The Sunday Reflection of Property News
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What is the main topic discussed in this episode?
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What challenges do newcomers face in commercial property negotiations?
When I first started looking into commercial property many years ago, I found it incredibly hard to negotiate because I didn't know what things were priced at. But the biggest tip that got me in the right direction was understanding the leasing market and what rental rates should be. So if you negotiate on a property that's got inflated rent, you're gonna be paying too much. Like for example, if your rent is 20% over market and you offer, on that rent, that means you paid 20% too much.
How has online shopping impacted brick-and-mortar retail during the pandemic?
So you've actually got to, before you've even put an offer in, you've got to understand what the true market rent is, back calculate it. Whatever the day one rent is, it doesn't matter. It's about the true market rent because that's what happens if your tenant leaves and you've got to find a new tenant and offer from that base. You know, it's difficult. And then, you know, this is why there's professionals in this space. Like this is not just finding what the latest four bedroom house sold for and pay a similar amount to it. You really got to do the math.
What are the implications of the declining fertility rate on real estate?
If you can't understand the local leasing market, then you're probably not going to be able to offer from a position of strength.
There's more retail spending without a doubt, which is taking place online. And that is a bit of a problem for bricks and mortar, right?
Absolutely. So what we've seen in the pandemic is that lots and lots of people became online shoppers for the first time. That means before the pandemic, we had 6% of all retail sales taking place online in Australia. During the first lockdown in March, April 2020, that shot up to 11%, so an increase of 5%. But then, once Australia was open in mid-2020, when in theory people could have gone back to shop wherever they wanted, we didn't go back to 6%. seven percent we created a new plateau at around nine percent so we really shifted a lot of dollars from brick and mortar into online store that is not too bad from a workforce perspective because it just means we need fewer shop assistants and we need more warehouse workers more delivery drivers but it is a problem for main streets because it does ultimately mean that more and more brick and mortar stores you
we're not talking about bunnings or big shops but small stores that they will have to close their doors because they operate on margins of five to ten percent or something like this and so if if their sales go down 15 it doesn't make any sense for them to stay open so then you have empty shops on a main street and that is the death of a main street if you are a shop owner in a main street you see any kind of store being available for lease that is a catastrophe for you it means that your main street becomes less attractive that it becomes less of a destination therefore all the local governments all the you know business associations whatever you have in your in your local area they must band together to fill those shops be it with some sort of discounted retail you know make it into a ball pit make it into a free community center arts installation whatever it is you must not have empty storefronts at your main street if you want to continue to have the main street as a
destination.
And just to finish up, Simon, let's go from bricks and mortar to the fertility rate because there's some data around that is showing that the fertility rate has actually fallen to an all-time low of 1.58 kids per woman in 2020. So the impact of COVID will only be seen in data for the year 2021, but that's likely to continue?
How does lifestyle attract buyers to the Sunshine Coast?
Or do you think once things start to get a little bit back to normal, that might be reined back?
So at the start of the pandemic, which was meant to be the only lockdown, the first lockdown, people said, surely there'll be a corona baby boom in nine months time, as if the only thing we were going to do in lockdown is to procreate. So as a demographer, that doesn't come as a surprise that this didn't happen. In times of economic uncertainty, in times of historic pandemics, there were always fewer rather than more births simply because, you know, if you're uncertain about your income, if you're uncertain about your economic future, you're not going to risk putting a very expensive thing into the world.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:01–0:07
2
What challenges do newcomers face in commercial property negotiations?
0:07–0:35
3
How has online shopping impacted brick-and-mortar retail during the pandemic?
0:35–1:00
4
What are the implications of the declining fertility rate on real estate?
1:00–3:44
5
How does lifestyle attract buyers to the Sunshine Coast?
3:44–4:46
6
What factors are driving growth in the Sunshine Coast real estate market?
4:46–5:54
7
What advice is given to first-time homebuyers in the current market?
5:54–8:15
Speakers
3 identifiedMore from Aussie Real Estate Podcast
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