Copy
SQM Research Weekly Newsletter
View this email in your browser

SQM Research Residential Newsletter - Tuesday 20 August 2019
Facebook
Twitter
LinkedIn
Website
Property Valuations
Research Reports
Distressed Properties Report
Funds Research
Boom and Bust 2019 Report

Black Dragon's
Words for the Week

“The single biggest problem in communication is the illusion that it has taken place."

George Bernard Shaw
Real Estate Realities 

NZ banned foreign ownership just over a year ago. Does Australia need to follow suit?

It’s been just over a year since NZ banned foreign ownership of housing.

With a market that largely parallels Australia’s own in regards to laws, policies, affordability and availability problems, has the restriction on foreign investment actually worked when it comes to enabling first-home buyers and native New Zealanders to get a foothold in the residential market? 

Home ownership has reached historical low levels in New Zealand, with ownership the lowest it’s been since 1951. Only a quarter of adults under the age of 40 own their own home now, compared to half in 1991. 

In the 2017-18 financial year, immigration to New Zealand grew by 19% and with limited housing supply, Jacinda Ardern’s Labour government was under pressure to introduce dramatic changes to housing policy.

The Overseas Investment Amendment Act 2018 restricts overseas buyers from purchasing residential property in New Zealand. Introduced last October, it might already have had an impact in the latest housing statistics, with significant declines in residential sales.

Bindi Norwell, chief executive at REINZ says: “The number of properties sold in New Zealand during June was the lowest for the month of June in five years.

Read More...

We've upgraded our website!

We're excited to let you know about some changes we’ve made to our SQM Research webpage.

We’ve made it easier to navigate and find our
Property market data and research; our Shares and Equities information and our Managed Funds research and Ratings Reports.


We have also made it easier to find our Publications, media releases and news items to keep you abreast of the latest developments in property, shares and managed funds.

Our free property data and research reports in particular have been enhanced with more user-friendly charts and graphs.
 
Why not head to our
webpage and take a look around?


 
CHART OF THE WEEK

Over the next few weeks, SQM Research is going to run with “Chart of the Week”.  We will gauge the interest of the new section in our newsletter. And if there is interest, we will keep it a permanent feature. Feel free to write in and provide feedback.
 
For the first chart, we would like to highlight one of SQM’s property charts – the Price per SQM Co-efficient curve™ - one of the many different metrics that are helpful when trying to understand property price behaviour and valuations.
 
The chart below is a scatterplot chart that plots price per sqm of sold properties. In this example, we have postcode
2200, which is the locality of Bankstown, Sydney.. This chart reveals the relationship between sold prices verses land size. Essentially, the lower the land size, the higher the price per square metre. This relationship isn’t straight line. Rather there is an exponential relationship, creating the curve.

The ramification here is the more pronounced the curve, the higher the probability of making a risk free profit in the area such as subdividing and/or developing.



You can click on or hover over the particular dot points of the chart, this will highlight the property for that sale.  In the example above, 32 Brancourt Ave, Bankstown (red dot) with a land size of 930 sqm, has a per sqm of $1,720 as it sold for $1.6m in 2018.  And unit 3/21 Myrtle Road, Bankstown (pink dot) with a land size of 151 sqm, has a per sqm of $2,881 as it sold for $435,000.

SQM Research has this mapped out for every postcode in the country. You can find a
link to the curve on the front page of the property section of our website. Just enter in an address, suburb or postcode in the prompt.

 

DISTRESSED PROPERTY OF THE WEEK

Unit 5 / 474 Hamilton Road, Chermside QLD 4032

This week’s distressed property takes us to Chermside QLD 4032, 9km north of Brisbane’s CBD. 

Unit 5, 474 Hamilton Road is a 2-bedroom, 1 bathroom apartment situated on the 2nd floor of a small complex and is a total of 113 sqm in size with 71 sqm internal floor space.  The property has been renovated and is tiled throughout, with two good size bedrooms with built-ins, a kitchen with lots of bench space and a lounge room leading to a balcony the length of the unit.
 
The apartment is well located close to public transport, Prince Charles Hospital, Westfield Chermside Shopping Centre and schools.

The apartment has been on the market since 19 April 2019 for offers over $319,000.  It last sold 12 years ago for $243,000 in January 2007 and is now selling for $295,000.


Asking Prices for apartments in postcode 4032 have increased 4.2% over the 12 months however, there has been a decline of 1.0% over the month.  Based on statistics, you would expect to pay between $400,000 to $416,000 for apartments in this area.
 

Asking Rents have had a minor decline of 0.2% over the month, after a 4.1% increase over 12 months.  Overall, statistical data indicates rents of $390 to $395 per week may be achieved for apartments in this area. Currently this apartment is rented at $315 per week until July 2020.  This investment can offer a gross rental yield of 4.9%.  Current Vacancy rates are low at 2.0% and have been declining from its one time high of 5.9% in April 2017.  This time last year the vacancy rate was 2.5%.

This apartment has now been on the market for over 120 days and the vendor has “drastically reduced to sell”. 
 
SQM Research has recently re-vamped and enhanced our website and has introduced a free
Total Property Listings chart with a split by Days on Market (DOM).  For postcode 4032, the DOM chart shows at July 2019, there were 195 units listed for sale and 100 houses (total 295).  Of the 295 properties, 138 have now been listed for over 180 days (46.7%) and 61 properties (20.6%) were listed for 90 to 180 days on the market, which is where 5/474 Hamilton Rd sits.


 

The Days on Market is quite high in this area, indicating it is still a buyer’s market in this postcode.  After a long period of time on the market, this vendor may have realised he is less likely to get the original asking price he advertised for. 
 
Further, there are currently 58 properties out of 295 (19.6%) that are listed for under 30 days in this postcode whereas in May 2019 there were 34 properties (out of a total 301 listings) listed for under 30 days (11.29%) which indicates that vendors may be getting more comfortable with this market and are starting to list their properties.  Buyer demand is slowly returning, amid APRA’s relaxing of lending policy and RBA drops in interest rate lending, and this may absorb some of the older listings that have been sitting there for 90 days plus.  With spring around the corner, we may see this demand grow.
 
Queensland’s annual
population growth rate has also steadily increased by 1.7% (2017-2018) which makes the Brisbane housing market look even more promising.

The SQM website also features more free property data that is now more interactive, easier to navigate and user-friendly, so k
eep monitoring this market’s growth at SQM Research’s free property data. 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: 20 Aug 2019    Asking Price     Chg on
prev wk
   Rolling month
% chg
   12 month
% chg
Sydney All Houses 1,271.1 -4.3  3.2%  -5.1% 
All Units 695.1 -3.7  -0.5%  -3.6% 
Melbourne All Houses 938.7 0.4  0.5%  -4.0% 
All Units 539.0 0.7  -0.1%  -1.7% 
Brisbane All Houses 617.9 0.6  0.2%  0.3% 
All Units 371.1 -0.3  -0.3%  -2.3% 
Perth All Houses 647.4 0.0  -1.1%  -2.1% 
All Units 381.6 -0.1  -0.6%  -2.6% 
Adelaide All Houses 513.2 -0.4  -0.4%  2.2% 
All Units 298.3 -0.8  -0.4%  -1.3% 
Canberra All Houses 812.0 8.1  2.1%  1.8% 
All Units 431.1 -0.3  -0.4%  4.8% 
Darwin All Houses 591.3 -0.3  0.0%  0.6% 
All Units 353.3 -0.1  -0.7%  -3.5% 
Hobart All Houses 508.1 -1.4  -1.4%  4.7% 
All Units 305.8 -0.8  -0.9%  3.2% 
National All Houses 568.7 0.1  0.4%  -8.0% 
All Units 376.2 -1.0  -0.1%  -4.7% 
Cap City Average All Houses 919.5 -7.1  1.4%  -3.2% 
All Units 561.5 -1.8  -0.8%  -3.3% 

Next update: 27 Aug 2019

SQM Research Weekly Rents Index
Week ending: 20 Aug 2019       Rent             Chg on
 prev wk
   Rolling month
% chg
   12 month
% chg
Sydney All Houses 681.6 -3.6  -0.6%  -3.3% 
All Units 498.5 -0.5  -0.6%  -2.9% 
Melbourne All Houses 525.9 0.1  -1.7%  0.4% 
All Units 421.2 -0.2  -0.5%  2.7% 
Brisbane All Houses 465.3 1.7  0.2%  3.1% 
All Units 375.7 1.3  0.3%  1.1% 
Perth All Houses 435.4 -0.4  -0.1%  2.6% 
All Units 338.2 -0.2  -0.3%  4.6% 
Adelaide All Houses 399.4 0.6  -0.1%  4.1% 
All Units 311.7 -0.7  0.7%  4.7% 
Canberra All Houses 603.3 -7.3  -3.3%  -3.5% 
All Units 457.6 -1.6  -0.9%  4.6% 
Darwin All Houses 512.7 -0.7  -2.9%  -0.4% 
All Units 377.1 2.9  2.1%  -6.9% 
Hobart All Houses 450.0 5.0  -0.1%  12.6% 
All Units 386.7 -6.7  -5.2%  6.4% 
National All Houses 440.0 0.0 -0.5%  0.9% 
All Units 366.0 -2.0  -0.5%  1.9% 
Cap City Average All Houses 545.0 -1.0  -1.1%  -0.5% 
All Units 439.0 1.0  -0.5%  0.0%

Next update: 28 Aug 2019

Facebook
Twitter
LinkedIn
Website
Copyright © 2019 SQM Research, All rights reserved.

Our mailing address is: Level 16, 275 Alfred Street, North Sydney, NSW 2060, Australia

unsubscribe from this list