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SQM Research Newsletter - Tuesday 9 July 2019
Property Valuations
Research Reports
Distressed Properties Report
Funds Research
Boom and Bust 2019 Report

Black Dragon's
Words for the Week

"Life isn't about finding yourself. Life is about creating yourself."

George Bernard Shaw
Real Estate Realities 

Build to rent could shake up real estate but won't take off without major tax changes 

In the wake of slumping demand for apartment building, it’s little wonder the multi-unit housing industry has been eagerly eyeing a possible new residential product: “build-to-rent”.

In fact, the latest figures show that apartment-building construction starts were down 36% in 2018 from 2016. But how much will this little-known type of housing solve our housing problems?

Build-to-rent won’t be a silver bullet solution for Australia’s housing affordability stress, but it does have potential to tick the box on several important public policy objectives. These include widened housing diversity, enhanced build standards, and a better-managed, more secure form of private rental housing.

But for this to happen, Australia’s tax settings need adjustment.

What is ‘build-to-rent’?

This refers to apartment blocks built specifically to be rented, usually at market rates, and held in single ownership as long-term income-generating assets.

The enduring owner might be, for instance, an insurance company, an Australian super fund, a foreign sovereign wealth fund, a private equity firm, or the building’s developer.

Although new in Australia, build-to-rent is quite common in many other countries. Under its North American name, “multi-family housing”, the format has generated more than 6.3 million new apartments since 1992 in the US alone. And in the UK, a build-to-rent sector has led to 68,000units built or under construction since 2012.



46 Stockdale Crescent, Wembley Downs WA 6019 

Built in 1969, this 2-bedroom duplex/semi-detached home is available to move right in or renovate and develop further.  With some 77 sqm of internal living space and multiple outdoor entertaining areas, it offers a great lifestyle in this sought-after suburb of Wembley Downs, approx. 11 km from Perth's CBD.
This property offers an open-plan designed kitchen, living and dining area; 2 spacious bedrooms, a separate laundry and a split system air conditioner.
Located within walking distance to several highly sought after schools - Hale School, Newman College, Churchlands Senior High School - and only a short drive to the redeveloped Scarborough Beach and Floreat Forum, means you are never too far away from the action.
The property has been on sale since May 2019 and is currently listed for sale with a price of "From $450,000".   It last sold for $460,000 in October 2008.  For a comparison, the adjacent duplex at 44 Stockdale Crescent last sold for $585,000 in August 2013.  The vendor is motivated and says it must be sold.

Asking prices for postcode 6019 currently range from $497,000 for all units to $699,300 for 3 bedroom houses.  Currently unit prices in the area are showing growth of 4.5% over the month, after a 4.1% increase over the quarter.  House prices for 3-bedders however, show minor declines of 0.5% over the month, after a 0.9% increase over 12 months.
Investors could rent this home for approx. $384 to $470 per week. 
Weekly rents for 3-bedder houses in the postcode have declined 6.7% over the month.  Unit weekly rents declined 3.8% over the month however, over the quarter there has been an increase of 3.7%, after a 3-year increase of 6.2%.  Vacancy rates sit at 3.5%.  Investors can earn Gross rental yields of 3.79% for houses and 4.0% for units.
Recently some mining towns in WA may have shown signs of growth however, the Perth property market is still struggling to show signs of improvement since the downturn in 2014. We saw small increases in 2017, the recent Interest rate cuts may help with a further turnaround.  Follow this market’s progress,
 check out SQM Research’s free property data at SQM’s website. Also consider the Property Valuation product for more in-depth data and property price estimator.


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.

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SQM Research Weekly Asking Prices Index
Week ending: 9 Jul 2019 Asking Price Chg on
prev wk
Rolling month
% chg
12 month
% chg
Sydney All Houses 1,227.0 -9.3  0.0%  -8.9% 
All Units 693.3 0.4  1.2%  -4.4% 
Melbourne All Houses 937.7 3.1  0.1%  -5.2% 
All Units 539.0 -0.5  -0.4%  -1.6% 
Brisbane All Houses 617.2 -0.1  -0.1%  0.0% 
All Units 372.2 0.4  0.1%  -2.3% 
Perth All Houses 657.4 -1.3  0.6%  -2.0% 
All Units 386.2 0.3  0.4%  -2.4% 
Adelaide All Houses 514.9 1.2  0.5%  1.6% 
All Units 300.6 -1.4  -0.4%  0.1% 
Canberra All Houses 794.3 -1.3  -1.9%  -2.0% 
All Units 430.6 -0.0  -0.1%  6.4% 
Darwin All Houses 583.9 0.9  -1.3%  -1.2% 
All Units 355.7 0.1  -0.1%  -5.2% 
Hobart All Houses 518.4 0.1  -0.4%  5.5% 
All Units 305.9 -1.4  0.6%  2.7% 
National All Houses 565.6 -1.1  -0.3%  -0.5% 
All Units 374.9 -0.2  0.4%  -0.2% 
Cap City Average All Houses 904.9 -4.0  -0.4%  -5.7% 
All Units 562.9 -0.7  0.5%  -3.1% 
Next update: 16 Jul 2019
SQM Research Weekly Rents Index
Week ending: 4 Jul 2019   Rent  Chg on
prev wk
Rolling month
% chg
12 month
% chg
Sydney All Houses 683.9 -1.9  -1.1%  -3.6% 
All Units 502.3 -0.3  -0.2%  -3.8% 
Melbourne All Houses 535.9 -1.9  -0.8%  2.4% 
All Units 422.5 -0.5  -0.3%  2.6% 
Brisbane All Houses 463.0 1.0  0.8%  2.5% 
All Units 374.1 -0.1  0.8%  1.2% 
Perth All Houses 439.5 -2.5  -2.5%  3.6% 
All Units 337.7 0.3  0.4%  3.8% 
Adelaide All Houses 399.8 1.2  1.5%  4.6% 
All Units 309.4 0.6  1.1%  3.1% 
Canberra All Houses 626.0 2.0  1.2%  -1.1% 
All Units 461.1 0.9  0.4%  4.5% 
Darwin All Houses 528.6 3.4  4.8%  -2.3% 
All Units 367.6 -0.6  -1.1%  -9.2% 
Hobart All Houses 441.1 1.9  2.8%  10.5% 
All Units 403.6 13.4  5.9%  16.1% 
National All Houses 441.0 1.0  0.2%  1.8% 
All Units 366.0 -2.0  -1.9%  3.4% 
Cap City Average All Houses 549.0 -1.0  -1.1%  0.2% 
All Units 441.0 0.0 0.0% -0.7% 
Next update: 12 Jul 2019
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