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SQM Research Newsletter - Tuesday 18 June 2019
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Black Dragon's
Words for the Week

"Beware of the naked man who offers you his shirt." 

Navjot Singh Sidhu

Real Estate Realities 

‘IT geek’ building dream home out of old tyres, bottles and cans

A Sydney systems analyst has developed an unusual approach to getting a house on the cheap - he is building a new home out of used tyres and bottles, and getting volunteers to do much of the work.

Many of the cans and bottles woven into the walls were beers and refreshments Mark van Laarhoven served his band of helpers. The tyres, sourced from service stations, insulate the home.

Mr van Laarhoven said he was able to recruit volunteers - a mix of “hippie types”, travellers and architects - thanks to his commitment to sustainable building.

“There have been so many visitors … sometimes we just collect bottles left around the fire from (drinks) the night before and use them for the walls,” he said.

The home at Marulan, when fully completed next year, will require minimal heating or cooling and other features will ensure it draws on few resources from the local municipality.

The now-Blakehurst resident plans to retire in the home, and said making it sustainable was his way of “changing the world”.

Read More...

National Vacancy Rates Declined Marginally in May

by Louis Christopher, CEO, SQM Research

Data released by SQM Research today has revealed the national residential rental vacancy rate declined marginally in May 2019 to 2.2%, a decrease from 2.3% in April.  The total number of vacancies Australia-wide is now at 75,093 properties for rent, a decrease of 2,571 over the month but up 5,941 dwellings over the past 12 months.
 
Most states recorded minor declines ranging from 0.1% to 0.3%. Darwin and Sydney have the highest vacancy rates in the country, both at 3.3%.  A 3.0% vacancy rate is what would normally be considered a balanced market.  Darwin declined by 0.3% and Sydney’s decline was 0.1%.  Perth’s vacancy rate is not far behind at 3.1%, having dropped 0.1%.
 
Hobart’s vacancy rate decreased from 0.6% to 0.5% in May and continues to record the lowest vacancy rate in the country.




The month of May recorded a marginal change in rental vacancies, overall. However the standouts for me were the falls in vacancy rates for Brisbane and Perth. I think the rental market is decidedly turning in favour for landlords in these two cities. Both cities also recorded fairly strong increases in asking rents for the month. Indeed, Perth is now recording a 6% rise in asking rents for houses over the past 12 months.  With no expected material increase in new dwellings, I believe the rental market will continue to tighten from here for the two cities.
 

Asking Rents

Capital city asking rents decreased by 0.2% for both units and for houses for the week ending 12 June 2019 to record asking rents of $553 per week for houses and $441 per week for units.  In comparison, over the 12 months, asking rents for houses increased 0.4% but declined 0.7% for units.
 
Sydney’s asking rent for units and houses have both continued to decline marginally by 0.1% for houses and 0.5% for units to 12 June.  Over 12 months, the decline has been 3.6% for house rents and 3.8% for units.

Adelaide, Darwin and Hobart were the only states to experience increases in weekly rents for both houses and units. Adelaide’s house rents increased 1.0% and units by 1.8%, Darwin’s house rents increased by 3.0% (the highest among all states) and units increased by 0.1%. Hobart’s house rents increased 1.9% and units increased by 3.7% (the highest among all states).

 


 
DISTRESSED PROPERTY OF THE WEEK

27 Minti St, Maroochydore Qld 4558

This distressed property could be a good opportunity to secure a home in Maroochydore in Queensland’s Sunshine Coast.  The home at 27 Minti Street has 3 bedrooms, 2 bathrooms plus 2 living areas and sits on a 531 sqm block, and is for sale at $590,000.  It has been on sale since December 2018 at an initial price of “offers over $600,000”.  It last sold 10 years ago for $480,000 in 2009.

This home also includes a swimming pool with timber gazebo, large front yard with a secure fence and a huge Media/Pool room leading out to the backyard pool area. There is also a large upstairs deck providing great outdoor living all year around.
 
Inside there is a kitchen with plenty of cupboard space, timber floors throughout the top floor and tiled ground floors. The master bedroom also has a walk-in robe and a spa ensuite. The house has 3 split system air-conditioners, covering both upstairs and downstairs.


It is a move-in ready family home or you can rent it and hold for the future.  Currently, weekly rents for houses range from $511 to $527 in postcode 4558.  Weekly Asking Rents increased marginally by 2.1% over the quarter, however there has been a decline of 2.6% over the month.  Gross Rental Yield is 4.56% for houses and vacancy rates for the area sits at a low 1.9%.
 

Asking Prices for houses in the area increased 20.5% over the last 3 years but has declined 3.0% over the month.
 
The home is approx. 200 m from the Maroochy River and within a short walk to Bradman Avenue Picnic Point and Chambers Island, where you will find fishing, water sports, cafes and the sandy beaches of the Maroochydore River.  It is also only a short drive to the newly developed Maroochydore CBD and under 7kms to the Sunshine Coast Airport.
 
The area is currently undergoing one of south-east Queensland’s largest urban
regeneration projects.  The vision is for a vibrant hub of commerce, technology, innovation, entertainment and inner-city living and will include prime commercial office space, convention and exhibition facilities, premium hotel, public plazas and new waterways and parks. 
 
With the arrival of the new infrastructure, analysts project the Sunshine Coast’s population to grow from 346,522 to 500,000 by 2036.  Over recent years the Sunshine Coast has reported to have attracted billions of dollars in public and private investment, making the regional economy one of the strongest in the state.  The Sunshine Coast Council has estimated up to 2 million more passengers would be flying into the region by 2040 once the region's expanded airport was operational by 2020.
 
“Maroochydore’s new city centre will cement the Sunshine Coast as one of Queensland’s, and Australia’s, best-performing regional economies.” - QLD Premier, Annastacia Palaszczuk

 
Now could be the time to secure a home and enjoy the fantastic lifestyle in a premier Sunshine Coast position.  Monitor 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: 18 Jun 2019 Asking Price Chg on
prev week
Rolling month
% chg
12 month
% chg
Sydney All Houses 1,229.1 2.5  0.9%  -10.0% 
All Units 689.2 4.1  1.0%  -5.0% 
Melbourne All Houses 939.0 2.5  0.7%  -6.4% 
All Units 541.4 0.4  0.2%  -0.3% 
Brisbane All Houses 618.1 0.2  -0.1%  0.6% 
All Units 371.8 -0.2  -0.0%  -2.8% 
Perth All Houses 654.7 1.3  -0.9%  -4.2% 
All Units 385.3 0.6  0.2%  -3.3% 
Adelaide All Houses 513.3 0.7  0.1%  0.3% 
All Units 301.9 0.2  0.4%  0.4% 
Canberra All Houses 801.7 -8.1  -0.8%  -0.4% 
All Units 431.4 0.5  1.1%  5.7% 
Darwin All Houses 589.8 -1.6  -0.2%  -0.2% 
All Units 354.6 -1.3  -0.7%  -6.4% 
Hobart All Houses 519.2 -1.5  0.5%  8.5% 
All Units 305.3 1.2  1.0%  0.2% 
National All Houses 568.4 1.5  0.3%  -0.3% 
All Units 373.4 0.3  -0.4%  -0.2% 
Cap City Average All Houses 909.6 0.9  0.8%  -6.5% 
All Units 563.7 3.4  1.1%  -3.0% 
Next update: 25 Jun 2019
 
SQM Research Weekly Rents Index
Week ending: 12 Jun 2019   Rent    Chg on
 prev week
Rolling month
% chg
12 month
% chg
Sydney All Houses  689.2 -2.2  -0.1%  -3.6% 
All Units 502.8 -0.8  -0.5%  -3.8% 
Melbourne All Houses 540.0 -0.0  -0.4%  2.0% 
All Units 424.0 0.0  0.4%  3.0% 
Brisbane All Houses 459.7 0.3  0.3%  2.2% 
All Units 372.1 0.9  -0.3%  0.8% 
Perth All Houses 448.9 -1.9  0.4%  6.5% 
All Units 336.2 -0.2  -0.3%  3.6% 
Adelaide All Houses 395.5 1.5  1.0%  4.2% 
All Units 308.5 2.5  1.8%  2.7% 
Canberra All Houses 618.2 -0.2  -1.0%  -2.1% 
All Units 462.6 3.4  1.5%  2.6% 
Darwin All Houses 512.7 8.3  3.0%  -4.8% 
All Units 370.9 -0.9  0.1%  -7.9% 
Hobart All Houses 435.1 5.9  1.9%  8.8% 
All Units 388.6 7.4  3.7%  10.9% 
National All Houses 441.0 1.0  -0.5%  1.6% 
All Units 370.0 -3.0  1.9%  3.1% 
Cap City Average All Houses 553.0 -2.0  -0.2%  0.4% 
All Units 441.0 0.0 -0.2%  -0.7% 
Next update: 20 Jun 2019
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