Adrian Bo here. Now, today I’m gonna talk about the overall economic outlook and how it pertains to the housing market in Sydney and particularly here in the Eastern Suburbs, where I’ve been auctioning and selling for the last 30 years, including some recent examples of incredible capital gains that have been achieved. Now, the economy is facing some very interesting times into the new year. Let’s hope Victoria can pull themselves out of the current challenge they’re in and small businesses can start to trade fluently again across the country. Now, on the back of the RBA Melbourne Cup day interest cut, Commonwealth Bank have launched a four-year fixed mortgage rate of 1.99% on the back of the RBA’s assertion that base rates will remain the same for three years after their latest cut. Now, Westpac and NAB have followed suit, ANZ deciding to reduce their one, two and three year fixed rates to 2.09%, as well as target new vehicle and equipment loans with a 2.85% deal backed by the Government guarantee. Interestingly enough, all the Big Four have left variable rates untouched, basically incentivizing everyone to move towards fixed rates.

Beyond that Josh Frydenberg, our treasurer, has removed restrictive lending rules with the banks, giving people easier access to credit. This may cause a problem further down the road but for now it will certainly pump some liquidity and activity into the development sector as well as the general housing market. Again, the key issue is will this injection be able to counter the unemployment growth? Now, here in New South Wales the unemployment currently sits at 7.2% according to the Australian Bureau of Statistics. As far as Sydney is concerned, the Western suburbs have been really badly hit. For example, Baulkham Hills has 1,300% more unemployment since the pandemic started, Pittwater, for example, has had 1,100% increase, Chatswood has had an 800% increase and Cronulla a 700% increase in unemployment since the pandemic hit. These are huge numbers, and are going to impact the housing markets in these areas. Many young people leaving university today are gonna face some very bleak employment prospects. Now, jobseeker is clearly clouding unemployment numbers and we can only hope that the economy as a whole will improve as Jobkeeper peels back, the Jobmaker hiring credit should help that but the sheer weight of numbers will be difficult to deal with. Meanwhile, the Eastern suburbs of Sydney appear to be going okay, house prices are moving forward, historically low interest rates of 0.1% and the homebuilder grant, which has already triggered record demand for subdivisions and quadrupled land sales is expected to be extended.

Small developers have never had such a strong opportunity to make money, current low interest rates are likely to be around for the foreseeable future. I recently sold 9 Woodland Street, for example, in Coogee. Now, that was a record price at 3.567 million. I previously sold that back in May, 2011, for 1.820 million. Now that’s a capital gain of 96% over a nine-year period. Incredible growth! In Maroubra I recently sold 73 Torrington Road for 2.970 million. Now, I previously sold that in April 2013 for 1.53 million. Now, that’s a capital gain again just under a 100%, being 94% over a seven-year period. Huge growth! I recently sold In Randwick a garden apartment, being number 4107, in the Centennial building near Centennial Park for 1.25 Million. It had previously sold for 910 in 2016, and 593 in 2008, realising a capital gain of 37% over four years and 111% over 12 years. What an incredible investment bricks and mortar are in the Eastern Suburbs in terms of capital growth and also yield. Now, last weekend I sold unit six at 67A Bream Street in Coogee for 900,000, it had previously sold for 630,000 in 2013, and 465,000 in 2008, now, that’s a capital gain of 43% and 94% respectively over seven and 12 years respectively. Now, I really hope you’ve enjoyed these anecdotes of capital growth and my overall holistic outlook on the property market. I hope this has been of interest. I hope you enjoy the wonderful spring weather and always remember: your home is worth more with Adrian Bo.