Gavin Rubinstein, principal, Ray White, The Rubinstein Group; Mark Wridgway, director and auctioneer, RT Edgar; Hamish Bowman, director, Ray White Projects and licensed real estate agent; Jason Matigian, director, JPM Valuers; and Neal Ellis, national director, Preston Rowe Paterson Australasia, joined an AltX panel on 27 August to discuss the market. The consensus was clear: the performance of the Australian property market is defying logic.
“The prices that were being achieved in the middle of 2020 are just not relevant in the current climate,” Mr Matigian said. “We did a valuation in Manly recently. The house next door sold for $4.1 million in May or June 2020, so we put our thinking was around $4 million on the property which was similar. It sold for $6.3 million! We see this across the eastern seaboard in Sydney and even once we go to the middle and the outer rings.”
When asked about the Victorian market, Mr Wridgway sees similar scenarios.
“Dollar-per-square-metre rates have been thrown out the door. From September 2020 to now, some places across the peninsula have experienced an average of probably 30% to 40% growth. And in some of those key assets, those generational properties on the cliff top... some of those have grown 50% to 60%.”
Mr Ellis said the heat is not limited to residential markets — it seems to be extending to commercial real estate as well.
He said: “We recently assessed a retail property with eight tenants. They had fallen somewhat behind on their rent. The asset was in a secondary location with a historic building on it — and it sold on a 3% yield for $12 million! If you look at the strength of the tenant and a 3% yield, it just defies logic. But people still have the confidence to invest. There’s a lot of money out there.”