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SQM Research Residential Newsletter 
Tuesday 7 January 2020
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Black Dragon's
Words for the Week

“The attraction of New Year is this: The year changes, and in that change we believe that we can change with it. It is far more difficult, however, to change yourself than turn the calendar to a new page.” 

R. Joseph Hoffmann
Real Estate Realities 

Townhouses ‘the big trend for 2020’ amid cladding crisis

City planning expert Mike Day has shared his expectations for 2020 and the following decade, including more climate appropriate development and “mini Melbourne’s” in the outer ‘burbs.

But the RobertsDay director also reckons townhouses are going to be “the big trend” this year, amid the cladding crisis and a “growing lack of trust in new apartment blocks”.

Hitting the pavement will also become a bigger focus than before, as our cities grow into the future. Read on for Mr Day’s forecasts, following his top five.

1.  ‘Mini Melbournes’ will emerge in our outer suburbs
 
2.  The growth of ‘mixed-use’ developments and the emergence of ‘overlapping use’ buildings
 
3.  Climate, environment and health will direct planning decisions

4.  Lower rates of private vehicle ownership

5.  Growth in sustainable and affordable mobility on demand in our suburbs

6.  Townhouses are the big trend for 2020
 
7.  An increase in transit-based walkable neighbourhoods
 
8.  A good Walk Score will add $30,000-$50,000 to individual property values
 
9.  Separation of roads, bicycle paths and pedestrian paths

10.  A return to smaller homes and centralised amenities for communities
 
Welcome back!

We trust you had a great Christmas and an enjoyable and relaxing break.  We’re expecting 2020 to be an interesting year and we look forward to sharing our experiences and working with you again. 
Let's get right into it and see how property listings have been tracking..

 

Property Listings Decreased in December 2019

SQM Research's latest data reveals that national residential property listings decreased in December 2019 by 14.8%, falling from 338,971 in November 2019 to 288,966. Compared to 12 months ago, listings were down by 12.0%.

All capital cities experienced decreases in property listings over the month with the largest decrease in Sydney of 28.7%, followed closely by Canberra of 28.1%.

Year-on-year listings also show similar declines for all capital cities with Sydney recording a significant decline of 30.1%.



The month of December traditionally records falls in properties listed for sale as it is the start of the festive and summer holiday period, whilst November shows a surge in listings as vendors are keen to sell before the holiday season approaches.

The recent devastating bushfires in NSW, Canberra and Victoria could also result in declines in property listings and impact property values in these regions in the coming months.


Asking Prices

Capital City asking prices increased by 2.4% for houses and 0.8% for units over the month to 31st December 2019. The year ended with unit asking prices at $577,600 and houses $977,900.  

Compared to a year ago, the capital city asking prices posted increases of 5.8% for houses and 1.0% for units.

Over the month, Sydney and Hobart were the only capital cities to record increases in both house and unit prices.  Darwin continues to record declines in both house and unit prices of 2.0% and 1.2% respectively.

All other capital cities recorded increases in house prices, but experienced marginal declines in unit prices over the month.  The largest fall in the unit market was Perth with a 1.6% decline but the city’s house price increased by 0.3%.  Hobart’s unit prices had the strongest growth of 2.0%.
Overall, Melbourne recorded the strongest price growth of 4.2% for houses but had declines in the unit market of 0.6%.  Melbourne’s median house asking price has now reached back to over one million dollars.  The last time this occurred was in the period between April to June 2018. The median asking price of a Melbourne house now sits at $1,027,600.

Recording a 2.4% increase in asking house prices over the month, the Sydney house market has also climbed back to its 2017/2018 highs of over $1.3 million.  The median asking house price in Sydney is now $1,341,400.

 


DISTRESSED PROPERTY OF THE WEEK

 14 English Street, Manunda QLD 4870
 

We kick of 2020 with an opportunity to purchase a 4 bedroom, 2 bath property on a generous 1,012 sqm, fully fenced block in Manunda, a suburb in Cairns, Queensland.

Located just 5 minutes from Cairns CBD, this home offers space and a convenient location. With a floor size of 135 sqm, the home offers 3 good-sized bedrooms with an extra large 4th bedroom that can be used as a rumpus room or home studio; an open plan dining/lounge area; a separate laundry; undercover parking for 2 cars and a secure outdoor entertaining area. 

Built in 1970, the home needs some cosmetic updates which is reflected in the low asking price of mid-$300,000s. 
The current Asking Prices for houses in postcode 4870 is approximately $395k to $477k.  

Asking prices have dipped by 3.9% over the last month which is not unusual for the festive/holiday season. Over the last 3 years there has been marginal growth of 0.6% for house asking prices.  Unit asking prices have had higher growth of 5.6% over the 3 years and 4.9% over the 12 months.

This property has been on sale since November 2019 and was last sold for a bargain price of $37,331 in April 2018 - this was more likely an off-market transfer. Prior to this transfer, the home was sold for a more realistic $290,000 in September 2010.  The agent says the owners have just moved overseas and are keen for a sale, so make an offer.

Manunda is a family-friendly suburb and the home is close to Raintrees Shopping Centre, Cairns CBD, cafes and schools. 

The property could make a good rental with Asking Rents in the area increasing 2.9% over the month and 13.9% growth over 3 years.  Asking Rents for units have increased 14.1% over 3 years.  The Implied gross rental yield for houses is a healthy 5.7%.  

In the last 5 years, the Vacancy Rates has remained below 2.5% and is currently a low 1.7%.  Demand is set to rise due to population and job growth in Cairns as a result of multiple infrastructure projects currently underway, including construction of a number of new hotels, expansion of Cairns Port, upgrades to the local James Cook University, Cairns Airport domestic terminal and the Cairns Convention Centre.

This area has also always been a popular travel destination for tourists due to its tropical climate and the gateway to the Great Barrier Reef.

Sitting on a large block in a convenient location, there is potential in this home and with Sydney and Melbourne’s house price recovery, Queensland and its regional areas is currently offering more value for money for buyers. 

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 Highest Yielding Localities





 
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: 7 Jan 2020   Asking Price    Chg on
  prev week
  Rolling month
% change
 12 month
 % change
Sydney All Houses 1,327.7 -13.7  1.3%  5.3% 
All Units 723.1 2.0  1.4%  2.5% 
Melbourne All Houses 1,030.6 2.9  3.5%  5.6% 
All Units 548.9 -0.7  -0.7%  -0.7% 
Brisbane All Houses 637.8 0.4  0.3%  2.8% 
All Units 370.5 0.1  -0.2%  -1.5% 
Perth All Houses 655.2 -1.5  0.4%  -1.6% 
All Units 374.2 -0.3  -0.9%  -4.0% 
Adelaide All Houses 522.4 1.2  0.3%  1.2% 
All Units 301.2 -0.3  -0.3%  0.4% 
Canberra All Houses 822.4 -0.2  -0.1%  -0.2% 
All Units 431.5 -0.4  -1.3%  0.3% 
Darwin All Houses 565.1 -1.1  -1.3%  -3.4% 
All Units 308.8 -0.3  -0.9%  -19.3% 
Hobart All Houses 544.2 -0.2  1.1%  9.9% 
All Units 339.5 -2.4  0.1%  8.5% 
National All Houses 585.8 -1.7  -0.1%  2.7% 
All Units 384.0 0.7  -0.0%  1.6% 
Cap City Average All Houses 966.7 -11.3  1.0%  3.3% 
All Units 578.5 0.9  0.2%  0.6% 

Next update: 14 Jan 2020

SQM Research Weekly Rents Index
Week ending: 4 Jan 2020      Rent      Chg on
prev week
  Rolling month
% change
    12 month
% change
Sydney All Houses 685.1 0.9  -0.3%  -2.7% 
All Units 495.5 0.5  0.1%  -2.4% 
Melbourne All Houses 537.7 0.3  0.3%  -0.4% 
All Units 412.8 1.2  0.9%  0.7% 
Brisbane All Houses 473.1 0.9  1.4%  3.5% 
All Units 377.7 0.3  -0.1%  0.3% 
Perth All Houses 440.3 -0.3  -0.0%  0.1% 
All Units 337.5 1.5  0.9%  3.8% 
Adelaide All Houses 404.4 -0.4  1.0%  2.5% 
All Units 316.1 0.9  0.4%  5.0% 
Canberra All Houses 634.2 -3.2  -1.9%  0.3% 
All Units 463.6 1.4  -0.4%  -0.5% 
Darwin All Houses 474.0 -1.0  -2.5%  -6.5% 
All Units 384.5 3.5  1.5%  -1.0% 
Hobart All Houses 468.1 5.9  3.4%  9.5% 
All Units 409.2 0.8  -5.6%  22.9% 
National All Houses 448.0 -2.0  -0.2%  0.4% 
All Units 363.0 0.0% -0.8%  -1.1% 
Cap City Average All Houses 554.0 0.0% 0.2%  -0.7% 
All Units 437.0 1.0  0.7%  -0.5% 

Next update: 12 Jan 2020
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