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SQM Research Newsletter - Tuesday 4 June 2019
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Black Dragon's
Words for the Week

"A government which robs Peter to pay Paul can always depend on the support of Paul."

George Bernard Shaw

Real Estate Realities 

How cross-laminated timber could change how Australian homes are built

The way Australian homes are built could be changed forever, with new research into a type of engineered timber showing it could cement its place as an environmentally friendly alternative to concrete.

Australian cross-laminated timber, or CLT, can replace concrete in many situations, including being used as a foundation for a house.

Studies have already been conducted on European CLT, which is being used in towers and building extensions in Australia now. But local CLT is different because the composition of the wood differs here.

Associate Professor at Deakin University Mahmud Ashraf said CLT was being manufactured in Australia for the first time, and the new research he was undertaking was needed to determine its exact strength.

“The funny thing is, even though it’s called CLT, the properties vary greatly depending on the type of timber you use,” he said. “Australian timbers are a little bit harder than the European ones. We expect that it will give us a bit more strength than European strength.”

Read More...

National Property listings Increased in May

by Louis Christopher, CEO, SQM Research

Figures released today by SQM Research reveal national residential listings increased by 4.0% in May 2019 to 345,516 from 332,236 in April 2019. A year-on-year comparison shows listings up by 6.2%.

All states experienced an increase in property sales listings over the month, with Hobart experiencing the highest increase at 7.1%, followed by Adelaide at 6.4% and Canberra 5.6%.  

Perth recorded the lowest increase at 3.9% with Darwin not far behind at 4.0%.  Darwin was the only state to record a year-on-year decline of 1.5%.

The modest monthly increases does not compare to the huge year-on-year increases of 25.0% in Canberra, 21.1% in Melbourne and 15.5% in Hobart.

Year-on-year Sydney managed a 0.7% increase in listings whilst Perth increased from 1.9% to 3.9%.



We were expecting a rise in listings for the month of May given the low numbers recorded in April which was affected by the Federal Election. May’s counts suggest listings remained elevated for most capital cities, suggesting the month remained largely a buyers’ market. This view is confirmed by the simultaneous fall in asking prices over the same month.

Asking Prices

Capital City house asking prices decreased marginally by 0.6% and 0.2% for units, for the month to 28 May 2019.  Unit asking prices are now $558,700 and houses $903,700.  Compared to a year ago, the capital city asking prices posted larger declines of 7.4% for houses and 3.7% for units.

Adelaide was the only capital city to record increases over the month in both houses and units at 0.2% and 0.4% respectively.
 
Sydney continues its decline in house prices with a 0.8% decrease and 0.5% for units over the month.  A house in Sydney is now $1,219,700 and a unit is $683,000.  Sydney’s 12 month decline is now 10.5% for houses and 6.0% for units.

Melbourne’s house and unit prices also continued to decline over the month at 0.5% and 0.6% respectively.

Darwin, Hobart and Brisbane’s house prices increased marginally over the month at 1.3%, 0.4% and 0.2% respectively. However, unit prices declined in Darwin by 1.5%, by 1.0% in Hobart and 0.2% in Brisbane over the month.

 

 
DISTRESSED PROPERTY OF THE WEEK

18 Callas Street, Dromana VIC 3936

On sale since October 2018, is this 4-bedroom, 1 bathroom home sitting on 603 sqm of flat coastal land in Dromana, approximately 70km south of Melbourne CBD, in the Mornington Peninsula shire.

Sitting on two levels, the first floor offers open plan kitchen and dining with large windows, a sizeable living area with neutral tiles and plenty of natural light, and a laundry and second toilet.

Upstairs you will find 4 bedrooms all with new robes, polished timber floors and an updated family bathroom. Also upstairs is an extensive deck with views of Arthurs Seat to the left and Mount Martha Point to the right.

Outside is a 10m alfresco deck, large garage complete with roller door, built-in barbeque area and a garden full of beautiful, decade old fruit trees including citrus, stone fruit, olives, walnut and avocado, producing abundant supplies of fruit year round. There is also a 5000 lt water tank with pump that services the laundry sink and the garden hoses.

Initially on sale for $595,000 to $635,000 in October 2018, the price has been reduced to $540,000 to $560,000.  The agent says urgent action is required so it must be sold.  It last sold in 2004 for $220,000.

SQM’s Valuation tool estimates this house to be worth around $560,000 to $580,000.  Asking prices for houses have decreased 1.3% over the month, after a 3 year increase of 21.3%.

The home is in a popular sea-side location providing a Peninsula lifestyle of beach, shops, hotel and cafes.  It is also nearby to many world class wineries, golf courses, Peninsula Hot Springs and ocean beaches.

Move right in or renovate further, this property makes an ideal holiday home, a permanent residence or an investment property, with potential rental return of approximately $438 to $460 per week.  Rents have increased 1.4% over the month for houses in the postcode, after a huge 3 year increase of 24.0%Gross Rental Yield is 3.05%.  Currently vacancy rates sits at 3.5%.

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: 4 Jun 2019   Asking Price Chg on
  prev week
  Rolling month
% chg
  12 month
% chg
Sydney All Houses      1,223.5 3.9  -0.6%  -10.6% 
All Units 683.7 0.7  -0.2%  -5.7% 
Melbourne All Houses 931.8 -0.8  -0.6%  -7.2% 
All Units 541.1 0.7  -0.2%  -0.2% 
Brisbane All Houses 617.4 -0.5  0.1%  0.7% 
All Units 371.6 0.1  -0.1%  -2.7% 
Perth All Houses 655.2 -2.1  -1.5%  -4.1% 
All Units 384.0 -0.2  0.0%  -3.7% 
Adelaide All Houses 513.2 0.2  0.2%  0.1% 
All Units 301.4 -0.2  0.3%  -0.3% 
Canberra All Houses 810.2 0.2  0.1%  1.7% 
All Units 430.1 1.1  1.8%  4.5% 
Darwin All Houses 591.9 -0.6  0.9%  0.1% 
All Units 356.4 -0.6  -0.6%  -5.5% 
Hobart All Houses 517.4 0.3  1.0%  8.5% 
All Units 302.1 0.8  -1.8%  -1.3% 
National All Houses 567.2 -0.7  -0.1%  -0.9% 
All Units 374.6 -0.8  -0.5%  0.7% 
Cap City Average All Houses 905.0 1.3  -0.5%  -7.3% 
All Units 559.3 0.7  0.2%  -3.5% 

Next update: 11 Jun 2019

SQM Research Weekly Rents Index
Week ending: 4 Jun 2019        Rent        Chg on
    prev week
  Rolling month
% chg
   12 month
% chg
Sydney All Houses      691.4 0.6  0.3%  -3.8% 
All Units 503.5 -0.5  -0.4%  -3.8% 
Melbourne All Houses 540.0 -0.0  -0.7%  1.8% 
All Units 423.9 0.1  0.7%  3.2% 
Brisbane All Houses 459.4 0.6  0.3%  2.4% 
All Units 371.1 -0.1  -0.3%  0.5% 
Perth All Houses 450.7 1.3  0.8%  7.4% 
All Units 336.4 -0.4  -0.0%  3.5% 
Adelaide All Houses 394.1 0.9  0.5%  3.7% 
All Units 306.0 2.0  1.1%  2.1% 
Canberra All Houses 618.4 -4.4  -1.9%  -1.8% 
All Units 459.2 -1.2  0.5%  1.6% 
Darwin All Houses 504.3 7.7  1.0%  -4.7% 
All Units 371.8 -0.8  -0.6%  -7.9% 
Hobart All Houses 429.2 2.8  1.1%  8.7% 
All Units 381.2 -8.2  5.1%  8.7% 
National All Houses 440.0 1.0  -0.2%  0.9% 
All Units 373.0 5.0  1.6%  3.9% 
Cap City Average All Houses 555.0 2.0  0.4%  0.4% 
All Units 441.0 0.0 0.2%  -0.7% 

Next update: 12 Jun 2019

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