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SQM Research Newsletter - Tuesday 30 July 2019
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Black Dragon's
Words for the Week

"I really rebel against this idea that politics has to be a place full of ego and where you're constantly focused on scoring hits against each one another. Yes, we need a robust democracy, but you can be strong, and you can be kind."

Jacinda Ardern,
NZ Prime Minister
Real Estate Realities 

Dangerous to human health: that’s a housing problem much bigger than a few high-profile apartment blocks

Australia’s biggest city is abuzz with news of yet another housing development declared unsafe for human habitation. This time it is apartments built on a toxic dump the local council fears was not properly cleaned up.

In the past 12 months three other significant Sydney developments have all been evacuated due to major building defects. The plight of residents forced from their homes has focused national attention on issues to do with shoddy apartment construction, such as poor regulation and lax enforcement.

What gets less media attention is a greater systemic problem: the fact that hundreds of thousands of Australians are forced into inadequate or unhealthy housing by high housing costs. Thousands are evicted by landlords wanting higher rents. Some end up homeless.

These problems are underlined by the latest data on housing occupancy and costs from the Australian Bureau of Statistics.

Growing disparities

The figures show Australia has an excess of housing on average, but not enough for those in the greatest need.

Across Australia, an estimated 116,000 people are homeless while more than 300,000 households would like a home with an extra bedroom. Yet there are about 12 million empty bedrooms. One-third of all Australian homes have one unused bedroom. Another third have two, and 13% have three or more.

As you might expect, home owners are more likely to have an excess of bedrooms, while renters are more likely to need more space – and we’re increasingly a nation of renters than owners. Now 32% of households rent, compared with 27% a decade ago.

The main reason for all of this, unsurprisingly, is escalating housing prices.

Read More...

DISTRESSED PROPERTY OF THE WEEK

25 Clissold St, Katoomba NSW 2780 

This charming, north-facing cottage situated in Katoomba, a suburb in NSW’s Blue Mountains, could be a great renovation project or an ideal site to build a dream home.
 
Built in 1920 on a 574 sqm block, it currently provides a lounge room, combined kitchen and dining room, two bedrooms, additional rear living room (or perhaps a 3rd bedroom), bathroom with separate toilet, internal laundry, a rear verandah and courtyard and a well-established garden.

 
The home also boasts period style features such as high, ornate ceilings, a classic front façade, original ‘Metters’ Bega cast iron stove, original non-functioning open fireplace and wide timber floorboards.
 
Its current sale price is $499,000, approx. $152,000 less than the current median sale price ($651k) for 3 bedroom houses in postcode 2780. The advertisement says it is ‘liveable’ as is but this character residence will need renovations to bring it back to its former glory.  Its sale price of $499,000 reflects this.  The property was last sold in May 1996 for $94,000. 
 
This home has broad appeal to first home buyers, young families, renovators or investors.  The property is well located in the desirable ‘south’ side of Katoomba, approx. 500 metres from local amenities including walking distance to public transport, local shopping centre and schools and approx. 2.0 km to Leura Mall.
 
With the dramatic scenery and bushwalks of the Blue Mountains on its doorstep, Katoomba is the most visited town in the Blue Mountains with attractions such as the Scenic Railway (the steepest railway incline in the world), lookouts such as Eaglehawk Lookout and Landslide Lookout, Katoomba Falls and the Three Sisters at Echo Point.
 
The area has long been a favourite with nature-lovers, musicians and artists and is an affordable alternative to city living. 
 
While
Sydney’s property market has experienced declines in house prices of 7.4% over the last 12 months, in the Katoomba area the decline has been less with a 5.0% drop over the last 12 months. 
 
House weekly rents have also fared a little better in postcode
2780 with a 2.7% decline over 12 months and a 6.6% increase over 3 years, compared to Sydney’s 3.3% decline in 12 months and 2.8% decline over 3 years.
 
The area’s asking prices appear to have been more robust, which can be attributed to a wide buyer demographic (retirees, professional couples, first home buyers, young families, tree changers, investors), its close proximity to Sydney, its relaxed lifestyle and the appeal of the surrounding natural environment.
 
Over the last month, Katoomba’s
house prices have bounced back recording a 4.1% increase after experiencing a modest 1.9% increase over 3 years.  Sydney house asking prices have increased by 1.1% over the last month.


Keep monitoring this market’s growth at 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.
 

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
30 Jul 2019
Asking Price Chg on
prev wk
Rolling month
% chg
12 month
% chg
Sydney All Houses 1,249.6 17.4  1.1%  -7.4% 
All Units 699.7 1.3  1.0%  -3.2% 
Melbourne All Houses 935.8 1.5  0.1%  -4.5% 
All Units 538.9 -0.7  -0.1%  -1.6% 
Brisbane All Houses 616.5 -0.2  -0.1%  -0.2% 
All Units 371.8 -0.5  -0.0%  -2.4% 
Perth All Houses 650.7 -3.9  -1.2%  -2.0% 
All Units 383.1 -0.9  -0.7%  -2.9% 
Adelaide All Houses 514.5 -1.0  0.1%  2.3% 
All Units 299.7 0.2  -0.7%  -0.6% 
Canberra All Houses 804.0 8.8  1.1%  -1.1% 
All Units 433.9 1.0  0.8%  5.9% 
Darwin All Houses 590.2 -0.8  1.2%  -0.0% 
All Units 355.0 -0.8  -0.2%  -4.1% 
Hobart All Houses 514.9 -0.6  -0.6%  5.6% 
All Units 305.5 -3.1  -0.6%  1.3% 
National All Houses 564.5 -1.8  -0.4%  -0.9% 
All Units 378.2 1.5  0.8%  1.1% 
Cap City Average All Houses 918.6 12.0  1.1%  -4.2% 
All Units 565.8 -0.4  0.4%  -2.3% 
Next update: 6 Aug 2019
 
SQM Research Weekly Rents Index
Week ending: 28 Jul 2019     Rent     Chg on
prev wk
Rolling month
% chg
12 month
% chg
Sydney All Houses    685.0 -1.0  -0.4%  -3.3% 
All Units 501.3 -0.3  -0.2%  -3.7% 
Melbourne All Houses 530.0 -5.0  -1.8%  1.5% 
All Units 422.6 -0.6  -0.3%  2.8% 
Brisbane All Houses 463.2 -1.2  0.7%  2.4% 
All Units 374.8 0.2  0.3%  1.4% 
Perth All Houses 430.9 -4.9  -3.4%  1.4% 
All Units 340.7 1.3  1.2%  4.5% 
Adelaide All Houses 399.0 -1.0  0.4%  4.0% 
All Units 310.9 1.1  0.4%  3.9% 
Canberra All Houses 619.0 -5.0  -0.5%  -1.9% 
All Units 460.8 -0.8  -0.3%  5.1% 
Darwin All Houses 525.4 -2.4  0.6%  -2.0% 
All Units 370.7 1.3  0.3%  -8.5% 
Hobart All Houses 453.3 2.7  3.4%  14.2% 
All Units 403.9 -3.9  5.6%  14.1% 
National All Houses 438.0 -4.0  -0.9%  1.6% 
All Units 370.0 2.0  0.8%  4.8% 
Cap City Average All Houses 545.0 -6.0  -1.3%  -0.7% 
All Units 441.0 0.0 0.0% -0.5% 
Next update: 4 Aug 2019
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