Welcome to my reflections and predictions. The beginning of 2021 was filled with promise. Vaccines were to be rolled out and we could look forward to a safe return to normality, even normalcy if you preferred making up new words as well. We could move from a level of terror, with no end in sight, to a pathway to freedom.
Life wasn’t meant to be easy and so it was. With the vaccine stroll-out, a limousine driver, lockdowns, border closures, double doses, Delta and Omicron, it was a tough year, except for the West Australians. Bring on the boosters and a better 2022 for us all.
I like to ask people for their personal highlight of the year. It brings out the most unexpected answers and insights into the life of my friends and acquaintances. Recently, many people found it difficult to come up with a single highlight. Most had a bland year. What was mine? I also needed to have a good think and ended up selecting Melbourne, the Mighty Dees, winning the grand final in Perth. I wasn’t there, but I have a clear memory of their last flag in 1964. Another good time was had in Western Australia.
The business highlight was that Marriott Lane did very well in both sales and rentals. With a stable team of wonderful people, we all had a good year. The property management team worked above and beyond, dealing with a falling market, distraught tenants, anxious owners and restrictions on how they could work. I’m fortunate to be surrounded by such great people.
Rentals. There continued to be a significant impact from the pandemic for residential real estate rentals. Last year and again this year, rents continued to decline in our vicinity. Recently, I did quite a lot of analysis and discovered that the rent owners now receive for their property is the same amount as in 2013 or 2014.
Most of the practical issues relating to the virus are behind us and we are starting to recommend slight rent increases, particularly those hard-hit by a poor market when the tenant originally moved in.
Sales. Last year, I predicted that 2021 would be ‘comparatively strong’. That turned out to be an understatement with the market rising by an incredible 24% in Sydney. Our sales department has been busier than ever, setting personal and office records.
I’ve written some blogs that analyses both the sales and rental markets in the Lower North Shore in more detail.
What will 2022 bring? Importantly, a celebration party for our 30th anniversary in July.
Rents are likely to rise slightly but will be constrained by the continuing very low wage inflation and slow population increase following a net decline during last year. The supply and demand issues are unlikely to be ameliorated for another one to two years.
Surprisingly perhaps, my view is that sale prices will remain comparatively strong, demand being consistent due to unchanged economic settings of very low interest rates, policies favouring capital over income, higher personal savings levels and a gradual return to a stronger economy. Eventually, interest rates are certain to rise and cause a slowdown, or worse, in sale prices. The RBA were indicating 2024 for this event, but now their outlook is for 2023, with many experts putting their money on late 2022.
Unfortunately, the State Government didn’t get around to addressing the negative effects that Transfer Duty on real estate sales causes to first home buyers and every person who wants to relocate to more suitable accommodation. This would have a very positive effect at many levels over the coming decade, but sadly it’s been all too hard for our decision makers.
What I’m thankful for? For all my family, staff, clients and friends surviving the pandemic so far. I’m grateful for my colleagues exceeding expectations in another turbulent year, for going above and beyond for our clients and for turning obstacles into opportunities. Both our number of sales and managed properties increased again this year.
Real Estate, providing shelter, is endlessly fascinating and I’m enjoying it as much this year as ever, particularly as Marriott Lane celebrates 29 years in Crows Nest. We are seen by our clients, prospective clients and competitors as a leading agency in the Lower North Shore and possessing a great reputation. We are currently rated Number 1 in the vicinity by Google (350+ reviews at 4.9 stars) and Rate My Agent (Top 5 in Sydney for Property Management).
I would like to thank you for the support you have shown us and I look forward to seeing you again next year. I wish you and your families a very happy festive season and New Year and a safe, prosperous and memorable 2022.
Wayne Marriott, Principal