VACANCY RATES TUMBLE IN JANUARY
by Louis Christopher, CEO, SQM Research
New data released by SQM Research today has revealed the national residential rental vacancy rate decreased in January 2020 to 2.1% from 2.5% recorded in December, with the total number of vacancies Australia-wide now at 72,422 vacant residential properties.
All states recorded decreases in vacancy rates with Darwin recording the highest vacancy rate at 3.2% followed by Sydney at 3.1%. Hobart’s vacancy rate remains steady at 0.6%, the lowest of all capital cities.
Adelaide and Canberra also recorded low vacancy rates of 1.0% and 1.4% respectively.
The year on year comparison revealed a more moderate decline. The national rental vacancy rate back in January 2019 was 2.2% compared to 2.1% recorded for January 2020. Melbourne, Canberra and Hobart recorded higher vacancy rates compared to this time last year.
Following on from December, January’s vacancy rates are also affected by seasonality. We will have a clear picture of the rental market when the numbers for February are released. However, we do believe that rental vacancy rates have now peaked in Sydney, Brisbane, Perth and Darwin. And assuming a stable economy, these cities are likely to record gradually lower vacancy rates as 2020 progresses.
Over the month, Capital city asking rents increased 2.5% for houses and 1.1% for units for the week ending 12 February 2020 to record asking rents of $569 per week for houses and $442 per week for units. In comparison over the 12 months, asking rents increased 1.6% for houses and remained steady for units.
Sydney, Melbourne and Perth all recorded increases in asking rents for both houses and units over the month.
Darwin and Hobart recorded decreases in both house and unit asking rents. Darwin had a 2.9% decline for houses and 2.5% for units whilst Hobart recorded 2.5% decline in houses and 1.4% in unit asking rents.
Brisbane recorded a decrease in house asking rents of 0.4% but increases of 0.2% in unit rents. Canberra and Adelaide had a reverse trend of increases in house rents but decrease in unit rents.
DISTRESSED PROPERTY OF THE WEEK
82 Bonson Terrace, Moulden NT 0830
Located in one of Palmerston's (NT) most established suburbs, this well-kept 3-bedroom, 1 bathroom, 2-storey house would make a great family home.
The house sits on a 886 sqm block with lots of yard space with manicured gardens, paved entertaining area and plenty of parking space.
Ground level has a large open-plan, tiled living and dining space with split system air-conditioning, a functional kitchen, internal laundry and second W/C. Upstairs are 3 bedrooms with new carpets and air-conditioning, and the main bathroom. The property is move-in ready or there is potential to upgrade.
The home is located close to schools and local shops and a short drive to Palmerston CBD, Palmerston Golf course and Palmerston Swim & Fitness Centre.
The property went to auction in April 2016 but did not sell, now the vendor is asking $315,000. It last sold for $370,000 in November 2010.
Whilst Darwin has been at the bottom of the property market since 2014, there is some potential good news with SQM’s Asking Price Index showing a 7.0% growth over 12 months for all houses in this postcode. In the last month, the growth has been 2.3%. Darwin city’s house prices also showed increases over the month of 0.2% for houses and 3.3% for units.
Investors can also see a glimmer of hope in the area with weekly asking rents for 3-bedroom houses growing a modest 0.2% over the month. Weekly rents for 2-bedroom units also increased by 0.5% over the month. Currently Vacancy rates in postcode 0830 is 2.8%. Gross rental yield for 3-bedroom houses is a healthy 5.0%.
No doubt, Darwin is seen as a boom-bust property market. As Louis Christopher’s Housing Boom & Bust report states, "Darwin is a boom-bust economy, which makes for a boom and bust housing market. This is not a city for the novice investor and really just ranks above a mining town in terms of risk versus reward."
Could Darwin see a turnaround with the commencement of some big projects including a $200 million CBD revitalisation and a new Charles Darwin University campus which could have flow-on effect for its property market?
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.
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!