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SQM Research Newsletter - Tuesday 23 July 2019
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Property Valuations
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Boom and Bust 2019 Report

Black Dragon's
Words for the Week

"Progress is impossible without change, and those who cannot change their minds cannot change anything."

George Bernard Shaw
Real Estate Realities 

All cashed up but nowhere to live – renters squeezed by Dublin’s housing supply crisis

A storm has been brewing for Dublin’s property market, with rentals rapidly becoming among the most sought after and unaffordable in the world.

The Irish capital has been expanding its reputation as a financial city thanks to low corporate tax rates, the recovery of its economy known as “the Celtic Phoenix” and its comparative stability in Europe following the fallout of Brexit.

But underneath that, homelessness, property costs, and the number of Airbnb listings have all sharply increased over the past five years, while home ownership has taken a dive and the number of new dwellings built has failed to offset demand.

The average monthly cost of renting in Dublin has reached over €2000 ($3262), far higher than the cost in Sydney of $2120, the most expensive Australian city according to Domain’s most recent house price report

The average income in Ireland is €45,611 ($74,405) while in Australia it’s $86,642 (both figures pre-tax) which means Dubliners are paying far more but earning lower incomes, which creates immense stress and forces people to put big life-changes on hold.

The problem is largely one of supply and demand; The latest quarterly report from Daft.ie found there were just 1200 homes available to rent in Dublin on May 1 – the lowest recorded since records began in 2006.

This chronic shortage of housing can be traced back to the country’s 2008 economic crash, which led to a construction industry collapse and the building of new dwellings grinding to a near complete halt.

Read More...

DISTRESSED PROPERTY OF THE WEEK

Unit 2004 / 16 Hamilton Place, Bowen Hills, QLD 4006

This 2 bedroom, 1 bathroom unit with 1 parking space in the Chelsea Apartments in Bowen Hills, Queensland is on sale at $299,000 - $190,500 less than is last sold price of $489,500 in March 2011.  The sale is a Mortgagee Exercising its Power of Sale.  The property was passed-in at auction on 7 June 2019.
 
Located in an inner-city area (approx. 3.5km from Brisbane CBD), the building is walking distance from the Bowen Hills café district, Queensland University of Technology, Royal Brisbane & Women’s Hospital, the RNA show grounds, Exhibition and Bowen Hills train stations and less than 1km to the Fortitude Valley entertainment, restaurant and shopping precinct. 
 
The apartment is a low maintenance, ground floor unit with 2 bedrooms, single bathroom, internal laundry with dryer, modern kitchen, ducted air-con, a combined lounge/dining area and its own private tiled courtyard.  It has a floor space of 74sqm and land size of 88 sqm.
 
Built in 2012, the Chelsea Apartments is a 13-story residential development that features 2 sky terraces (private resident areas with city views), pool, gymnasium and BBQ area. Body corporate fees are approx. $5,157.94 per annum. 
 
This apartment would suit couples looking to enjoy inner-city apartment living.  Households in Bowen Hills are primarily childless couples and 80% of occupants are renters. Annualised
population change has seen an increase of 2% in 2016.
 
Investors can take advantage of the healthy 5.2%
gross rental yield for apartments in this postcode. Asking rents for apartments range from $435 to $500 per week in this area. However, over the last month, rents have decreased by 2.2%, after a 12 month decrease of 0.1%.
 
The
vacancy rate for postcode 4006 is a little high at 4.1% but has decreased from 6.0% this time last year.  As of June 2019, there were 390 properties listed for sale in this postcode – 328 units and 62 houses.  The count of established units in this area was 7,731 in this postcode in 2016.
 
Current
Asking Prices for apartments in postcode 4006 ranges from $437,000 to $500,000 and has increased 1.0% over the last 12 months after a decrease of 3.2% over 12 months.  With less building approvals for houses and apartments and an increasing population, the value of Brisbane apartments could continue to increase in price.

 
As mentioned, this is a Mortgagee in Possession sale, and at an asking price of $299,000, this apartment does seem like a good bargain but don’t get carried away by the potential discount you may receive, you still need to ensure that you carry out due diligence when undertaking your research.  Check the sale/purchase agreement, undertake building reports and keep monitoring
 this market’s growth at SQM Research’s free property data at SQM’s website. Also consider the Property Valuation product for more in-depth data and property price estimator.
 

SQM RATINGS NEWSLETTER

Did you know that SQM Research doesn’t only provide residential property data, we also provide research on all asset classes.  We have data and analytics on over 10,000 funds in Australia.  To find out more and to subscribe to our Fund Data tool click here.

If you would like to subscribe to our Ratings Newsletter, click here.  The newsletter provides regular updates on all funds including ratings changes and media releases, and valuable Insights into the point of view of our analysts on a variety of ratings research related topics.  And it’s completely free!
 

SQM RESEARCH HOUSING INDEXES
 
SQM Research Weekly Asking Prices Index
Week ending: 23 Jul 2019 Asking Price Chg on
prev wk
Rolling month
% chg
12 month
% chg
Sydney All Houses 1,232.3 -1.8  -0.3%  -8.4% 
All Units 698.5 1.5  1.2%  -3.7% 
Melbourne All Houses 934.4 -0.5  -0.2%  -5.1% 
All Units 539.6 0.9  -0.2%  -1.4% 
Brisbane All Houses 616.7 -0.8  -0.1%  -0.2% 
All Units 372.2 -0.1  -0.0%  -2.3% 
Perth All Houses 654.7 -1.5  -0.5%  -1.7% 
All Units 384.0 -0.4  -0.4%  -2.7% 
Adelaide All Houses 515.4 0.9  0.3%  2.2% 
All Units 299.6 -0.2  -0.9%  -0.4% 
Canberra All Houses 795.2 1.0  -0.2%  -2.4% 
All Units 432.9 1.0  0.2%  6.3% 
Darwin All Houses 591.0 6.8  1.4%  0.1% 
All Units 355.8 -0.0  0.0%  -4.8% 
Hobart All Houses 515.5 -1.9  -0.6%  4.9% 
All Units 308.6 2.9  1.1%  1.8% 
National All Houses 566.3 -3.3  -0.2%  -0.6% 
All Units 376.7 0.3  0.3%  0.6% 
Cap City Average All Houses 906.6 -3.2  -0.5%  -5.5% 
All Units 566.1 0.4  0.6%  -2.6% 
Next update: 30 Jul 2019
 
SQM Research Weekly Rents Index
Week ending: 20 Jul 2019 Rent Chg on
prev wk
Rolling month
% chg
12 month
% chg
Sydney All Houses 685.0 -1.0  -0.4%  -3.3% 
All Units 501.3 -0.3  -0.2%  -3.7% 
Melbourne All Houses 530.0 -5.0  -1.8%  1.5% 
All Units 422.6 -0.6  -0.3%  2.8% 
Brisbane All Houses 463.2 -1.2  0.7%  2.4% 
All Units 374.8 0.2  0.3%  1.4% 
Perth All Houses 430.9 -4.9  -3.4%  1.4% 
All Units 340.7 1.3  1.2%  4.5% 
Adelaide All Houses 399.0 -1.0  0.4%  4.0% 
All Units 310.9 1.1  0.4%  3.9% 
Canberra All Houses 619.0 -5.0  -0.5%  -1.9% 
All Units 460.8 -0.8  -0.3%  5.1% 
Darwin All Houses 525.4 -2.4  0.6%  -2.0% 
All Units 370.7 1.3  0.3%  -8.5% 
Hobart All Houses 453.3 2.7  3.4%  14.2% 
All Units 403.9 -3.9  5.6%  14.1% 
National All Houses 438.0 -4.0  -0.9%  1.6% 
All Units 370.0 2.0  0.8%  4.8% 
Cap City Average All Houses 545.0 -6.0  -1.3%  -0.7% 
All Units 441.0 0.0 0.0% -0.5% 
Next update: 28 Jul 2019
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