New year, new optimism

2 February 2021

By HELEN HULL

2020 was a year like no other. The impact of the COVID-19 pandemic was felt across the nation and the real estate industry in New South Wales was certainly not immune. There were challenges and we had to adapt quickly. But, as we head into a new year, there’s a strong sense of optimism and resilience amongst real estate professionals. We spoke to agents for their insights about tackling the year ahead.

Residential sales

Thomas McGlynn, Head of Sales at BresicWhitney, predicts that 2021 will be an unusual year.

“While there will be some highs from big results, economically we’re still going to be recovering from the pandemic, which will see us helping people who aren’t in the best position financially,” he said.

Thomas also said that we’re not likely to see the traditional seasonality in the market cycle across most areas of New South Wales which comes with Winter holidays and overseas trips, likely resulting in sales agents experiencing high stress levels.

“Managing mental health and wellbeing will be essential,” he emphasised. “Sales agents will need to ensure they take six to seven mini-breaks throughout the year to rest and recuperate, and ride the waves of what will be an unpredictable market.

“Managing mental health and wellbeing will be essential. Sales agents will need to ensure they take six to seven mini-breaks throughout the year to rest and recuperate, and ride the waves of what will be an unpredictable market.” – Thomas McGlynn, BresicWhitney

I believe that those who have a strong personal development ethic and look inwards at themselves will respond well.”

Braden Walters, Principal at Belle Property Byron Bay/Lennox Head, believes the biggest challenge that sales agents will face in 2021 will be the slow return to normality and the uncertainty around the economy as we come out of the pandemic.

“There are so many unknowns,” he said. “Will people move as frequently? Will they move more or less often? Will obtaining finance approval continue to be a struggle?”

With this in mind, Braden said sales agents need to arm themselves with knowledge.

“Spending the time to become more educated and put yourself in the best position to offer more services to clients will be the best way to get ahead during the return to normality,” he added.

Property management

According to Suzie Hamilton-Flanagan, Head of McGrath Property Management for Sutherland Shire and Illawarra regions, property managers will need to be agile and pivot in order to deal with the constantly changing environment that lies ahead in 2021.

“Property managers will be faced with landlords’ concerns regarding the inconsistency of rental payments and the inevitable flow-on ability to pay their mortgages,” she said. “With the moratorium on evictions due to COVID-19 impacted tenancies extending through to 26 March 2021, we’ll continue to find ourselves managing a high level of rental arrears.

“We all need to try not to take things too personally,” she said. “That’s why it’s important to create a robust workplace culture built on strong teamwork. Celebrating milestones and wins is a must. Team awards for recognition for hard work or reaching targets, as well as celebrating days like birthdays and anniversaries, have a big impact on how property managers deal with situations throughout the day.

“Property managers will continue to see shifts in the expectations of landlords and tenants. Because of this, we need to have a sharp focus on client experience and consider our value as trusted advisors who offer a complete and fully-rounded service.” – Michelle McLean, Leah Jay

“Being comfortable and feeling valued means people will reach out to others in the team when they need help, because they know they’re in a non-judgemental and supportive space.

“We’ll be looking at ways that technology can better support property managers and provide more automated workflows and task management using advanced AI.”

Michelle McLean, Senior Property Manager and Compliance Manager at Leah Jay, said property managers need to look beyond the basics of collecting rent and doing inspections

“Property managers will continue to see shifts in the expectations of landlords and tenants,” she explained. “Because of this, we need to have a sharp focus on client experience and consider our value as trusted advisors who offer a complete and fully-rounded service

“Soft skills, like relationship building and empathy, will come to the fore. Property managers need to focus on understanding individual circumstances and be adaptable to deal with the varying needs of both landlords and tenants.”

Auctioneering

Jesse Davidson, Chief Auctioneer and Director at auctionWORKS, said 2021 will see auctioneers continuing to educate sellers, buyers and onlookers that auctions can be conducted in a safe and competitive environment.

“We’ll have to manage COVID-19 safety restrictions at auctions and ensure that these restrictions don’t deter sellers from listing and choosing auction as their preferred method of sale,” he said. “This should be an easy process, given that we had so much success navigating and managing changes to the auction environment in 2020.

“Moving forward, auctioneers will need to be prepared, build high-quality teams and focus on time management to maximise business viability and manage the influx of stock that’s expected in the first half of 2021.”

“Auctioneers need to work out the most efficient and successful way to handle the mix of in-person buyers and those bidding online. The challenge lies in creating momentum during the auction, which is important to ensure a great outcome for our sellers.” – Briannan Davis, Cooley Auctions

Largely as a result of the COVID-19 pandemic, Briannan Davis, Auctioneer at Cooley Auctions, said there’s been a shift to buyers using online platforms to bid at auctions rather than attending in person.

“Using these platforms will become increasingly common as we progress through 2021, especially if international borders remain closed,” she said. “Auctioneers need to work out the most efficient and successful way to handle the mix of in-person buyers and those bidding online. The challenge lies in creating momentum during the auction, which is important to ensure a great outcome for our sellers.

“We saw in 2020 how resilient and adaptable the real estate industry is, particularly auctioneers, and I have no doubt this will continue in the coming year.”

Buyers’ Agency

The biggest challenge in 2021 for buyers and buyers’ agents alike will be rising prices and an ongoing lack of stock, according to Nick Viner, Principal at Buyer’s Domain.

“I’ve been a buyers’ agent for 11 years and I’ve never known stock to be particularly abundant, and this year I expect that demand for good quality properties will continue to outstrip supply as prices strengthen post-COVID,” he said.

“It will be fascinating to see the ramifications of the proposal to dump stamp duty. It may cause uncertainty, as some sellers and buyers will want to adopt a ‘wait and see’ stance. But, as we’ve seen in the past, this sort of delaying action can work against you, with any preserved savings from the removal of stamp duty acting as a possible shot in the arm to property prices.”

To overcome the issue of low stock levels, Nick said buyers’ agents should give their clients access to a wider range of properties more quickly.

“You need to access properties before they hit the market, and understand why a particular property is for sale and what the seller’s mindset is around price expectation. You need to be in a position to move quickly when the opportunity arises.” – Simone Luxford, Essential Property Wealth

“Our role is to save time for our buyers and bring them properties that they wouldn’t necessarily have considered,” he explained. “It seems to get harder each year, as there are never enough properties to meet the demands of the market, but we don’t get paid until we find a property our clients like and buy it.

“As a buyers’ agent, we add value to our clients by thinking outside the square, presenting clients with properties in areas they haven’t considered, identifing properties with different configurations from their original expectations and those that have been poorly marketed and have perhaps slipped under the radar. We need to take the time to physically inspect all of these options, so we can find the gems that the buyers can’t find themselves.”

Simone Luxford, Director at Essential Property Wealth, said that with stock at such low levels, it’s more important than ever for buyers’ agents to manage relationships with selling agents.

“You need to access properties before they hit the market, and understand why a particular property is for sale and what the seller’s mindset is around price expectation,” she said. “You need to be in a position to move quickly when the opportunity arises.

“That’s why being top of mind with the selling agent by sending them regular buyer alerts is critical, because a lot of properties won’t even make it to market or auction.”

Agency leadership

Cameron Nicholls, Director and Principal at Nicholls & Co Estate Agents, said he expects 2021 will see a divide emerge regarding the results achieved by real estate agencies.

“Some will experience great success over the next year,” he said. “There will be agencies that go ahead in leaps and bounds, while others will be left behind because they simply haven’t adapted quickly enough.

Cameron said that the market will start to find its feet again in the coming year.

“Some agencies are playing catch up and are taking their piece of the market where they can,” he said. “Successful agencies will have set themselves up well for 2021, having found innovative ways to conduct business in our ‘new normal’ marketplace.

“Some will experience great success over the next year. There will be agencies that go ahead in leaps and bounds, while others will be left behind because they simply haven’t adapted quickly enough.” – Cameron Nicholls, Nicholls & Co Estate Agents

“For example, people haven’t travelled overseas during the Summer and have stayed closer to home for holidays. In our business, we brought forward our campaigns, holding open homes in the first weekend of January, rather than waiting until after Australia Day as we normally would.”

Nicole MacGee, Head of Agent Support and Human Resources at The Agency, said 2021 will be all about motivating staff to achieve their goals by working hard, but also ensuring self care.

“More than ever, having a work-life balance is important,” she explained. “More agents are working around the clock to meet client expectations, from tenants who require repairs to people who have decided that now is the time to buy or sell.

“Helping staff to manage their time by streamlining processes to assist with the increase in enquiries will be a high priority to ensure they stay on top of their work and don’t burn out.”

Strata management

Gary Adamson, Managing Director of Strata Management Services NSW, said managing people who are in arrears with their levies will be a challenge for strata managers in 2021.

“Levy arrears continue to grow and it’s something that we’re going to have to address,” he said. “From the end of March, when the JobKeeper subsidy runs out, we’re expecting to see an increase in the volume of people unable to pay their levies.

“We’re also expecting that bankruptcies will occur and the Owners’ Corporation will be left to pick up the tab for things like compulsory insurance on the building.”

Gary said it’s important for strata managers to plan for these issues and assume the worst.

“Owners always have the option of selling a property, and I think that we could see more properties come onto the market,” he said. “There are lots of people who have been living beyond their means for an extended period of time, even before the impact of COVID-19 became a factor. They’ve now reached a stage where they may no longer be able to deal with the debts they’ve been accumulating both prior to and during the COVID-19 pandemic.”

“We need to rely more on technology for efficiencies, but delivering things via email and phone calls isn’t sustainable. We plan to redirect owners to a client portal, with logins and passwords where they can access the information themselves.” – Reena Van Aalst, Strata Central

Reena Van Aalst, Managing Director of Strata Central, said strata managers will continue to have to navigate online meetings.

“While strata managers are experienced in undertaking meetings in person, it takes different skills to do an online meeting and you must ensure that the cameras, microphones and lighting are of the right standard,” she said.

Reena added that with people working from home there has been a significant increase in phone calls and emails and, therefore, it’s important to be on top of cyber security.

“As an agency, we’ve rolled out recommendations regarding email security and have ensured that home internet connections don’t expose us to cyber security issues.

“We need to rely more on technology for efficiencies, but delivering things via email and phone calls isn’t sustainable. We’ve redirected owners to our client portal, with logins and passwords where they can access the information themselves.”

Commercial

Helen Storey, Director and National Portfolio Manager at CBRE, said 2021 presents many unknowns.

“For example, are people going to be returning to their office and, if so, to what extent,” she questioned. “I expect there will be a hybrid approach and a change in the way commercial space is used. It’s likely that lettable area will be the same, but the way tenants use it will be different. There will be more of a focus on innovation, technology and wellness.”

Helen said that the real effect of the COVID-19 pandemic will be seen when JobKeeper ends in March, and it’s likely that some already distressed businesses won’t make it and rent abatements will need to continue for a period to allow others to survive.

“In the six months of March to September 2020, one million new households started shopping online – up 75 per cent on last year. We expect that this trend towards online shopping is going to continue and we’ll see a lot of retailers reducing their footprint and closing stores.” – Bobby Suminoski, Four Walls Commercial

“At the moment, there’s a drive on the tenant communication piece, which is being supported by new technologies that must be embraced by commercial agents so that they can remain competitive,” she said. “We need to be over-servicing landlords and tenants, and there needs to be a focus on transparency.”

Bobby Suminoski, Director and Principal at Four Walls Commercial, said the retail and commercial sector has seen the focus move to online customers.

“There has been a big shift in the way retail does business,” he said. “In the six months of March to September 2020, one million new households started shopping online – up 75 per cent on last year. We expect that this trend towards online shopping is going to continue and we’ll see a lot of retailers reducing their physical bricks and mortar footprint and closing more stores.

“A clever and adaptive approach between landlords and tenants will be needed, with tenants looking to renew their leases looking to reduce their footprint following the success of remote working. Australia’s more conservative approach to development financing and speculative developments, along with our low vacancy rates will enable us to weather the storm better than most other capital city markets around the world.”

References

Hellen Hull 2021, New year, new optimism, accessed 11 June, 2021,
<https://www.reinsw.com.au/web/News/Latest_News/2021/02_February/New_year_new_optimism.aspx>.

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