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SQM Research Residential Newsletter 
Tuesday 31 March 2020
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Black Dragon's
Words for the Week

The hardest work in the world is being out of work.”

Whitney M. Young
American civil rights leader

Real Estate Realities 

Will households be able to pay off their mortgage during the downturn?

 The economic downturn necessary to slow the coronavirus pandemic will see many people lose their job, shut their business or work reduced hours. 

The substantial drop in income that many people are facing will make life challenging for many of the 37% of Australian households that have a mortgage on their home. 

Whether people are able to pay off their mortgage and hold onto their home during the downturn will be many households’ number one concern.

Banks will defer mortgage repayments for borrowers who lose their jobs

Banks have promised to defer mortgage repayments during the crisis. This will be a huge relief for households that see their income fall dramatically. This commitment will mean many borrowers that would likely have defaulted on their loans will be able to keep their homes. 

This decision by the banks will be well-received by the community. But it is also in their interest. Banks don’t want to foreclose on many borrowers while the property market is weak. Forced sales would push property prices down further, meaning banks would likely not recover the full amount they are owed. This is particularly the case for borrowers in negative equity.
 

Auctions Listings

Note: All on-site and in-room property auctions along with open home inspections are shifting to online platforms due to the Federal Government's bans on public gatherings from midnight Wednesday 25 March 2020.  The measures are in place to help prevent the spread of Covid-19.

SQM Research will to continue to bring you updates on scheduled auctions and is now very close to releasing its own auction clearance rate index. Details to come shortly.  For now, stock volumes, days on market and asking prices are benchmarks worth following in light of the decline in auction activity. Good news is these insights and more are available at SQM Research for everyone to access. Click here to find out more and how we can help.


DISTRESSED PROPERTY OF THE WEEK

62 Graylands Road, Claremont WA 6010

If it is Old World charm you’re looking for, this 3 bedroom house with a 1-bedroom, self-contained Granny flat, could be a good buy. It is currently selling for $838,000 in the Perth suburb of Claremont.
 
The home was built it the 1960’s and sits on a 354 sqm block.  It features good sized bedrooms, central bathroom, separate kitchen and lounge areas, and a laundry room.   The Granny flat is self-contained with separate bedroom, kitchenette/dining area, small lounge and combined bathroom/laundry.  In front of the house you will find a front porch and deck, at the back is a paved entertaining area and low maintenance garden.
 
The home also has some period features such as open fire place, decorative cornices and ceilings, leadlight windows, and jarrah wooden floors. 
 
The home requires some renovations and the owner has said he will offer to provide plumbing and electrical works to complete the bathroom to the specifications of a buyer, as part of the sale.
 
The suburb of Claremont is about 9km west of Perth’s CBD and is a popular destination for shopping and leisure.  This home is close to train stations and buses, as well as local and private schools such as Methodist Ladies’ College, Christ Church Grammar and Scotch College. Lake Claremont, Claremont Golf Club, Claremont Pool, Claremont Yacht Club and beaches are also close by.
 
This home is ideally suited to home renovators and investors.  This is a vibrant and convenient suburb that has everything to offer and attracts mature and young couples, singles and families.


Currently, house asking prices in postcode 6010 range from $900,000 to over $1 m and has seen a 1.6% growth over the month.  This home is priced below the current price range as it does need updating and renovating. 

Investors will be excited to know that house asking rents in this area increased 38.6% over the last 3 years and 4.4% over the last month.  The agent states that, until recently the Granny flat was rented at $300 per week and the home at $400 per week.  Vacancy rates sits at 3.1% and a gross rental yield of 4.4% can be achieved. 
 
It is well worth looking at this property if you are a keen renovator.  Don’t forget, due to Covid-19 all viewings are strictly by private appointment.  


With the current health and economic crisis we are facing, it will be difficult to put an exact figure on how far house prices could slump.  It is important to monitor markets closely.

Keep monitoring this market’s growth with SQM Research’s free property data. Also consider the SQM Property Explorer product for more in-depth data and property price estimator.




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

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. 

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: 31 Mar 2020 Asking Price   Chg on
  prev week
  Rolling month
% chg
  12 month
% chg
Sydney   All Houses   1,373.0 1.0 0.5% 11.1%
All Units 710.8 2.7 0.8% 2.5%
Melbourne All Houses 1,035.3 8.8 1.7% 11.0%
All Units 557.3 1.4 0.1% 1.1%
Brisbane All Houses 650.8 -6.2 -0.1% 5.9%
All Units 371.9 -0.1 -0.5% -1.0%
Perth All Houses 658.2 -0.9 1.4% -1.3%
All Units 376.5 0.0   0.8% -2.1%
Adelaide All Houses 519.9 -1.6 -0.9% 0.9%
All Units 305.2 -0.3 0.3% 1.7%
Canberra All Houses 821.2 2.0 0.4% 0.4%
All Units 439.5 -0.5 -2.2% 4.4%
Darwin All Houses 582.1 -0.5 3.1% -0.0%
All Units 320.5 -0.5 0.5% -20.4%
Hobart All Houses 578.9 0.9 3.1% 14.2%
All Units 362.3 0.8 -3.5% 12.2%
National All Houses 596.1 -4.1 0.2% 5.3%
All Units 390.4 -0.7 0.2% 4.0%
Cap City Average   All Houses 990.5 5.3 0.7% 8.8%
All Units 577.0 2.4 0.6% 2.1%

Next update: 7 Apr 2020

 
SQM Research Weekly Rents Index
Week ending: 23 Mar 2020    Rent   Chg on
  prev week
  Rolling month
% chg
  12 month
% chg
Sydney  All Houses   699.0 -3.0  -1.0%  -1.2% 
All Units 500.2 -0.2  -0.3%  -1.5% 
Melbourne  All Houses 551.4 0.6  -0.2%  1.6% 
All Units 422.3 -0.3  -0.6%  0.3% 
Brisbane  All Houses 468.2 -1.2  -0.8%  2.4% 
All Units 378.8 0.2  0.2%  2.0% 
Perth  All Houses 452.4 4.6  1.5%  2.8% 
All Units 346.3 1.7  2.7%  3.6% 
Adelaide  All Houses 407.9 1.1  0.4%  3.3% 
All Units 309.8 1.2  0.1%  2.2% 
Canberra  All Houses 639.2 9.8  0.9%  -1.0% 
All Units 467.4 3.6  0.6%  2.2% 
Darwin  All Houses 463.1 2.9  2.1%  -5.5% 
All Units 362.1 -0.1  -2.3%  -4.0% 
Hobart  All Houses 460.4 6.6  1.8%  4.4% 
All Units 410.5 1.5  -0.7%  13.8% 
National  All Houses 450.0 0.0 0.4%  1.8% 
All Units 373.0 8.0  0.8%  3.6% 
Cap City Average  All Houses 563.0 1.0  -0.2%  0.7% 
All Units 441.0 0.0 -0.2%  -0.2% 

Next update: 28 Mar 2020

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