Dr Tony Hayek1 Comment on Tony’s thoughts on what will happen to the property market during and after COVID-19
In the past few weeks, I’ve been asked many times what I believe will happen to the property market as a result of the impact of COVID-19. This is a summary of my thoughts.
Matthew AnschauLeave a comment
When looking at the Australian economy as a whole, we tend to think of it as a diversified market, providing many opportunities for those wanting to do business within our borders. Australia is considered to be the world’s 14th largest economy, boasting AAA ratings from international rating agencies. The economy is deemed to be very robust and low risk, with technology and financial services at the heart of Australia’s economic growth. Nevertheless, there are limitations to looking at the Australian economy as a whole. Instead, it should be assessed just as we assess the national property market — made up of many different submarkets. Some offer conditions of diversity and lower volatility. Others don’t.
Luke GrahamLeave a comment
Hibernation, a phrase adopted by the Morrison government to communicate the temporary nature of the COVID-19 fallout, is showing more signs of arrival in the property market. Since property data is typically delayed by weeks and even months, the country is not yet officially aware of how much sales volumes have decreased. What we do know, however, is that the number of comparative market analyses being generated on the CoreLogic platform is reducing. This suggests that listing activity among real estate agents is falling, an anticipated impact of COVID-19 that we discussed in last week’s research blog.
Luke GrahamLeave a comment
Over the last few weeks, there has been a flurry of commentary on the impact of lower auction clearance rates, highly motivated vendors trying to “get out” before greater restrictions are enforced, as well as a number of vendors doing the opposite: withdrawing their listings until things go back to something that resembles normal. In this week’s research blog, we are going to look at what happens in a property market when sales volumes decrease.
Luke GrahamLeave a comment
Our weekly research blog feels like barely enough to keep up to date with the constant flurry of information and speculation regarding COVID-19. Last weekend, the first auctions were conducted since restrictions on public gatherings were tightened. According to Domain, there were 500 withdrawn Sydney auctions, and 352 resulting in a sale. The clearance rate? Estimated to be around 37 percent, down from 77 percent a month earlier. But amid this less-than-exciting data one would expect from a lockdown are some exciting new developments that are reshaping how real estate professionals and investors do business.
Luke GrahamLeave a comment
There’s no way to sugar coat things: our economy is experiencing a biological shakedown. In response, the RBA convened a special meeting last week to decrease the cash rate target again. They have now trimmed 75 basis points from the cash rate this year – the same amount trimmed last year. That puts us at an all-new record low of 0.25 percent. By comparison, the United States is also at 0.25 percent, United Kingdom 0.1 percent and Canada 0.75 percent. More heavily reported on is the downward trajectory of financial markets, which have lost trillions since the international outbreak of COVID-19. The ASX200, an index representing the bulk of Australian listed shares, has dropped by more than a third in the space of a month.
Luke GrahamLeave a comment
When Blue Wealth Property considered entering the Melbourne market in 2014, the research team was briefed on two challenges Melbourne faced with regards to our research model. First, rental yields were notoriously low which could have a negative impact on cash flow ratings. Second, the internal size of newly constructed homes was tiny. In some cases, inner-city property developers were attempting to create a two-bedroom apartment from the space usually set aside for a one-bedroom apartment elsewhere in the country. Alas, we were fortunate to find areas and vendors in this market that were aligned with our stringent criteria.
Luke GrahamLeave a comment
Over recent weeks, our attention has been drawn to the latest global health crisis. Millions of Italians are in lockdown, east Asians are being assaulted in London, countries are closing their borders, and Australians… have run out of toilet paper…
Luke GrahamLeave a comment
In 1981, a cosy 3 bed, 2 bath brick home was sold in Melbourne’s north-west for $65,000. 1981 was a census year, and the national population reported at the time was just under 14.6 million. The same year, the Australian Bureau of Statistics (ABS) estimated our population would increase to somewhere between 22.1 million and 26 million by the year 2021. With hindsight, we know the lower estimate was surpassed around a decade early. The next two higher projections of 23.3 and 24.7 million were surpassed in 2014 and 2017 respectively. Even the highest estimate from the time, which was cast aside in later projections, will be reached a year early in 2020.
Luke GrahamLeave a comment
Last week, the Australian Bureau of Statistics (ABS) released updated figures of monthly new housing loan commitments. Figures have continued to trend upward since a six-year low was reached in January 2019. Over the course of 2019, occurrences such as a federal election upset, reserve bank rate cuts and revised regulatory conditions have markedly improved property market sentiment in many parts of Australia. The amount of money borrowed for new home loans in December 2019 was resultantly 49 percent higher than the January 2019 trough.
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