February 17, 2021
The first COVID-19 vaccine has now started to roll out in Australia with more than 1.4 million doses arriving during the past week.
Leading by example, Prime Minister Scott Morrison has already had his. Whether or not people choose to be vaccinated, we bet it’s going to be good for the collective positive sentiment of Australians.
Confidence in the property market remains solid and we were amazed with Melbourne’s ability to keep going and quickly pivot into lockdown auction mode over the weekend of 13-14 February after a COVID-19 outbreak in that city.
With just 24 hours’ notice, all real estate agencies in Melbourne had to move to online auctions. Despite this they still managed to hold 467 of 688 scheduled auctions, posting an incredibly impressive 87.8% preliminary clearance rate.
With lockdown potentially being a go-to for different states with COVID-19 outbreaks in the future, this should provide anyone seeking to sell their home with a great deal of confidence that the show will go in regardless… Go, Melbourne!
An article about the Sydney market caught our eye this week which revealed a couple were making $600 a day by renting out their home on Airbnb.
Turns out Graeme and Naomi from Bar Point in NSW (roughly 53km from Sydney) have split their home into two areas – one part for them to live in and the other part to list on Airbnb.
The engaged couple have been earning between $400 and $600 a night during the summer – slightly more than the off-season price of $300 a night they began with – and the extra money will help pay off their mortgage and cover the cost of their upcoming wedding.
So, is Airbnb really that lucrative?
We’ve crunched the numbers to find out.
The couple paid $711,000 for their four-bedroom property in March 2020.
It appears they have done a mini renovation and live on the upper level, while their Airbnb guests have full privacy in the downstairs part of the home, which has a separate entrance along with three bedrooms, a kitchen with cooking appliances, bathroom, living and dining areas and deck complete with barbecue and outdoor furniture.
Assuming the couple borrowed 90% and their interest cost is 3% p.a., they will be paying around $20,000 a year in interest on their loan.
If they rent the property for weekends only and receive $400 a night for 20 weeks of the year and $250 per night for 24 weeks of the year (let’s assume they’ve given the journalist the higher end of what they are receiving)… they will receive $28,000 in rent. Not a bad result.
They’re effectively getting their interest paid and $8,000 to be used to help pay down their home loan.
Alex, who previously ran a side hustle running six Airbnbs in Melbourne, did warn there were other things to consider. Like having to clean all the toilets, be around for the guests’ check in and check out, and the added implications around tax deductibility, stamp duty, capital gains tax and potentially even GST if you’re turning over more than $75,000 p.a.
Having said that, we do think it would be work in some parts of Australia for those creative enough to give it a go.
In other news, the Federal Government HomeBuilder grant is running full steam ahead to its end date of March 31. It received 75,000 applications between June and December 2020 with about 35,000 of those applications in December alone!
There were another 7,000 applications in January with total HomeBuilder applications now nudging 82,000. Victoria still tops the charts with 23,331 applications followed by Queensland with 18,124 applications and New South Wales with 14,495 applications. Watch this space, particularly in the lead up to the next cut off in March.
We’ve been calling a baby boom to be one of the products of COVID-19 and finally it has begun. Adelaide has kicked us off with the total number of births in South Australia during December 2020 up 40% on December 2019. Technically, a national emergency was declared on 18 March 2020 which would make 23 December exactly 40 weeks from that day. Maybe it’s a coincidence, but those folks in Adelaide didn’t mess about wasting any time!
In all seriousness, it is a number we’ll monitor this year because with limited overseas migration, the cities that grow will do so as a result of natural increase (births over deaths) and net interstate migration. Why are we so interested in population growth? Because a growing population leads to a growing demand for property.
Interested in knowing more? Check out the weekly podcast we do at The Double Shot Podcast.