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SQM Research Newsletter - Tuesday 28 May 2019
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Property Valuations
Research Reports
Distressed Properties Report
Funds Research
Boom and Bust 2019 Report

Black Dragon's
Words for the Week

“Just cause you got the monkey off your back doesn't mean the circus has left town.” 

George Carlin
US comic and author

Real Estate Realities 

Brisbane, Sydney, Melbourne and Perth make Knight Frank Prime Global Cities Index

Four Australian capital cities have ranked in the top 23 globally for luxury residential price growth, according to Knight Frank.

The Knight Frank Prime Global Cities Index tracks the movement in prime residential prices (the top 5% of the housing market in most cities, by value) across 45 cities worldwide, with the Q1 2019 report listing Brisbane as 14th for luxury price growth, followed by Sydney (18), Melbourne (22) and Perth (23).

The overall index increased by 1.3% in the year to Q1 2019, its lowest average annual rate of growth since Q4 2009, and down from 1.8% in the previous quarter.

Knight Frank Prime Global Cities Index – Q1 2019 - At a glance:

  • Four Australian cities rank in the top 23 globally for luxury residential price growth.
  • Brisbane ranks 14th (3.2% annual growth), Sydney ranks 18th (2.4%), Melbourne ranks 22nd (1.8%) and Perth ranks 23rd (1.8%).
  • The Australian cities all recorded growth higher than the average annual prime price growth of 1.3% across 45 cities globally.

Read More...

DISTRESSED PROPERTY OF THE WEEK

Unit 1015 / 675 La Trobe St, Docklands VIC 3008

This week's distressed property is a newly renovated two-bedroom apartment on the 10th floor of the near new Lacrosse development at Melbourne’s Docklands, a prime riverside location.  
 
Located at the extended end of La Trobe Street, it is only a short walk to Melbourne’s CBD, Etihad Stadium, Southern Cross Station, a variety of restaurants and bars and all that the Dockland's precinct has to offer.
 
The apartment is well-presented, offering an open plan kitchen/dining and living room with modern interior and integrated appliances and split system air conditioning. The bedrooms have built-in wardrobes and there is a central bathroom.
 
The complex has 24-hour security and resort style facilities. You can start your day with a swim in the outdoor lap pool with city skyline views, work up a sweat in the onsite gym, and entertain visiting friends and family on the rooftop terrace.
 
According to SQM’s
Distressed Property report, the apartment has been on sale since 2016 with a price tag of $530,000.  It is now selling for $485,000.  Not a bad price given that currently you would expect to pay between $565,000 to $645,000 for an apartment in this postcode.
 

Asking prices for all apartments in postcode 3008 has increased 5.5% over 3 years and despite a cooling Melbourne market, over the last month there has been a small 1.1% growth for all apartments in the area.  In comparison, Melbourne region’s apartment market has fallen 0.6% over the month.
 

Weekly Asking rents for 2-bedroom apartments in the area has increased over the quarter by 1.2% but has slipped over the month by 4.1%.  You can expect weekly rents of $646 to $678 per week for apartments in this postcode.  Vacancy rates sits at 3.0% and since April there have been 287 apartments listed for sale in the area.  You can achieve a healthy gross rental yield of 5.46% for apartments in this area.
 
The
postcode has a high 65% of renters as previously many of the new apartments had been geared towards investors, but now with major banks, tech and media companies making Docklands their home over the past 10 years, it has meant more professional couples are buying into the area, looking for an inner-city life close to work. 
 
The recent slowdown in apartment construction in Melbourne means the market is not significantly over-supplied and together with the city’s exceptional population growth, the area could see further modest price growth. 
 
With the recent Liberal party election win, APRA’s loosening of lending rules and talk of interest rate cuts, this could lead to improved confidence amongst buyers.
 
"Before the election, it was clear buyers were sitting on their hands. With the election we were predicting a return of confidence if the Coalition was re-elected, so the combination of these other factors has been a boost to forecasts," said SQM Research CEO Louis Christopher.
 
With looming changes, keep monitoring this market and other areas by accessing
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: 28 May 2019 Asking Price Chg on
prev wk
Rolling mth
% chg
12 mth
% chg
Sydney All Houses 1,219.7 1.8  -0.8%  -10.5% 
All Units 683.0 0.7  -0.5%  -6.0% 
Melbourne All Houses 932.6 -0.1  -0.5%  -7.1% 
All Units 540.5 -0.1  -0.6%  0.0% 
Brisbane All Houses 617.8 -0.9  0.2%  1.0% 
All Units 371.5 -0.3  -0.2%  -2.6% 
Perth All Houses 657.2 -3.6  -1.6%  -3.9% 
All Units 384.2 -0.2  0.2%  -4.0% 
Adelaide All Houses 513.2 0.0  0.2%  -0.0% 
All Units 301.6 0.8  0.4%  -0.9% 
Canberra All Houses 810.0 2.0  -1.1%  2.5% 
All Units 429.0 2.1  1.8%  3.5% 
Darwin All Houses 592.4 1.3  1.3%  -0.4% 
All Units 357.0 -0.2  -1.5%  -5.5% 
Hobart All Houses 517.1 0.5  0.4%  8.8% 
All Units 301.3 -0.9  -1.0%  -1.1% 
National All Houses 567.7 1.2  0.1%  -0.4% 
All Units 375.4 0.4  -0.4%  0.7% 
Cap City Average All Houses 903.7 1.7  -0.6%  -7.4% 
All Units 558.7 1.0  -0.2%  -3.7% 
Next update: 4 Jun 2019
 
SQM Research Weekly Rents Index
Week ending: 28 May 2019 Rent Chg on
prev wk
Rolling mth
% chg
12 mth
% chg
Sydney All Houses 690.8 0.2  -0.2%  -4.2% 
All Units 504.0 -1.0  -0.3%  -4.1% 
Melbourne All Houses 540.1 -2.1  -1.0%  1.8% 
All Units 423.9 0.1  0.5%  3.4% 
Brisbane All Houses 458.9 0.1  0.2%  2.6% 
All Units 371.3 -0.3  -0.1%  0.8% 
Perth All Houses 449.5 0.5  0.8%  6.9% 
All Units 336.8 -0.8  -0.0%  3.9% 
Adelaide All Houses 393.1 0.9  0.5%  3.4% 
All Units 304.0 0.0  0.8%  1.6% 
Canberra All Houses 622.8 -1.8  -1.3%  -0.8% 
All Units 460.5 2.5  0.7%  2.4% 
Darwin All Houses 496.7 -4.7  -0.2%  -6.4% 
All Units 372.7 2.3  -0.2%  -7.3% 
Hobart All Houses 426.5 -3.5  0.0%  9.0% 
All Units 389.5 -1.5  6.0%  11.6% 
National All Houses 439.0 0.0 -0.7%  0.9% 
All Units 368.0 1.0  0.0% 2.2% 
Cap City Average All Houses 553.0 -2.0  -0.2%  0.0%
All Units 441.0 -1.0  0.0% -1.1% 
Next update: 4 Jun 2019
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