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SQM Research Residential Newsletter 
Tuesday 14 January 2020
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Black Dragon's
Words for the Week

Success is not built on success. It’s built on failure. It’s built on frustration. Sometimes it’s built on catastrophe."

Sumner Redstone,
US media magnate
Real Estate Realities 

A crisis of under-insurance threatens to scar rural Australia permanently

Australia is in the midst of a bushfire crisis that will affect local communities for years, if not permanently, due to a national crisis of under-insurance.

Already more than 1,500 homes have been destroyed – with months still to go in the bushfire season. Compare this to 2009, when Victoria’s “Black Saturday” fires claimed more than 2,000 homes in February, or 1983, when the “Ash Wednesday” fires destroyed about 2,400 homes in Victoria and South Australia, also in February.

The 2020 fire season could end up surpassing these tragedies, despite the lessons learned and improvements in preparedness.

One lesson not really learned, though, is that home insurance is rarely sufficient to enable recovery. The evidence is many people losing their homes will find themselves unable to rebuild, due to lack of insurance.

National Vacancy Rates Increased Marginally in December

by Louis Christopher, CEO

New data released by SQM Research today has revealed the national residential rental vacancy rate increased marginally in December 2019 to 2.5% from 2.2% recorded in November, with the total number of vacancies Australia-wide now at 84,591 vacant residential properties.  The December 2018 vacancy rate was also 2.5%.

All states recorded marginal increases in vacancy rates with Sydney recording the highest at 3.6% followed by Darwin at 3.5% and Brisbane at 2.9%.  Hobart is the lowest of all capital cities at just 0.6%

Perth’s rental market is showing minor improvements with the vacancy rate remaining steady at 2.5% and asking rents increasing for both houses and units by 0.6% and 0.8% respectively.

While vacancy rates did rise in December, this was predominantly due to the seasonal movement of students and some industry specific workers. It is actually quite likely we have reached the peak in national rental vacancy rates with ongoing strong population growth absorbing current surplus rental stock over 2020.


Asking Rents

Over the month, Capital city asking rents increased 0.9% for houses and 0.7% for units for the week ending 12 January 2020 to record asking rents of $555 per week for houses and $437 per week for units.  In comparison over the 12 months, asking rents declined 0.7% for houses and 0.5% for units.

Sydney, Melbourne, Perth and Adelaide all recorded increases in asking rents for both houses and units over the month. Brisbane and Hobart recorded increases in house asking rents but unit asking rents decreased by 0.2% and 0.5% respectively.  

It was the reverse in Canberra where the city’s house asking rents decreased by 2.4% but its unit asking rents increased by 0.5%.  Darwin’s house asking rents recorded the highest decrease of 3.0% with unit rents remaining steady. 



 

DISTRESSED PROPERTY OF THE WEEK

 58 Elizabeth Avenue, Clontarf QLD 4019
 

58 Elizabeth Avenue, in the waterfront suburb of Clontarf, Brisbane, has been on sale since October 2019 and the owners say they now want it sold.  The asking sale price of $395,000 to be below the current estimated house asking price of $480k to $565k in the postcode 4019.  The home last sold for $326,000 in November 2007.
 
The home sits on a 425 sqm block and has a modern open-plan kitchen, living and dining areas; 3 large bedrooms, including a spacious ensuite with dual shower and dual vanity plus a walk-in robe in the master suite; the main bathroom has a separate shower and Jacuzzi tub. There is also a separate laundry, hardwood floors and a private outdoor entertaining area.
 
The home is in a good location, being less than 400 metres from the water’s edge and close to Clontarf Beach State School and High School, local Aldi and IGA shops and Redcliffe Golf course.  It is also close to public transport and has easy access to Brisbane CBD and the Airport.
 

Asking prices in the area have increased 6.2% for 3-bedroom houses over the last 3 years and 7.2% over the last 12 months.  Over the last month, house prices have continued to increase by 1.3%.  The unit market also shows good growth at 8.2% over 12 months and 1.3% over the last month.
 
Investors should note that
asking rents for 3-bedroom houses has increased 1.7% over 12 months and 0.6% over the month. The unit market is also showing good growth of 4.2% over 12 months and 1.5% over the last month. The vacancy rate in postcode 4019 is low at 2.3%.  Investors can earn a gross rental yield of 4.3%.
 
This property would suit first home owners and young families as this area offers good value properties in a family-friendly area with a community atmosphere and lifestyle benefits.  Investors could also take advantage of the favourable rental conditions.

For further insights into  the property market in 2020, subscribe to Christopher’s Boom and Bust Report 2020.

SQM website features free property data that is now more interactive, easier to navigate and user-friendly, so keep monitoring this market’s growth at SQM Research’s free property data. Also consider the SQM Property Explorer product for more in-depth data and property price estimator.


Current Top 5 Fastest Rental Growth





 
Louis Christopher's 2020 Housing Boom & Bust Report has now been released and is available for $59.95!

The Housing Boom and Bust report is accurate, impartial and detailed. Best of all it is priced so that EVERYONE from real estate agents, financial planners to regular mums and dads can access it at just $59.95.
 
Key features of the 2020 Boom & Bust report include:

  • Louis Christopher's personal take on the markets 
  • Capital city forecasts 
  • Main drivers of demand and supply at present and going forward 
  • All leading indicators such as stock on market, vacancy rates etc
  • All the possible scenarios that could play out next year 
  • Nearly every city and regional postcode covered re: property stats plus ratings outlook

If you are interested in where the market is heading on a national level, then this is the report for you from one of the most accurate housing market forecaster in the country. 

If you are a real estate professional or a serious residential property investor, you will not want to miss this report!

Click here to purchase now!

 

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: 14 Jan 2020   Asking Price Change on
  prev week
  Rolling month
% chg
 12 month
% chg
Sydney All Houses 1,319.7 -8.0  -1.1%  4.8% 
All Units 721.8 -1.4  0.7%  2.2% 
Melbourne All Houses 1,034.5 3.9  2.6%  5.7% 
All Units 549.1 0.2  -0.3%  -0.8% 
Brisbane All Houses 637.7 -0.0  0.2%  2.7% 
All Units 371.0 0.5  0.1%  -1.3% 
Perth All Houses 654.2 -1.0  0.1%  -2.0% 
All Units 374.8 0.6  -0.6%  -3.6% 
Adelaide All Houses 523.2 0.8  0.6%  1.7% 
All Units 300.7 -0.5  -0.6%  0.5% 
Canberra All Houses 821.3 -1.1  -0.4%  -0.1% 
All Units 432.7 1.1  -0.6%  1.2% 
Darwin All Houses 564.9 -0.1  -1.0%  -3.8% 
All Units 307.5 -1.3  -1.0%  -22.2% 
Hobart All Houses 549.5 5.4  1.9%  11.7% 
All Units 340.2 0.7  1.7%  7.9% 
National All Houses 584.4 -1.3  -0.4%  2.9% 
All Units 384.7 0.7  -0.4%  1.8% 
Cap City Average   All Houses 967.3 0.6  -1.0%  3.8% 
All Units 576.8 -1.6  0.1%  0.5% 

Next update: 21 Jan 2020

SQM Research Weekly Rents Index
Week ending: 12 Jan 2020 Rent Change on
    prev week
  Rolling month
   % chg
   12 month
% chg
Sydney All Houses     686.6 1.4  0.3%  -2.7% 
All Units 496.2 0.8  0.5%  -2.5% 
Melbourne All Houses 539.8 2.2  1.0%  -0.3% 
All Units 413.9 1.1  0.9%  1.2% 
Brisbane All Houses 473.1 -0.1  0.9%  3.4% 
All Units 377.8 0.2  -0.2%  0.4% 
Perth All Houses 441.6 1.4  0.6%  0.5% 
All Units 336.2 -1.2  0.8%  2.9% 
Adelaide All Houses 402.7 -1.7  0.1%  1.7% 
All Units 314.6 -1.6  0.2%  4.1% 
Canberra All Houses 633.1 -1.1  -2.4%  -0.3% 
All Units 465.3 1.7  0.5%  -0.7% 
Darwin All Houses 468.5 -5.5  -3.0%  -7.6% 
All Units 380.7 -3.7  -0.0%  -2.8% 
Hobart All Houses 462.5 -5.5  2.0%  9.8% 
All Units 420.6 11.4  -0.5%  23.2% 
National All Houses 451.0 3.0  0.7%  0.4% 
All Units 364.0 1.0  0.0% -1.1% 
Cap City Average   All Houses 555.0 1.0  0.9%  -0.7% 
All Units 437.0 0.0 0.7%  -0.5% 

Next update: 20 Jan 2020

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