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SQM Research Residential Newsletter - 
Tuesday 4 August 2020
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“I discovered that I hate working with idiots, especially when I'm working alone at home in isolation.”

Anthony T Hincks

Real Estate Realities 

Victoria stage 4 restrictions: How COVID lockdown will affect real estate, inspections, auctions

Property inspections will only be able to be conducted online under Melbourne’s tough stage four restrictions in a move experts say will essentially grind the market to a halt.

A post on Premier Daniel Andrews’ Facebook page last night listed “property and real estate” among businesses that will close for at least 6 weeks from 11.59pm Wednesday, with “online inspections and auctions permitted”.

A Victorian Government spokeswoman has confirmed this as correct, noting auctions will also need to shift online in regional Victorian property markets under its stage three lockdown. But private one-on-one inspections will still be allowed regionally.

Real Estate Institute of Victoria president Leah Calnan said it was “highly unlikely we’ll see sales transactions over the six weeks” due to the ban on physical inspections as “purchasers don’t buy properties from virtual tours”.

“I suspect properties will probably remain on the market, but I don’t anticipate we’ll see many new properties go to market in the six-week lockdown,” she said.

Ms Calnan said the organisation would push the government to reconsider the tough restriction, particularly in the rental space, as providing shelter should be considered an essential service.

“We’ve got tenants (impacted by COVID-19) moving out of properties from an affordability point of view, and therefore needing to inspect other properties,” she said.

“The impact is on many levels - not only financial impact to state’s economy, but also the inability to be able to provide accommodation across the state by selling or leasing.”

 

PROPERTY LISTINGS INCREASED IN JULY

By Louis Christopher, CEO

Figures released today by SQM Research reveal national residential property listings increased in July by 3.8% from 301,140 listings in June 2020 to 312,680. Compared to 12 months ago, listings were down by 1.2%.

Nearly all capital cities experienced increases in property listings over the month except for Darwin which recorded a 1.4% decrease.

The largest listings increase was in Sydney at 8.7% followed by Canberra with 6.4%.  Melbourne and Brisbane both recorded a 5.9% increase. Adelaide and Perth experienced smaller increases of 2.4% and 3.2% respectively.

Year-on-year listings show more significant increases in Sydney and Melbourne at 10.7% and 20.7% respectively.  All other capital cities recorded declines over the 12 months. Darwin especially recorded high declines of 21.4% and Hobart declined by 10.0%.

Stock on Market Table:


Commentary

It is somewhat abnormal to record a rise in listings during the winter months. Normally, falls are recorded. This could have been generated by the lifting in restrictions over May and June, enticing sellers to the market. The year on year results for Sydney and Melbourne tell the story with significant rises, particularly for Melbourne.  Such a reading normally is associated with a weakening market and no question, this is what is occurring in our two largest cities. Dwelling prices are falling. Not crashing to date, per se. But in light of the unprecedented restrictions placed in Melbourne, our expectations are that more prices falls in can be expected in coming months.  Outside the two capital cities, the market is more balanced and indeed we are seeing an increase in demand for housing across regional Australia.

Asking Prices

Capital City average asking prices decreased by 0.2% for houses and 0.8% for units, over the month to 4 August. Average unit asking prices are now at $565,800 and houses $983,900.  

Compared to a year ago, the capital city asking prices posted an increase of 7.0% for houses but a 0.1% decrease for units.
 
Over the month, Sydney, Melbourne, Adelaide and Hobart all recorded marginal asking price decreases in both houses and units, with Sydney recording the highest decline in unit asking prices of 1.0% and Canberra recording the highest decline in house prices of 2.0%.  However, Canberra’s asking prices for units increased by 0.6%, as did Darwin with a 1.0% increase.  Perth’s unit prices declined by 0.1% and house prices remained stable.

Brisbane was the only capital city to record increases in house prices of 0.3%.

Year on year, most capital cities were recording significant increases in house and unit asking prices with the exception of Darwin which experienced declines in house and unit prices of 3.1% and 2.2% respectively. Sydney and Melbourne recorded 9.0% increase in house price growth as did Hobart with large increases of 11.5% in house prices and 21.7% in unit prices.



AUCTION LISTINGS* for week ending 9 August 2020


CITY

Saturday

Rest of Week

 

STATE

Saturday

Rest of Week

Link

Sydney 603 86   All NSW 651 126 Auctions in NSW 
Melbourne* 236 32   All VIC 252 36 Auctions in VIC 
Brisbane 79 26   All QLD 119 68 Auctions in QLD 
Perth 7 7   All WA 8 9 Auctions in WA 
Adelaide 32 21   All SA 32 23 Auctions in SA 
Canberra 38 13   All ACT 38 13 Auctions in ACT 
Darwin 1 5   All NT 1 5 Auctions in NT 
Hobart 0 0   All TAS 0 0 Auctions in TAS

*Note: The above counts of auctions represent most recent known auction dates for the coming week.  As at 8 July, Melbourne auctions are back on-line.
 

AUCTION RESULTS for week ending 2 August 2020

Full individual auction results can be found on our website: 


 

DISTRESSED PROPERTY OF THE WEEK

   59 Black Street, South Mackay, Qld 4740
 
The vendors of 59 Black Street, South Mackay, Queensland say they want this house sold as they are considering travelling so now could be a good time to grab a well-priced 3 bedroom house in this regional Queensland town.

The property has been on sale since March 2020 and is now selling for offers over $280,000. It last sold for $305,000 in October 2008.

 
This centrally located property is mostly renovated including an updated bathroom, fresh paint and floor coverings throughout and features 3 bedrooms (main with air-conditioning), a spacious air-conditioned lounge/dining through to the kitchen which does need an update.   Downstairs is fully enclosed and features a large multi-purpose room with sliding door access to the concreted driveway, and there is an additional spacious room plus storage, a laundry and second toilet.
 
The house is well positioned on a large 821 sqm block with a covered entertaining area and is securely fenced with no rear neighbours, and a gate to a park and children’s playground.  This is an opportunity to buy into a highly sought-after area which is central to all amenities including Parkside Shopping Plaza, Caneland Central, cafes, sporting clubs and the South's Leagues Club is within walking distance.  Mackay Airport is also nearby.

This family home represents an easy-care lifestyle in a central location and would suit owner-occupiers or investors alike.


House Asking Prices for 3-bedders have decreased over the month by 0.3% after a 3.0% increase over 3 years.  Recent sales of 3-bedroom houses in postcode 4740 range from $340k to $395k.  Unit prices however have increased by 1.5% over the month.
 
As reported in SQM’s newsletter last week, the housing markets in regional Australia seem to be defying the rental trends seen in some capital cities, and Mackay is no exception.  SQM’s current
Asking rents in this postcode indicates weekly rents have increased by 7.3% over the month for 3-bedders, after a huge 37.1% increase over 3 years.  Estimated rents of approximately $390 - $410 per week may be achieved for 3 bedroom houses.  Vacancy rates in this postcode sits at a low 0.8% after recording 3.9% three years ago in June 2017.  A gross rental yield of 5.9% can be achieved for 3 bedroom houses in this area and 6.7% for units.
 
Whilst Central Queensland has suffered in the past with the mining downtown,
Mackay however, has added billions to QLD’s economy in the last financial year.  Mackay doesn’t just rely on a single mining economy but also includes associated industries such as mining equipment, technology and services and agriculture (sugar cane, beef, forestry)

With potentially good price growth and rental returns, could this area be one of the boom locations?

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.


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: 4 Aug 2020 Asking Price Chg on
  prev wk
 Rolling month
% chg
12 month
% chg
Sydney  All Houses  1,371.3 -8.7  -0.3%  9.0% 
All Units 683.3 -0.2  -1.0%  -2.6% 
Melbourne  All Houses 1,023.1 2.1  -0.1%  9.0% 
All Units 566.9 -3.0  -0.5%  5.3% 
Brisbane  All Houses 646.3 2.6  0.3%  4.8% 
All Units 376.7 -0.8  -0.8%  1.4% 
Perth  All Houses 671.9 0.0  -0.1%  3.5% 
All Units 380.2 0.6  0.0%  -0.5% 
Adelaide  All Houses 525.6 -0.6  -0.1%  2.4% 
All Units 307.4 -1.2  -0.6%  2.6% 
Canberra  All Houses 812.4 -4.4  -2.0%  0.7% 
All Units 444.8 0.1  0.6%  2.8% 
Darwin  All Houses 574.1 -0.7  -0.6%  -3.1% 
All Units 346.9 1.6  1.0%  -2.2% 
Hobart  All Houses 573.7 -1.5  -0.3%  11.5% 
All Units 372.5 0.2  0.0%  21.7% 
National  All Houses 604.1 0.3  0.1%  6.7% 
All Units 394.2 -0.6  -0.4%  4.5% 
Cap City Average  All Houses 983.9 -1.0  -0.2%  7.0% 
All Units 565.8 -1.0  -0.8%  -0.1% 

Next update: 11 Aug 2020

SQM Research Weekly Rents Index
Week ending: 4 Aug 2020     Rent      Chg on
  prev wk
 Rolling month
% chg
  12 month
% chg
Sydney  All Houses    634.0 -4.0  -1.0%  -7.8% 
All Units 466.3 -1.3  -1.2%  -6.8% 
Melbourne  All Houses 520.8 -2.8  -1.4%  -1.3% 
All Units 397.3 -1.3  -1.4%  -5.8% 
Brisbane  All Houses 466.2 -1.2  -0.3%  0.9% 
All Units 380.0 0.0  -0.2%  1.6% 
Perth  All Houses 469.5 0.5  3.2%  8.6% 
All Units 352.8 1.2  0.1%  3.8% 
Adelaide  All Houses 413.2 0.8  0.6%  3.7% 
All Units 318.4 0.6  0.7%  2.1% 
Canberra  All Houses 627.7 8.3  1.4%  2.2% 
All Units 474.1 0.9  0.4%  3.0% 
Darwin  All Houses 490.6 5.4  1.3%  -5.4% 
All Units 359.7 -3.7  0.8%  -3.1% 
Hobart  All Houses 441.0 3.0  1.1%  -1.6% 
All Units 392.5 10.5  5.9%  -1.4% 
National  All Houses 457.0 2.0  2.2%  3.9% 
All Units 367.0 0.0 0.0% 0.0%
Cap City Average   All Houses 534.0 -4.0  -0.6%  -2.4% 
All Units 419.0 -1.0  -0.9%  -4.6% 

Next update: 12 Aug 2020

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