeing some amazing prices right now – 79 Hedges Avenue was just sold for $25 million … you don’t see that in a recession market,” says Conal, whose agency specialises in Burleigh and the southern Gold Coast area.

“And it’s not the only one, another property sold on Hedges for more than $5m last month, and we sold one for more than $6m late last year … prices are not going backwards.

“This is a completely different ballgame from what we saw happen during the GFC. Back then it was the top end of the market that took the biggest hit, it went down fast and it stayed down.

“In that first year of the GFC in 2008, we lost 50 per cent of our revenue. There were so many properties coming on the market but they wouldn’t sell.

“That property recession didn’t end on the Gold Coast until 2012, and we only got back to pre-GFC prices in 2016.

“But during the GFC you could see exactly why and how it was happening. It was a very difficult time but you could see all the pieces and how they fit together. An economic crisis meant people had to sell, then there was a glut of properties, plus relatively high interest rates, banks in crisis and very few cashed-up buyers … it could only spell disaster.

“The emotion then was desperation. This time it’s different. It’s more like confusion. Our property market was surging just as this happened, so what will happen next? There is certainly the fear that in October when JobKeeper and other stimulus packages are rolled back that the walls will cave in, but we have some very positive weapons on our side – low interest rates and low stock. That’s actually the formula for a strong market.”

In fact, Conal says community sentiment is also positive, with his team spending April calling hundreds of clients to check on wellbeing. He says surprisingly few reported distressed circumstances, with most enjoying the extra time with family. Ironically, he has been significantly affected himself, with his mid-July wedding now postponed.

Conal says although it is similarly impossible to predict the future of the property market, he has firm advice.

“The response we got from a lot of our clients was simply that they were happy staying as they were. Most were okay financially and not in a position to want to move,” he says.

“People were enjoying the extra time at home with loved ones and those in more stressed circumstances were getting by okay. I think that sums up the general feeling of the city. We’re happy to bunker down for a little while. And, conversely, that actually makes the property market stronger.

“My advice to clients, whether buyers or sellers, is that you shouldn’t buy or sell right now. If you don’t have to move in the market, then just hold tight while we wait to see how it shapes up. However, if you need to sell because you need more space or less space or for whatever reasons, or if you need to buy, then now is actually the perfect time. If you’re selling, there is very little competition. Low supply means a good seller’s market.

“But if you’re buying, there is also very little competition, you’re not going to end up in a bidding war. Add in low interest rates and it’s a great time for either side of the transaction. And that’s what we’re seeing right now.

“At the peak of the pandemic panic, clients listed a property in the mid-to-high $2m and I explained to them that given the lack of open homes and travel and so on, to be prepared for low interest.

“Well, it’s had more interest than any other property I can remember in recent times. We’ve had about four offers in six weeks, including a guy from Spain and one from the UK.

“We’re defying the odds. Is this a rubber band that’s stretching and will break in October? Or are we just going to keep on keeping on?

“I think the lockdown has brought on a renewed passion to make your home your oasis. I also think people are finding more money in their pockets because of enforced savings, nowhere to go and nothing to buy and holidays being cancelled, so more people are thinking about upgrading.

“Our tourism market has taken a hit but as borders open we can turn it around.

“We’re learning how to fight back against an economy in a downturn. Back in 2008 in the GFC we had no control, we watched as our financial position spiralled down. This time, we can take action and I really think we’ll get through it.

“Will it be a boom? No. But I don’t think it will be a dip either. It’s a bit like we were in 2005, a bit of a flatline. But this time there’s an undercurrent of excitement.”

However, Conal says both the first-home and rental markets are more likely to be negatively impacted by the pandemic fallout. Both segments include a higher proportion of workers affected by income cuts and unemployment.

“I think one of the reasons the top end of the market is thriving is because those clients’ jobs have not been affected. The first-home buyers market however is generally a demographic with less job stability and the rental market even more so. That’s why we’re seeing residential rents drop by 30 per cent already.

“Burleigh is not really the first-home buyer market, but you can see those indications, especially in western Sydney. On the Gold Coast, it will be the beachside suburbs which will be most protected from any market fallout.”

When it comes to protecting the property industry, Conal turns to a boxing analogy: stay fit and keep your hands up.

He says one of the best ways the Gold Coast can keep economically fit is by continuing to invest in new projects. Top of that list is the light rail. Conal says Burleigh residents are divided about the infrastructure, but it seems a no-brainer to him.

“If we were in the ring right now, this is the time when you need to be smart about your next move, you need to be thinking a step ahead. That’s exactly what the light rail represents. Tourism is our lifeblood and you can’t have a truly successful tourism city without infrastructure.

“The crazy thing is that decades ago when high-rises started being built in Burleigh, all the locals were opposed to it, but the very people who supported it and bought those first units are now the ones complaining about light rail.

“Yet it’s the density of this area and its popularity that is bringing the light rail here. You can’t just buy into it and then lock it off. The light rail is the best thing to happen to the Gold Coast long-term. It’s literally what will bring us into the future. The thing about staying in the present is that you get left in the past.”