The Research Insights Archives | Blue Wealth Property

Low sales volumes and buyer’s markets during COVID-19

7 April 2020Luke 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.

COVID-19 lockdown: from crisis comes opportunity

31 March 2020Luke 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 According to Domain, there were 500 withdrawn Sydney auctions, and 352 resulting in a sale.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.

Safe as houses: why real estate holds true during economic uncertainty

24 March 2020Luke 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.

Strong rental yields accompanied by tightened housing supply

17 March 202017 March 2020Luke 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.

Perspective: how the coronavirus is and isn’t impacting real estate

10 March 2020Luke 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…

What a population of 15 million would mean for Melbourne housing

3 March 2020Luke 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.

Growth in new home loans indicates property upswing is underway

25 February 2020Luke 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.

Don’t abandon research in face of next property boom

18 February 2020Luke GrahamLeave a comment

Last month, we reported on the strong auction clearance rates experienced by Sydney in the new year. In the short time since, Sydney’s auction clearance rate has climbed by more than 10 percent. Domain has reported an 84% clearance rate from last weekend, up from just 57% at the same time last year. This significant transformation cannot be understated.

Melbourne’s Renaissance: the making of a global powerhouse

11 February 202021 February 2020Luke GrahamLeave a comment

In the mid-19th century, gold was discovered in what is now known as the Victorian goldfields. In the coming years, the young British colony at the bottom of the world would endure its infamous gold rush. This would leave a lasting legacy on Australia’s national identity, including events such as Melbourne’s rise to rival Sydney as a commercial powerhouse, as well as the Eureka Stockade. During this era, Melbourne was rumoured to be the world’s wealthiest city, overtaking established behemoth cities such as London, New York and Paris. The indulgent architecture of the City of Melbourne is one of the few remaining visible relics of this time.

Are you a real investor or a pretender?

3 February 2020Luke GrahamLeave a comment

There are a whole lot of property investors in Australia. Almost 2 million, actually. But among those property investors and many others to come, there is a divide between the real and the pretend.

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