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SQM Research Residential Newsletter - 
Tuesday 5 May 2020
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Words for the Week

“The reason why people give up so fast is because they tend to look at how far they still have to go, instead of how far they have gotten.” 

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Real Estate Realities 

Virtual auctions: Why hasn’t the take-up been greater so far?

We’ve logged on for Zoom yoga classes and online Bunnings orders, but in the month since public auctions were banned our take-up of virtual auctions has been less enthusiastic.

The real estate industry had just three days’ notice in the last week of March that they would need to adapt the upcoming super Saturday of auctions to use an online method, or move to a traditional private sale. And for the Saturday after, and for the foreseeable future, until the coronavirus pandemic is resolved.

Although agents scrambled to adjust to strict social distancing rules in the interests of protecting the public from the COVID-19 outbreak, private sales quickly came into favour.

The weekend before Anzac Day, almost half of Sydney’s scheduled auctions were switched to private treaty. For Melbourne, it was almost three-quarters, Domain figures show.

Online auctions are going ahead and getting results – some are drawing strong competition or high premiums over the reserve price – but unexpected teething issues have emerged beyond making sure the camera is on or finding buyers in an uncertain economy.

 

New Property Listings Decreased in April

by Louis Christopher

Figures released today by SQM Research reveal national residential property listings decreased in April by 4.9% from 307,847 listings in March 2020 to 292,775. Compared to 12 months ago, listings were down by 11.9%.

All capital cities experienced decreases in property listings over the month except for Canberra which posted a marginal 0.4% increase.

The largest decrease was in Perth with an 8.4% decrease, followed by Sydney at 7.2% and Adelaide and Darwin both posted 6.0% decreases in property listings. Hobart had the smallest decrease of 4.3% in listings.

Year-on-year listings show more significant declines for all capital cities with Sydney recording a decline of 19.4%, followed by Darwin with a 17.7% decline and Perth a 17.4% decline this time last year.

Stock on Market Table:

We confirm there was a large fall in new listings recorded over the course of April which impacted every capital city. We also note the surge in older listings, particularly for properties that have been on the market between 30 to 60 days.  This tells me that sellers struggled to sell their properties over April and new sellers deferred listing. The housing market has clearly been weakened by the coronavirus and the restrictions placed on the economy to limit the outbreak. With the lifting some restrictions over the course of May, we could see a lift in buyer activity for housing; however many issues persist such as the spike in unemployment and the ongoing closure of the international border.

Asking Prices
Capital City asking prices increased by 0.7% for houses and increased 0.1% for units, over the month to 5th May 2020. Unit asking prices are now at $574,900 and houses $994,300.  

Compared to a year ago, the capital city asking prices posted increases of 9.4% for houses and 3.0% increase for units.

Over the month, some capital cities recorded marginal asking price increases, with the exception of Perth, Canberra and Hobart which all recorded declines for both houses and units.
 
Brisbane recorded the highest decline in house prices of 1.0% over the month, followed by Perth 0.9%, Hobart 0.7% and Canberra 0.1% decline in house prices.

Unit prices declined in Sydney by 0.6%, Perth 0.5%, Hobart 0.3% and Canberra 0.1%.

Melbourne, Adelaide and Darwin were the only capital cities to record increases in both house and unit prices. Strongest monthly growth was seen in Sydney house prices with a 1.1% increase and Melbourne’s unit market which saw a 1.0% increase.
 
Year on year, it was only Perth and Darwin that experienced declines in house and unit prices.  All other capital cities showed some strong growth this time last year where house prices rose 12.4% in Sydney, 11.2% in Melbourne and 12.0% in Hobart.



AUCTION LISTINGS* for week ending 10 May 2020


CITY
Saturday
Rest of Week
 
STATE
Saturday
Rest of Week
Link
Sydney 141 63   All NSW 180 115 Auctions in NSW 
Melbourne 116 42   All VIC 123 46 Auctions in VIC 
Brisbane 12 6   All QLD 27 38 Auctions in QLD 
Perth 0 1   All WA 0 1 Auctions in WA 
Adelaide 13 15   All SA 13 17 Auctions in SA 
Canberra 18 12   All ACT 18 12 Auctions in ACT 
Darwin 0 0   All NT 0 0 Auctions in NT 
Hobart 0 0   All TAS 0 0 Auctions in TAS

*Note: To date, the NSW, WA and NT state governments have announced the return to public open homes and on-site auctions this Saturday, some online auctions could be converted to on-site auctions or postponed to a future date.  The above counts of auctions represent most recent known auction dates for the coming week. 


AUCTION RESULTS for week ending 3 May 2020

Auction clearance rates noticeably picked up last week for Sydney and Melbourne. Albeit from very low levels and still remain at very low levels.  Sydney recorded a clearance rate of 38.9% and registering the 4th straight week of clearance rate rises from what would have been the all time low recorded on the 12th of April.

Melbourne also recorded a rise in the clearance rate to 29.4% with the mid-week results fairing a little better than the Saturday Auctions. Once again, the ACT recorded the strongest clearance rate of any city at 45.8% but on low volumes of just 24 auctions.

And that is the clear takeaway this week – that being auction volumes are at very low levels and will remain the case for this week as well.  But on the bright side, with the lifting of the Auction Ban in NSW and some other states it is very possible we will see a rise in the number of scheduled auctions in coming weeks.   
For those that are interested in the individual results, you can now find them on our website:
 




 


DISTRESSED PROPERTY OF THE WEEK

2 Canara Place North Lambton NSW 2299

Located in North Lambton within the City of Newcastle, some 160km north of Sydney’s CBD, is this 5 bedroom, 1 bathroom house listed for sale from $530,000 to $550,000.  It last sold in 2013 for $449,950.
 
The home is a classic mid-century home in a quiet cul-de-sac location and is currently configured with 5 spacious bedrooms, all with built-in robes; open-plan living, dining and kitchen; one bathroom and second w/c; a backyard with garden shed and a single carport and freestanding single garage. 
 
The home sits on a 689sqm corner block and would suit first home buyers, families or investors.  Currently it is configured for the student lifestyle in an area popular with overseas and interstate students and returns $660 per week, as it is only 500m from University of Newcastle.  You can continue to reap the rewards of this investment or return it to a warm and spacious family home. Being a corner block, you can also explore other options using the two street frontages or extend or add a granny flat (STCA).
 
North Lambton is a well-located suburb, close to transport including Warabrook train station, schools, colleges and University of Newcastle, Jesmond shopping centre, hospitals, golf course, parks and easy access to Newcastle city centre.  
 
The impact of the Covid-19 pandemic has started to affect house prices in this area with current house
asking prices for postcode 2299 decreasing by 2.2% over the last month, after a 7.5% increase over 12 months and 13.6% increase over 3 years.  Unit asking prices have also decreased 5.7% over the month.  Property listings have increased from 57 in January to 66 at end of April 2020, 49 of these listings are houses.
 

Asking rents have declined by 1.1% over the last month for houses in the postcode and unit asking rents have increased by 4.0% over the month.  In comparison, Sydney region asking rents have declined by 4.1% for houses and 2.4% for units.
 

Vacancy rates have increased slightly from to 2.4% in February to 2.6% in March for this postcode.  Implied gross rental yield is a low 1.5% for all houses and 4.9% for units.
 
Could this location rebound with the Newcastle area attracting more housing and infrastructure redevelopment?


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: 5 May 2020   Asking Price     Chg on
prev wk
  Rolling month
% chg
   12 month
% chg
Sydney  All Houses 1,383.4 5.3  1.1%  12.4% 
All Units 705.4 -0.7  -0.6%  3.0% 
Melbourne  All Houses 1,042.7 0.6  0.3%  11.2% 
All Units 562.8 2.6  1.0%  3.8% 
Brisbane  All Houses 641.7 0.3  -1.0%  4.1% 
All Units 373.5 0.2  0.6%  0.4% 
Perth  All Houses 652.6 0.6  -0.9%  -1.9% 
All Units 373.8 0.1  -0.5%  -2.6% 
Adelaide  All Houses 521.9 2.2  0.5%  1.9% 
All Units 307.1 2.0  0.1%  2.1% 
Canberra  All Houses 822.0 -1.0  -0.1%  1.5% 
All Units 439.1 -1.5  -0.1%  4.0% 
Darwin  All Houses 584.3 -1.7  0.1%  -0.4% 
All Units 321.6 -0.3  0.2%  -10.3% 
Hobart  All Houses 573.8 -3.9  -0.7%  12.0% 
All Units 360.2 2.3  -0.3%  17.1% 
National  All Houses 599.8 1.0  0.7%  5.7% 
All Units 392.5 1.1  0.6%  4.2% 
Cap City Average  All Houses 994.3 4.2  0.7%  9.4% 
All Units 574.9 1.3  0.1%  3.0% 

Next update: 12 May 2020

SQM Research Weekly Rents Index
Week ending: 4 May 2020     Rent        Chg on
prev wk
  Rolling month
% chg
  12 month
% chg
Sydney  All Houses 652.4 -3.4  -4.1%  -5.3% 
All Units 480.0 -1.0  -2.4%  -5.0% 
Melbourne  All Houses 534.2 -1.2  -2.7%  -1.7% 
All Units 407.6 -1.6  -2.9%  -3.2% 
Brisbane  All Houses 456.8 -0.8  -1.9%  -0.3% 
All Units 375.2 -1.2  -0.5%  0.8% 
Perth  All Houses 448.9 -2.9  -1.9%  0.4% 
All Units 346.4 -0.4  -0.4%  3.0% 
Adelaide  All Houses 409.5 1.5  0.3%  4.4% 
All Units 314.8 -0.8  0.7%  4.0% 
Canberra  All Houses 635.6 -4.6  -1.8%  0.8% 
All Units 467.4 2.6  0.5%  2.3% 
Darwin  All Houses 461.2 -3.2  -1.8%  -7.6% 
All Units 360.0 -0.0  -0.5%  -3.8% 
Hobart  All Houses 430.4 -4.4  -4.3%  1.4% 
All Units 391.0 0.0  -1.7%  7.8% 
National  All Houses 441.0 2.0  -0.7%  0.0%
All Units 367.0 -1.0  -0.5%  0.0%
Cap City Average   All Houses   539.0 -1.0  -2.5%  -2.5% 
All Units 427.0 0.0 -1.4%  -3.0% 

Next update: 12 May 2020

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