A decade on!

This weekend we’ve celebrated a significant milestone. Our business marks its tenth anniversary and it’s a wonderful chance to reflect on the privilege we’ve shared, working as trusted advisors with our clients on many, many special journeys.

We had a great chance to bond together in Port Douglas and welcome Pip into the crew. Renee, (who has been a treasured part of Cate Bakos Property for eight years) coordinated an impressive itinerary and we all enjoyed a bit of warm weather.

Back in 2014 our team helped 56 clients on their purchasing journeys. Some of our special assignments come to mind and we reflect on the value growth over the decade.

Ten years in business is no mean feat, and it wouldn’t be possible without our valued clients and some incredible people who work, (and have worked) in our team.

According to Lawpath, “60% of businesses in Australia will fail within their first three years of operation, with 20% of businesses failing in their first year of operating.”

This walk down memory lane extends to some of the acquisitions we helped clients with in 2014. The retrospective also considers capital growth across a variety of dwelling types and locations.

Over the past ten years, we have proudly assisted many clients on their journey and it is interesting to look over the data to spot some trends and identify our business activity.

Our owner-occupier versus investment split has varied over the years. The credit restrictions from 2016 to 2019 certainly gripped and our home-buying activity as a percentage strengthened during this period.

While this chart clearly correlates with capital growth activity in our second largest national capital.

This chart shows our metro Melbourne, Ballarat and Geelong acquisition activity.

Circling in on some of our 2014 purchases is interesting. This house in Ballarat’s Wendouree was secured for $260,000 and later sold by our investor clients in 2020 for $365,000; delivering a modest 6% capital growth year on year. Over this time, the property delivered close to a 5% gross rental return too.

At the other end of the spectrum, this incredible character home in Moonee Ponds was acquired for $1.5M in 2014. Our clients lovingly renovated it and it later transacted for $3.65M in April 2021. The mere idea of purchasing a house of this calibre for $1.5M is hard to fathom, and it illustrates the power of capital growth in blue chip locations superbly.

This modern townhouse in Seddon was purchased new in 2014, delivering some decent growth and rental yield returns including high depreciation benefits for our clients. The neighbouring identical townhouse sold for $1.015M in 2020, marking a 6% year on year return for our investors.

A villa unit purchase of $415,000 in 2014 was aimed at a combination of both capital growth and yield, and it’s fair to say that a 7% year on year capital growth rate is impressive for a unit. A similar property in the same block sold for $615,000 in 2021.

However, the memorable auction in Patterson Lakes for a canal fronting property in 2014 serves to demonstrate the power of scarcity. At the time, our client’s winning bid was close to their budget limit, and the auction was highly fuelled and fierce. But it is these scarce diamonds that draw a crowd, again and again. At the time, the price tag of $1.063M reflected a highly competitive result, but a recent sale for a comparable property at $2.35M suggests the year on year capital growth has been in excess of 8%.

Many results are still remarkable despite the fact that we’ve had some tough headwinds during this past decade in Victoria, and in particular in Melbourne. The chart below shows the depth and length of our various downturns, yet ten years is relatively short for holding property.

One can only wonder what another ten years will deliver for property performance.