Here’s what’s happening behind the headlines
In this special episode, Phil Tarrant and Maja Garaca Djurdjevic reflect on some of the most-searched stories over the p...
Continuing our holiday listicles, we now take a look at the top 10 articles on the Smart Property Investment platform in 2020.
2020 was a big year for property investors Australia-wide, and before they put pen to paper, many took to Smart Property Investment to inform their decisions.
Let’s take a quick browse through the top 10 most sought-out articles on SPI over the last 12 months.
“As a result of the COVID-19 pandemic, market-leading service Airbnb has been declared illegal in NSW.”
Our top story for 2020 was unsurprisingly COVID-related.
Under new regulations, Airbnb and other short-stay accommodation options were declared illegal for the time being in April, with the government reminding residents to stay home.
The new coronavirus regulations made it clear at the time that no one should be staying anywhere other than their own permanent home.
“There are 10 locations where investors are better off holding onto their properties rather than rushing to sell,” a real estate expert told us in January.
Kevin Young, president of Property Club, said property investors in certain suburbs who hold onto their properties, rather than sell, during 2020 will be the long-term winners in the Australian real estate market.
“Sellers’ regret is a common issue I have come across in the property market during the past 50 years, with property owners regretting selling their properties too early ahead of a major bounce in their local real estate market,” he said at the time.
Amid unprecedented economic uncertainty in July, Aaron Christie-David discussed housing prices and tried to predict their movement for the remainder of the year.
Predictions from the banks and industry varied widely at the time, with the Commonwealth Bank’s worst-case scenario pointing to a significant drop in house prices by almost a third by the end of 2022.
NAB’s worst-case scenario similarly predicted a 30 per cent drop by 2021, while Westpac’s base case scenario anticipates a 15 per cent fall in house prices in 2020 and a further 5 per cent fall in 2021.
Thankfully, for property buyers, a lot of these scenarios have now been reversed and the sun seems to be back and shining on the property market.
In April, Prime Minister Scott Morrison revealed that the national cabinet had reached agreement on a mandatory code for the provision of rent relief by commercial landlords to tenants.
Mr Morrison said the mandatory code would be legislated and regulated as appropriate in each state and territory jurisdiction, and will apply to tenancies where the tenant or landlord is eligible for the JobKeeper program and where they have a turnover of $50 million or less.
“A radical plan to kickstart economic recovery post-COVID-19 could see Australians handed $50,000 for buying a new home,” a headline read in May.
This was in fact just one element of a seven-point plan put forward by the Property Council to stimulate construction, grow skills, attract investment and boost confidence across the property industry.
Considering it a “demand stimulus” to kickstart construction and the economy, the Property Council said at the time that it believes such a scheme could stimulate the building of 50,000 new dwellings, support more than 200,000 jobs and bring forward market demand for new housing.
A couple of months later, the government announced its HomeBuilder plan, providing eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020.
The scheme was then extended in November until March next year due to its widespread popularity.
Australia’s leading real estate identity, John McGrath, pinpointed in November the suburbs he believes will boom in a post-coronavirus world.
In their latest 52-page report, titles Has COVID-19 changed real estate forever?, Mr McGrath’s eponymous real estate agency explores with great detail and insight how the wants and needs of buyers and sellers have transformed irrevocably during the pandemic.
“There’s zero doubt that the pandemic will cause sectors of the population to adjust their way of thinking and behaviour forever,” Mr McGrath writes in the introduction to the report.
Each month on a Tuesday, punters had an eagle eye on the Reserve Bank of Australia in anticipation of its latest cash rate call.
And in May, the country stood still as the the bank decided whether to hold the record-low 0.25 per cent rate or cut it further to cushion the fallout from COVID-19.
But the central bank acted as most economists predicted, holding the cash rate, having previously stated it was the lower bound for Australian rates.
Laing+Simmons managing director Leanne Pilkington said at the time that the central bank had already done its part in supporting the economy.
“The Reserve Bank governor recently challenged the government to focus on growth and productivity strategies to help the economy eventually emerge from the COVID-19 crisis. More efficient taxation solutions, including the removal of stamp duty, is an obvious place to start. Interest rates are already rock bottom, and on this score the RBA has done its part.”
In August, property investors were being urged to study the fundamentals, as data suggested that low vacancy rates and inventory can still lead to portfolio growth in a COVID-19 world.
Analysis exclusively done for Smart Property Investment by InvestorKit director Arjun Paliwal showed at the time that Australia was experiencing a property shortage.
“To the surprise of many, many suburbs across Australia are actually going through high levels of rental and price competition with low inventory levels and below 1.5 per cent vacancy rates,” Mr Paliwal said.
In this property update, we asked the question how will the NSW capital fare for the remaining months of 2020?
Over May and June, home values had seen a “mild” downward pressure with capital city dwelling values falling a cumulative 1.3 per cent.
However, Macquarie University business analytics professor Stefan Trueck said that properties sold, on average, 8 per cent below their valuation in May 2020 alone.
“It is likely that Sydney house prices have already dropped more substantially than the public has been led to believe. Vendors and real estate agents have significantly reduced the reporting of sales results for houses and apartments in many suburbs," Mr Trueck predicted at the time.
This article from February, pre-crisis, shared insights from OpenAgent.com.au, which at the time found that suburbs near the Brisbane city centre were boasting rental yields over 5.6 per cent.