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SQM Research Residential Newsletter - 
Tuesday 14 July 2020
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Black Dragon's
Words for the Week

"This is the land I fought for liberty, now when we fight, we fight for bread! Here is the thing about equality, everyone’s equal when they’re dead!

Victor Hugo,
Les Misérables

Real Estate Realities 

The Home Buyer 'must haves' post-COVID-19

A crystal ball would be required to predict what life will be like after COVID-19, but when it comes to what home buyers want in a post-pandemic world, patterns are beginning to emerge. 

New keyword search data from realestate.com.au shows a significant jump in nine work-from-home-related property features during the pandemic – illustrating that home buyers are preparing for a future involving more time in the nest.

Nationally, outdoor space was front of mind for house hunters between April and June this year, with the keyword search for ‘outdoor’ showing a 41% increase compared to pre-pandemic times (January-March 2020).

The large increase in searches for outdoor areas is likely due to people looking for more space after being cooped up during lockdown, said realestate.com.au chief economist, Nerida Conisbee.

 

Vacancy Rates Decreased in June
by Louis Christopher, CEO

SQM Research today has revealed the national residential rental vacancy rate recorded a decrease over the month from 2.5% in May to 2.2% in June 2020.  The financial year ended with the total number of vacancies Australia-wide now at 77,132 vacant residential properties.  This time last year, the national vacancy rate was slightly higher at 2.3%.

All capital cities recorded declines in vacancy rates over the month.  Sydney currently has the highest vacancy rate in the nation at 3.8%, having declined by 0.2%, followed by Melbourne with a vacancy rate of 3.0%, declining by 0.1%.  Hobart’s vacancy rate is the lowest in the nation at 0.9%, having declined by 0.4% over the month. 

Darwin recorded the largest decline in rental vacancy rate of 0.5% to now record a low vacancy rate of 1.8%.  




Even among the capital city CBD locations, there have been declines in vacancy rates over the month.  Sydney CBD has dropped to 13.8%, down from 16.2% in May, Melbourne’s CBD and Melbourne Southbank have also declined to 8.8% and 16.2% respectively.  Adelaide CBD has dropped to 7.1% and Perth CBD is now 5.3%.

However, Brisbane CBD’s vacancy rate has increased from 13.3% in May to 14.0% and Sydney’s
Palm Beach is now 18.0%, up from 16.7% in May.


Asking Rents

Over the month, Capital City asking rents decreased 3.1% for houses and 4.5% for units for the week ending 12 July 2020 to record asking rents of $534 per week for houses and $421 per week for units. 

Sydney Melbourne and Adelaide recorded declines in asking rents for both houses and units over the month. Whilst Brisbane and Perth continue to record increases in house and unit asking rents.  Canberra and Darwin have had declines in house asking rents but recorded increases in unit asking rents.


Commentary

We believe the surprise fall in vacancy rates is due to Airbnb property owners giving up on the longer term leasing market and moving back to short term leasing, especially in light of the July school holiday period and the opening of some state borders.

The fall in rents over the same period for a numbers of our capital cities suggests that the weakness in the rental market remains. 

Going forward, our expectation is the Australian rental market will remain weak for the duration of 2020 or until such time as the international border reopens and we as a community have past the worst of COVID19.



AUCTION LISTINGS* for week ending 19 July 2020


CITY

Saturday

Rest of Week

 

STATE

Saturday

Rest of Week

Link

Sydney 482 84   All NSW 540 129 Auctions in NSW 
Melbourne* 526 38   All VIC 554 42 Auctions in VIC 
Brisbane 46 13   All QLD 91 52 Auctions in QLD 
Perth 8 0   All WA 8 3 Auctions in WA 
Adelaide 37 10   All SA 37 14 Auctions in SA 
Canberra 21 8   All ACT 21 8 Auctions in ACT 
Darwin 2 4   All NT 2 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 12 July 2020

Full individual auction results can be found on our website: 


 

DISTRESSED PROPERTY OF THE WEEK

   501 / 243 Pyrmont Street, Pyrmont NSW 2009

This 2-bedroom, 2-bathroom apartment is currently listed for sale with an asking price of $849,000 in Pyrmont, 2km west of Sydney’s CBD.  The apartment was first advertised for sale in June 2019 and was last sold for $412,000 in October 2004. 
 
The apartment has a spacious 106sqm layout featuring a split-level design located on the 4th and 5th levels and enjoys a sunny and bright easterly aspect with extra high ceilings, polished timber floors and timber features throughout, adding to the charm and character of this residence. 
 
This stylish apartment offers low maintenance city living and is in a prime location, close to the light rail,  restaurants, bars and theatres, Star Casino complex, Sydney Fish Market, Sydney Convention Centre and the Darling Harbour precinct.
 
The apartment is in the landmark 'Goldsbrough Mort' complex, an impressive historic building built in c1893 and retains the industrial character and elegance of the late 19th century.  Facilities include 25m pool, spa, sauna, gym and 24-hour concierge plus full security throughout the building.  Current Strata rate is approx. $2,500 per quarter.
 
Apartments in this postcode have a current price range from $790k to $1.07m.  As a comparison, apartment 532 in this complex sold for $880k in March 2020.  Over the last month,
asking prices for apartments have had a 7.5% increase.  
 
The percentage of renters in this area is high at 62.57% (ABS 2016 Census) and unfortunately, this area’s
Vacancy rates has increased from 3.3% in March to a high 9.2% in June.  This area, along with the Sydney CBD has experienced one of the largest residential vacancy rate increases due to a mass exodus of tenants in the past few months due to loss of employment in CBD areas and a drop-off in international students due to the Covid-19 pandemic.  As a result, asking rents have declined by 2.6% over the month.  This postcode still offers a good gross rental yield of 4.2% for units. 
 
Previously this area presented good investment opportunities for investors and has attracted overseas renters however, in the current climate, this apartment would be better suited to owner-occupiers seeking a lifestyle of convenience and the excitement of city life. 

 
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: 14 Jul 2020   Asking
Price
   Chg on
prev wk
  Rolling month
% chg
  12 month
% chg
Sydney  All Houses   1,384.6 9.8  0.6%  12.2% 
All Units 688.0 -2.4  -1.2%  -1.3% 
Melbourne  All Houses 1,024.1 -0.1  -0.9%  9.5% 
All Units 570.4 0.6  0.8%  5.9% 
Brisbane  All Houses 644.9 0.8  0.4%  4.4% 
All Units 379.7 0.0  1.0%  2.0% 
Perth  All Houses 671.8 -0.8  0.7%  2.4% 
All Units 379.1 -0.9  -0.3%  -1.4% 
Adelaide  All Houses 524.6 -1.3  -0.6%  1.9% 
All Units 309.4 0.0  0.4%  3.2% 
Canberra  All Houses 822.9 -5.8  -0.0%  3.6% 
All Units 442.2 -0.1  0.5%  2.4% 
Darwin  All Houses 575.4 -2.0  -0.3%  -1.5% 
All Units 343.4 0.1  -0.7%  -3.5% 
Hobart  All Houses 570.6 -4.9  0.2%  10.3% 
All Units 371.8 -0.9  3.4%  21.6% 
National  All Houses 605.5 1.9  0.7%  6.3% 
All Units 393.2 -2.7  0.6%  4.5% 
Cap City Average  All Houses 993.3 7.9  0.9%  9.2% 
All Units 569.0 -1.6  -0.5%  0.6% 

Next update: 21 Jul 2020

SQM Research Weekly Rents Index
Week ending: 12 Jul 2020     Rent        Chg on
prev wk
  Rolling month
% chg
    12 month
% chg
Sydney  All Houses   636.2 -4.2  -0.8%  -7.3% 
All Units 470.5 -1.5  -1.3%  -6.2% 
Melbourne  All Houses 525.7 -2.7  -1.3%  -1.7% 
All Units 401.6 -1.6  -0.8%  -5.1% 
Brisbane  All Houses 467.8 0.2  1.2%  0.7% 
All Units 380.9 0.1  0.8%  1.7% 
Perth  All Houses 459.9 5.1  2.2%  5.6% 
All Units 351.2 -1.2  0.5%  3.5% 
Adelaide  All Houses 410.4 -0.4  -0.3%  2.6% 
All Units 316.1 -0.1  -0.3%  2.1% 
Canberra  All Houses 617.5 -1.5  -0.7%  -1.0% 
All Units 471.6 -0.6  1.0%  2.2% 
Darwin  All Houses 481.6 -2.6  -0.8%  -8.8% 
All Units 363.4 6.6  2.5%  -1.6% 
Hobart  All Houses 434.2 -2.2  0.2%  -3.6% 
All Units 371.3 0.7  -1.8%  -9.0% 
National  All Houses 448.0 1.0  1.1%  1.4% 
All Units 368.0 1.0  -1.3%  0.0%
Cap City Average  All Houses 534.0 -3.0  -0.7%  -3.1% 
All Units 421.0 -2.0  -0.9%  -4.5% 

Next update: 20 Jul 2020

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