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SQM Research Residential Newsletter 
Tuesday 25 February 2020
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Boom and Bust 2020 Report

Black Dragon's
Words for the Week

“Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything - all external expectations, all pride, all fear of embarrassment or failure - these things just fall away in the face of death, leaving only what is truly important.”

Steve Jobs

Real Estate Realities 

Property market trends: New development outlook 2020

2019 was a tough year for new developments, particularly in the higher density space, but the tide is turning as consumers become better educated and market conditions improve this year.

The very public issues around cladding and building defects – along with falling property prices and tighter credit conditions – saw an ongoing decline in new development activity last year.

2020, however, is looking as if it will be a more positive year for the new development sector, although it’s unlikely to return to the heydays prior to the recent slowdown.

In terms of the volume of stock under construction, the number has fallen now but it still remains close to historic high levels.

Here are six things to look out for in 2020 for new developments:

DISTRESSED PROPERTY OF THE WEEK

2 / 114 Loftus Street, North Perth WA 6006

This 3-bedroom, 1 bathroom townhouse in the inner Perth suburb of North Perth makes a great home for downsizers, First Home Buyers or investors. It has an asking price of $389,000 after an initially being advertised for $399,000 in October 2019. 
 
Consisting of an open plan lounge/dining and kitchen that leads into a paved courtyard, the townhouse is well maintained, you could do some further updating or move straight in.  The 3 bedrooms all have built-in robes, the kitchen is renovated with a pantry and dishwasher and there is a separate laundry room.  The backyard is easy care with a lockable storage room and a carport for one car.  
 
Built in 1990, the townhouse is in a small block of only 3 townhouses and sits on a 180 sqm block with a floor area of 83 sqm.  There are no strata fees with this property but there is a shared building insurance.
 
Current
asking prices for 3-bedroom houses in this postcode has increased 11.1% over 3 years, 9.5% increase over 12 months and 10.2% over the last month.  Unit prices however, had declined 12.2% over the 12 months but there is a small increase of 1.1% over the last month. 
 
North Perth is a vibrant inner city suburb that is 3km from Perth CBD. It is close to the café, entertainment and shopping strips of Leederville, Mt Hawthorn and Mt Lawley and close to transport options and schools. The area has a diverse demographic that includes singles, professional couples and young families which could make this a desirable rental property.  Currently the townhouse is tenanted for $360 per week until Apr 2020. 
 

Asking rents have increased 28.2% over the last 12 months in this postcode for units but there has been a decline in house rentals of 3.2% over 12 months and 11.9% over the last month. The vacancy rate is a low 2.0%.  Gross rental yields of 2.8% can be achieved for houses and 4.4% for units.
 
This could be a quality investment in a location that has seen good rental growth for units and has the right attributes and amenities to attract renters.

 
For a more indepth look at the property market for 2020, subscribe to 
Christopher’s Boom and Bust Report 2020.

SQM website also 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 Fastest Rental Growth (Capital Cities only):





 
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: 25 Feb 2020 Asking Price  Change on
prev wk
   Rolling month
% chg
  12 month
% chg
Sydney  All Houses 1,363.6 1.2  2.3%  9.5% 
All Units 704.1 -5.1  -1.7%  -0.1% 
Melbourne  All Houses 1,009.5 2.0  -2.1%  6.3% 
All Units 556.2 1.2  1.1%  0.9% 
Brisbane  All Houses 649.9 2.5  1.4%  5.0% 
All Units 373.7 0.9  0.3%  -0.5% 
Perth  All Houses 647.4 -3.2  -0.3%  -2.6% 
All Units 373.7 -0.4  -0.6%  -4.0% 
Adelaide  All Houses 524.2 0.9  -0.2%  1.6% 
All Units 303.5 1.0  0.5%  0.2% 
Canberra  All Houses 817.2 -0.8  -0.2%  -0.2% 
All Units 445.8 2.8  1.7%  5.7% 
Darwin  All Houses 566.9 -0.5  -0.5%  -3.0% 
All Units 319.2 1.8  3.7%  -20.7% 
Hobart  All Houses 559.6 0.8  1.5%  12.1% 
All Units 365.7 5.0  6.4%  12.6% 
National  All Houses 595.6 4.8  1.4%  5.1% 
All Units 387.9 0.2  0.5%  3.5% 
Cap City Average  All Houses 977.2 0.4  0.4%  6.9% 
All Units 570.2 -3.3  -0.9%  -0.4% 

Next update: 3 Mar 2020

SQM Research Weekly Rents Index
Week ending: 20 Feb 2020    Rent     Change on
prev week
   Rolling month
% chg
  12 month
% chg
Sydney  All Houses    706.2 -1.2  2.1%  -0.4% 
All Units 501.5 -0.5  0.5%  -1.4% 
Melbourne  All Houses 552.4 -1.4  2.0%  1.6% 
All Units 424.8 1.2  2.2%  1.5% 
Brisbane  All Houses 472.2 0.8  -0.4%  3.2% 
All Units 378.2 -0.2  0.1%  1.3% 
Perth  All Houses 445.8 -1.8  0.8%  0.3% 
All Units 337.2 0.8  0.2%  2.4% 
Adelaide  All Houses 406.1 -1.1  1.2%  3.4% 
All Units 309.4 -0.4  -1.1%  3.4% 
Canberra  All Houses 633.7 -0.7  0.3%  -2.2% 
All Units 464.7 0.3  -0.1%  2.4% 
Darwin  All Houses 453.4 -1.4  -3.4%  -8.5% 
All Units 370.6 -0.6  -2.0%  -3.3% 
Hobart  All Houses 452.2 0.8  -2.8%  6.8% 
All Units 413.4 -1.4  -2.7%  15.2% 
National  All Houses 448.0 -3.0  -0.7%  0.4% 
All Units 370.0 -1.0  -1.1%  1.4% 
Cap City Average   All Houses 564.0 -5.0  0.9%  0.5% 
All Units 442.0 0.0 0.5%  0.5% 

Next update: 28 Feb 2020

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