- Commercial property manager Wouter Jellema breaks down the year that was
- From a short, but intense crisis, he saw strong recovery
- There were intermittent lockdowns, but overall the market is steady
Ending the financial year in lockdown seems typical when as I review the 2020-21 financial year as a whole.
Q1: short but intense crisis
In the first quarter of the previous financial year, we were finalising many ongoing negotiations around Covid-19 rent relief.
Some of the talks ended up in disputes, which went to the Small Business Development Corporation (SBDC) who offered support and assistance, or the case went to SAT for resolution.
Only a minority of the cases are still in conflict, but we implemented most of the rent reliefs by the end of the first quarter.
We also thought that the Covid-19 legislations around commercial tenancies would end by September. However, the state government decided to extend the laws, with some minor changes. Rent moratoriums and bans on evictions were in place until March 2021.
Q2: economic recovery
In the second quarter of the financial year, we saw a remarkable economic recovery in commercial real estate.
Properties on the market found a successful tenant, including those that were on the market for years. REIWA started to make forecasts for 2021, showing a positive future for West Australian real estate.
Q3: lockdown, bushfires, floods, improvement
The third quarter has been intense, known for its snap lockdowns (Perth had 3 from February through to July), the Wooroloo bushfires, Gascoyne Region floods, Cyclone Seroja in Kalbarri, and despite all that, the ever-growing real estate market.
REIWA published articles stating that the expected growth, as predicted towards the end of 2020, is most likely to be even more robust, with a residential market crisis where there were not enough properties available for those in need of accommodation.
Also, in the commercial real estate market, we started to see the same, with a slight rise in rental prices and increased sales activity.
Q4: another lockdown, steady finish
The final quarter of the year was ‘steady’.
We could see that the economy was built on excellent Covid-19 management by the government and the real estate growth since this financial year.
Finishing the financial year in lockdown, like many other regions in Australia, was perhaps apt for this strange financial year and showed us that the pandemic is far from over.
Hopefully, economic growth will continue during the new financial year as the Australian population gets vaccinated and the world starts to recover from the pandemic.