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SQM Research Residential Newsletter - FINAL
Tuesday 7 April 2021
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Black Dragon's
Words for the Week

"Politics gives guys so much power that they tend to behave badly around women. And I hope I never get into that." 

Bill Clinton 

Real Estate Realities 

Cronulla dump sells for $3m 

A couple in their 80s have bought an uninhabitable home at Cronulla for $2.73m, which they plan to knock down and build a new home. While some people in their old age think about downsizing, this couple bought the house at 76 Nicholson Parade at auction, against 13 other bidders, despite it being a derelict two-bedroom house. 
Luxe Real Estate Agents director Stuart Payne said the house was so bad it had a warning in place for people inspecting it. “The house was totally dilapidated, you couldn’t live there,” he said. But the elderly couple weren't put off by the sad state of the home in Sydney’s south. the buyers had recently sold their own two-storey home in South Cronulla and had chosen the new address to be close to their daughter, who lives in the same street. Right near the beach, it could be an ideal place to finally retire.  This shows it's never too late to build a love nest.


More ....

PROPERTY LISTINGS SLIP IN MARCH

by Louis Christopher, CEO

Figures released today by SQM Research reveal national residential property listings fell in March  2021 by 0.5% to 256,568 from 257,952 in February 2021. Compared to 12 months ago, listings are down by 16.7%. The largest monthly decreases were in Canberra, while Melbourne, Perth and Darwin bucked the national trend and recorded rises in listings.



New Listings (30 days)

Nationally, new listings (30 days) (less than 30 days) rose 9.9% over the course of March to 84,030 properties on the market, to be up 10.7% over the year. Hobart new listings jumped the most in March, up by 14.7% though listings rose more than 10% for most cities. Sydney also recorded a robust rise of 9.2% in listings as people seek to take advantage of the strong property market. Over the year, listing rose the most in Darwin, by 58.5%.

In a sign that absorption rates are increasing, and stock is clearing, listings over 180 days fell 5.6% for the month and are down 32.5% compared to the same time last year, with listings down in all capital cities.



The property market is strong, and we can expect to see ongoing price gains this year. While overall listings fell, absorption rates continued to increase, so we saw overall property listings fall slightly over March, as they did in February; demand for property is still outstripping supply.

While JobKeeper has ended, absorption rates may slow a little, but the Australian economy remains awash with cash and with interest rates so low, we are likely to see sustained growth in property prices for the months to come, unless the regulators step in to cool the market, which is unlikely with COVID-19 still lurking in economies. 


Asking Prices

Over the past 30 days to 6 April, national asking prices rose by 0.8% for houses and 0.6% for units. Over the year, growth in asking house prices is higher in smaller cities, led by Hobart, with robust rises in prices also recorded in Brisbane and Adelaide.

Compared to a year ago, national asking prices posted increases of 9.8% for houses and 6.6% for units. Regional locations have pushed up the national average as buyers move out of the big cities and renters too become homeowners, helped on by government incentives. In contrast, capital city asking house prices rose only slightly over the year to 6 April, while unit asking prices are down by 1.8%, led by falls in asking prices for Sydney units of 5.4%, reflecting an oversupply of accommodation.

AUCTION RESULTS for week ending 4 April 2021

Full individual auction results can be found on our website: 



AUCTION LISTINGS* for week ending 11 April 2021
 

CITY Saturday   Rest of Week STATE Saturday   Rest of Week   Link
Sydney 809   100 All NSW 943   184   Auctions in NSW
Melbourne 991   75 All VIC 1110   92   Auctions in VIC
Brisbane 98   36 All QLD 195   155   Auctions in QLD
Perth 10   5 All WA 13   8   Auctions in WA
Adelaide 77   23 All SA 79   27   Auctions in SA
Canberra 65   8 All ACT 65   8   Auctions in ACT
Darwin 2   0 All NT 2   1   Auctions in NT
Hobart 3   0 All TAS 5   2   Auctions in TAS

* The above counts of auctions represent most recent known auction dates for the coming week.
 

DISTRESSED PROPERTY OF THE WEEK

949/243 Pyrmont Street Pyrmont NSW 2009

 
This apartment in Pyrmont right next to the Sydney CBD has spent some time on the market as the vendor readjusts their expectations given the oversupply of units in the district. The price has dropped to $595,000 from an initial asking price of $619,000 in June 2019. 

With views over the Sydney CBD and Darling Harbour, the apart is well positioned on the ninth level of the Goldsbrough building. It is a modern airy apartment building with full resort facilities and 24-hour concierge service that could suit an owner occupier or investor. 

But before you take the plunge, let's look at the numbers. 
Asking property prices for units in the 2009 postcode are down 7.2% over the year to 6 April 2021, and haven't risen in 10 years, so you might want to haggle some more. Sold records for the 2009 postcode indicate the apartment's price isn't far off from comparable sales for one-bedroom units.

However,
asking weekly rents for units have fallen by around 9.3% over the last 12 months to 4 April.  The fall in rents may be explained by the high vacancy rate of 4.4%, though that is down from a COVID-19 crisis high of around 10% in May last year. Weekly rent listings have been falling since May 2020, so it looks as if the oversupply in rental accommodation could be stabilising.

Still, with the downward movement in property values, you might want to ask for a bigger discount to give yourself a greater margin of safety, and the vendor just might be prepared to give way some more to sell this property.

You can monitor this market and others 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
6 Apr 2021
Asking Price Chg on
prev wk
Rolling month
% chg
12 mth
% chg
Sydney All Houses   1,411.3 3.7  0.4%  3.2% 
All Units 671.7 -2.4  -0.8%  -5.4% 
Melbourne All Houses 1,026.2 2.8  0.1%  -1.3% 
All Units 569.8 -1.3  -0.7%  2.2% 
Brisbane All Houses 672.3 2.2  1.0%  3.7% 
All Units 384.4 0.0  0.1%  3.5% 
Perth All Houses 668.4 -0.4  0.1%  1.5% 
All Units 389.6 -0.6  -0.3%  3.7% 
Adelaide All Houses 539.3 -3.8  0.4%  3.9% 
All Units 321.0 2.9  1.0%  4.7% 
Canberra All Houses 827.0 2.1  -0.1%  0.5% 
All Units 473.7 5.2  1.8%  7.8% 
Darwin All Houses 588.8 -4.8  1.1%  0.8% 
All Units 385.1 2.2  3.5%  20.0% 
Hobart All Houses 627.6 -1.5  -1.5%  8.7% 
All Units 388.6 4.3  6.0%  7.5% 
National All Houses 653.8 6.7  0.8%  9.8% 
All Units 415.7 0.1  0.6%  6.6% 
Cap City Average All Houses 1,006.5 3.5  0.0%  1.9% 
All Units 564.3 -1.5  -0.9%  -1.8% 

Next update: 13 Apr 2021
 

SQM Research Weekly Rents Index
Week ending
4 Apr 2021
Rent Chg on
prev wk  
Rolling month
% chg
12 mth
% chg
Sydney All Houses      656.0        4.0   0.2%  -3.6% 
All Units 452.8 0.2  -0.6%  -7.9% 
Melbourne All Houses 511.8 -0.8  -0.5%  -6.7% 
All Units 366.4 -1.4  -1.2%  -12.7% 
Brisbane All Houses 486.9 3.1  1.7%  4.5% 
All Units 384.8 1.2  0.5%  2.0% 
Perth All Houses 514.1 5.9  2.2%  12.3% 
All Units 386.5 -0.5  1.6%  11.1% 
Adelaide All Houses 436.0 2.0  2.4%  6.8% 
All Units 329.1 -0.1  2.5%  5.3% 
Canberra All Houses 658.9 2.1  -0.1%  1.8% 
All Units 493.2 -0.2  0.3%  6.0% 
Darwin All Houses 584.3 -5.3  -0.3%  24.4% 
All Units 400.2 4.8  4.5%  10.6% 
Hobart All Houses 484.7 7.3  2.3%  7.8% 
All Units 423.3 7.7  6.0%  6.4% 
National All Houses 514.0 8.0  3.2%  15.8% 
All Units 395.0 6.0  2.1%  7.0% 
Cap City Average All Houses 555.0 6.0  1.1%  0.4% 
All Units 410.0 0.0 -0.2%  -5.3% 

Next update: 12 Apr 2021

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