2021 will be a year to watch says newly re-elected Real Estate Institute of Australia President Adrian Kelly.
Both Mr Kelly and incumbent Deputy President Haydn Groves were re-elected to their positions at the AGM held last week.
In addressing the AGM, Mr Kelly said although it’s been a difficult year, property values have largely held in all regions and in fact in most regional parts of Australia, property values are on the rise.
Mr Kelly said this is largely being fuelled by people wanting to leave the larger cities, something which was happening prior to COVID-19 but which has now been amplified due to the pandemic.
“The wild predictions of 30 per cent of our tenants becoming unemployed has proved to be unfounded with our members reporting less than 5 per cent of tenants being impacted in the larger capital cities, in particular Melbourne and Sydney and less than 1 per cent in regional locations.
“In fact, we are now seeing rental vacancy rates tightening across many markets,” Mr Kelly said.
Mr Kelly also said the impact of forced lockdown in Victoria was of great concern, particularly if it had a flow-on effect for other parts of the country.
“Thankfully, that lockdown and the measures implemented managed to suppress the virus and the property market across that state is showing great resilience in most suburbs though there remain some pockets which are slower to recover than others,” said Mr Kelly.
Mr Kelly said the pandemic saw the state-based REIs deal with the fastest-changing policy settings ever seen.
He noted that although the legislation was introduced to protect tenants from being evicted, investors who also faced job losses were left unprotected.
“The saving grace in this scenario was the banks coming to the party by enabling mortgages to be paused by those owners who found themselves in some difficulty.
“The Federal Government should also be commended for the introduction of the JobKeeper and JobSeeker wage subsidies which in effect were forms of rental assistance.
“Our property managers found themselves between a rock and a hard place particularly given that the tenant lobby groups were being very vocal in the media whilst forgetting or ignoring the impact on our property owners.
“As we reach the final stages of 2020, it is clear that our industry and the property market generally has withheld the shocks that were previously forecast.”
But next year will be an interesting one to watch.
“With the tenant non-eviction periods coming to an end early in the year coinciding with the finalisation of mortgage pauses and no doubt these things will be centre stage in the New Year,” Mr Kelly concluded.