CEO Message //

MMJ Blogger
CEO Message //

At the conclusion of the first three quarters of 2020, we assess how the impacts of Covid-19 have directly impacted the property markets in Australia. 

The effects of the global Covid-19 pandemic continue to significantly impact the world.  As at the time of writing, there had been 33.5 million positive cases reported globally, resulting in over 1 million deaths.     

Australia has been extremely fortunate compared with other countries.  Whilst the death of a loved one is an extremely sad and emotional event, initiatives put in place by Australia’s governing bodies and medical organisations, have in the main, served to minimise Covid – 19’s impact. 

Australia has also not been immune from the disease’s impact on our financial and economic markets.  This has resulted in the Federal and State Governments having to introduce and legislate for various support packages, designed to carry predominantly small-medium businesses and individuals through to the pandemic’s conclusion. 

The main support initiative introduced included JobKeeper, JobSeeker, Cash Flow Boosts, Rent Relief, Land Tax Discounts and in association with the Banks, Loan Interest Deferment.

What impact has the events that have occurred in the first nine months of this year had on the property markets in Australia? 

For commercial property, the impact on activity has been enormous.  

In a news article which appeared in the Australian Financial Review recently, statistics released in an industry report noted the following. 

  • Commercial investment activity for the first 9 months of this year slumped, with the value of transactions almost halving to $15 billion compared with the same period for last year. 

  • The article went onto say that the slump in investment obscured the appetite for industrial and logistics property which rose by 10%.  This uplift moved industrial property’s share of transactions to 31%, compared with 15% for last year. 

  • Investment in office property was largely constant at 52%. 

  • Retail was the hardest hit, with sales slumping 51 per cent from the same period a year earlier. 

The positive impact on the industrial sector was foreshadowed in our June message when we said, 

“The winners of current conditions are the Industrial and Logistic sectors.  As more and more consumers move away from physical shopping and online, the need for quality warehouse space increased dramatically”

Across the commercial property sectors, there will be a continued flight to quality, as investors focus their requirements on properties that possess security of cash flow.  The gap between this type of securely leased asset and the rest, will continue to widen.

The impact to date of Covid-19 on the residential property markets has not been consistent and varies significantly depending on location. 

In our June update, we said 

"To date the severity of issues caused by Covid-19 don’t appear to have impacted the market as much as anticipated.  By owners holding off selling their properties into the current market, it has created a shortfall in supply which has resulted in prices not falling as dramatically as first thought, and in some markets, not falling at all”. 

This statement continues to be relevant for some residential markets, with Agents achieving sales in shorter selling timeframes when compared to last year and again, in some locations very low rental vacancies levels.  Conversely, there are other locations where price reductions have been large and rental supply is increasing. 

The greater Illawarra region, where MMJ Real Estate has a network of offices, reigned supreme in the residential market during Covid, recording the largest rise in house prices and sales in the past year.  House prices in the region have increased 12 per cent and sales were also up 14 per cent over the 12-month period.

The Central Coast market has also been recording fantastic activity as Sydney buyers flock to nearby regional pockets. The urgency to relocate to these regional areas was highlighted in our September figures for MMJ Real Estate’s Central Coast office that reported the average days on market of only 5. 

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It was love at first sight for Sydney buyers who snapped up this unique Central Coast property in Forresters Beach.

It is relatively easy to look back and assess the impact Covid-19 has had on our industry.  What is far more difficult to predict however is the financial, economic and potential personal hardship that could eventuate from the amendment to, or removal of the various support initiatives that have been in place for the last 6 months.  

Historically, Australians have shown remarkable resilience dealing with problems and obstacles that are laid at their feet and our expectation is that some businesses and individuals in the months ahead will require every ounce of fortitude they are able to muster leading into Christmas. 


Chris Johnson, CEO – MMJ Real Estate