Keylin’s Louis Cheung on adapting to market changes during the pandemic

Our CEO Kirsty Chessher-Brown interviewed Louis to hear his thoughts on how COVID has affected the property market in SEQ and how he sees the industry managing these challenges going forward.

Louis Cheung, Director at Keylin Group

2021 hasn’t been a smooth ride we were all hoping for on a COVID front but the property market has been a shining economic light. What are you seeing on the ground in terms of who’s buying?

We’ve got a lot to be grateful for in Queensland and particularly given the challenges that our southern counterparts in Sydney and Melbourne have experienced. We’ve noticed two emerging trends – a flight to quality and the return of investors to the market. The result of COVID-driven lockdowns and corporates allowing their people to work from home has put wellbeing at the top of buyers’ lists, which has driven people to buy in locations where there is a quality lifestyle. Second of all, and that’s most recently, investor sales are starting to pick up and that’s mostly due to availability of credit, low interest rates, and renewed and strong confidence in the property industry. We are seeing a return of investors from interstate, particularly Sydney and there is incredible confidence in the Brisbane and Gold Coast markets.

What long lasting impacts do you think the pandemic will have on the way we deliver spaces, places, and homes?

COVID has brought us a time where we’ve had to adapt and change as a business and we’ve observed that across many in our industry. One change that we’ve noticed is that working from home spaces need to now be more than a desk in the corner. It needs to be carefully considered because people are working from home for a considerably longer period and spending a lot of time in that space. So, what we’re seeing is that design for the work from home space has really evolved, and buyers are demanding more from that space. In the apartment market, we’re also seeing strong demand for larger apartments, including for four-bedroom product. That demand is being primarily driven by downsizers and families and both groups are seeking to be closer to amenities. For example, good schools and major healthcare precincts.


What’s the biggest challenge that Keylin faces in getting stock to market?

Businesses in general have had to adapt very quickly in order to survive during the pandemic. What we’ve seen is that the peaks and the troughs are more dramatic and the cycles are getting shorter. You just have to look at what’s happened to the Queensland market from September 2020 to June 2021, the sort of movement and velocity we’ve experienced presents opportunities and also challenges for the industry. Currently, I see two major challenges. There is an emergence and great opportunity in Build to Rent. However, the government policy response to a new asset class has been extremely slow. Aside from the State Government-initiated trial projects, Queensland is at risk of falling behind our interstate counterparts. We do need governments to be on board and to be agile to allow us to capture that opportunity for Queensland. Secondly the big issue of the moment is construction costs and labour shortages. The constant fluctuations and uncertainty in some supply chains brings financial and delivery challenges.


What’s your prediction for the property industry over the next 12 months and are there any potential showstoppers?

I personally feel extremely positive about the next 12 months but the key focus will be on delivery of projects. There appears to be risk that some projects may not have fully benefited from an upswing in selling prices but now is facing the full force of construction costs, uplift, and labour shortages.

We also need to be mindful that there may be headwinds in the form of inflation and interest rates, which will have an impact on the availability of credit. There is a sentiment in the market that low interest rates will stay for a little bit longer, but if inflation creeps in and there is significant wage growth, then we’ll see interest rates rise sooner than predicted.

Ahead of a federal election, most likely to occur sometime in 2022, what are the critical things that you’d like to see form part of a campaign?

The property industry is a huge contributor to GDP and employment. The good news is that the property industry is generally unscarred coming out of the pandemic so we are very lucky. It’s positive to see the announcement from Labor confirming that they will not propose changes to negative gearing and capital gains tax, and a continued level of support from the Federal Government level is critically important to keep a thriving industry, thriving. We just can’t afford to put the hand brake on the industry.

Keeping Australia at a  AAA credit rating is extremely important because with higher debt levels, a good credit rating means lower borrowing costs and that keeps the interest expense at bay and promotes more capital expenditure on infrastructure. More spending on infrastructure supports the 2032 Olympics, the property industry, jobs and most importantly, our economy.