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SQM Research Residential Newsletter - 
Tuesday 20 October 2020
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Words for the Week

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Real Estate Realities 

Explainer: How Australia’s slowing population growth will affect property markets

Australia’s population growth will grind to a near halt for the next two years because of coronavirus border closures, which is expected to smash GDP, the economy and harm property markets.

Budget documents reveal the federal government expects the rate of growth to fall from 1.2% last financial year to 0.2% this year, and then 0.4% next year - the slowest growth in a century.

The sudden loss of international migration has already hit the economy and property markets across the country, with low-cost, investor-class housing losing value as international students and new arrivals disappeared nearly overnight.

What does this mean for the wider property market now and into the future?

First, what are the numbers?

The 1 percentage point fall from 1.2% to 0.2% is mostly due to a drop in international arrivals.

AMP Capital chief economist Shane Oliver said the drop was so large that births were barely offsetting the shortfall.

“Population growth usually sits at about 1.7%. About two-thirds of that are from immigration and the rest is from natural growth,” the respected economist said. “Usually we see about 240,000 net immigrants coming here each year. This year the government is forecasting that to be negative 70,000.

 

AUCTION RESULTS for week ending 18 October 2020

Full individual auction results can be found on our website: 



AUCTION LISTINGS* for week ending 25 October 2020


CITY

Saturday

Rest of Week

 

STATE

Saturday

Rest of Week

Link

Sydney 651 128   All NSW 740 176 Auctions in NSW
Melbourne^ 309 260   All VIC 328 266 Auctions in VIC 
Brisbane 50 21   All QLD 103 71 Auctions in QLD 
Perth 6 1   All WA 7 5 Auctions in WA 
Adelaide 38 24   All SA 40 29 Auctions in SA 
Canberra 71 26   All ACT 71 26 Auctions in ACT 
Darwin 3 5   All NT 3 6 Auctions in NT 
Hobart 0 0   All TAS 3 0 Auctions in TAS

* The above counts of auctions represent most recent known auction dates for the coming week.  ^As at 18-Oct-20, Melbourne outdoor auctions will be allowed (max. 10 people).
 

DISTRESSED PROPERTY OF THE WEEK

9 / 7 York Street, Nundah, QLD 4012
 
This 3-bedroom, 118 sqm (approx.) unit in Nundah, approx. 12km from Brisbane’s CBD, has an asking price of $389,000 and was initially advertised for sale in late 2019.  It last sold for $370,000 in September 2014.
 
Located on the 1st floor, the unit has an open-plan layout with a large kitchen and living space that leads out onto the covered balcony.  The bedrooms have newly laid carpets, built-in robes and the master bedroom has an ensuite.  Other features include ceiling fans, air-conditioning, single lock-up garage with remote access and freshly painted.
 
Built in 1998, the unit is also well positioned next to the trendy Nundah Village precinct with boutique shops, café, bars and more. It is also 300m to Nundah train station, 800m to Toombul Shopping Centre and 7kms to Brisbane Airport.
 
Current
Asking prices range from approx. $380k to $400k for units in this area with growth of 2.9% over 12 months and 2.1% growth over the last month.   
 
This unit was previously rented for $420 per week but current
Asking rents range from approx. $370 to $390 per week for units in this postcode.  Due to COVID-19 rents have declined by 1.9% over the month for units, but you can still expect a good Gross rental yield of 4.9% for units and 3.8% for 3-bedroom houses in this area.  Overall, Brisbane’s gross rental yield for units at 5.2%, seems to have held up better during COVID-19 than Melbourne (3.6%) and Sydney (3.5%). The Vacancy rate in this area is also a low 1.6% as at September 2020.
 
Over recent years, this area has seen expansion and development resulting in increased unit development and business activity. This unit will attract first home buyers and investors looking for a vibrant suburb with good transport links and shopping that is also still mainly affordable. 

 
Keep monitoring this market with SQM Research’s free property data. Also consider the SQM Property Explorer 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: 20 Oct 2020   Asking Price      Chg on
prev wk
  Rolling month
% chg
  12 month
% chg
Sydney  All Houses   1,335.8 6.0  -2.4%  4.4% 
All Units 674.0 -1.6  -0.4%  -3.8% 
Melbourne  All Houses 1,029.4 1.4  0.2%  8.0% 
All Units 566.6 1.2  0.6%  4.0% 
Brisbane  All Houses 652.6 3.0  1.1%  3.5% 
All Units 377.0 0.6  0.3%  1.3% 
Perth  All Houses 673.1 5.1  1.3%  3.1% 
All Units 381.6 0.5  0.1%  1.1% 
Adelaide  All Houses 524.7 -1.2  -0.3%  1.2% 
All Units 308.7 -0.5  0.0%  2.5% 
Canberra  All Houses 803.6 -2.8  0.3%  0.1% 
All Units 465.9 3.2  2.3%  7.0% 
Darwin  All Houses 584.0 -0.4  1.6%  -0.8% 
All Units 346.4 1.1  0.4%  6.8% 
Hobart  All Houses 582.0 12.0  1.9%  10.6% 
All Units 405.4 1.9  1.0%  18.5% 
National  All Houses 604.4 4.6  1.3%  4.6% 
All Units 397.0 0.0  0.4%  4.0% 
Cap City Average   All Houses 980.7 11.1  -0.5%  6.0% 
All Units 563.0 -0.8  0.1%  -1.0% 

Next update: 27 Oct 2020
 

SQM Research Weekly Rents Index
Week ending: 20 Oct 2020      Rent         Chg on
    prev wk
  Rolling month
% chg
    12 month
% chg
Sydney  All Houses      611.3 -0.3  -1.5%  -9.2% 
All Units 451.5 -0.5  -0.9%  -9.2% 
Melbourne  All Houses 514.7 -0.7  -0.6%  -2.6% 
All Units 388.6 -1.6  -1.2%  -5.1% 
Brisbane  All Houses 468.7 1.3  0.9%  1.5% 
All Units 377.0 0.0  0.1%  -0.3% 
Perth  All Houses 475.1 1.9  1.1%  8.1% 
All Units 364.2 1.8  1.8%  8.3% 
Adelaide  All Houses 417.0 0.0  1.4%  5.0% 
All Units 315.2 -0.2  -0.5%  1.6% 
Canberra  All Houses 624.0 0.0  0.1%  1.8% 
All Units 480.4 0.6  1.3%  3.7% 
Darwin  All Houses 536.8 10.2  0.0%  3.7% 
All Units 372.5 3.5  1.3%  -1.3% 
Hobart  All Houses 448.8 -5.8  0.1%  3.5% 
All Units 379.8 -2.8  2.9%  -5.2% 
National  All Houses 468.0 5.0  0.4%  5.4% 
All Units 372.0 3.0  0.3%  2.2% 
Cap City Average   All Houses 528.0 1.0  -0.2%  -2.9% 
All Units 411.0 0.0 -0.5%  -5.5% 

Next update: 28 Oct 2020

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