Distressed Property of the Week

28/8 Prowse Street, West Perth 6005 

The vendor is accepting offers from $535,000 as of 6 August on this 2-bedroom apartment, located in West Perth. The property last sold in January 2010 for $670,000 and the vendor is hoping the reduced price will attract either an owner-occupier or landlord for a quick sale. The apartment has a tenant in place until late September.

According to Michael Adams and Brendon Habak from Realestate 88 Inner City, the 'Saint Germain' 2-bedroom apartment is located on the 7th floor and is located in West Perth. The open-plan apartment includes sun-filled bedrooms and balcony access. The residence features 5-star complex facilities such as a pool and a gymnasium. The city west train station is located within walking distance, along with a park, school and shopping mall.

If you think it is a good deal, make sure you crunch the numbers first. In postcode 6005, the vacancy rate has decreased over the last 12 months to 2.2% in August 2021 from 2.7% in August 2020. Asking rents have gained 11.2% over the last 12 months to 17 August. The gross rental yield on 2-bedroom units currently sits at 5.2%.

However, asking sales prices for 2-bedroom units have risen over the year by 14.6% and over three years have fallen by 1.8%. You can view recent sales in 6005 here. Given these figures, it would pay to do more research, as you could possibly drive a harder bargain with the seller given the fall in unit prices.

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.

Tight Rental Vacancy Rates Trigger Across the Board Surges in Rents

SQM Research today has revealed the national residential rental vacancy rate remains tight at just 1.7% over the month of July 2021.

Meanwhile, rents surged for yet another month in most capital cities and regions. The national combined weekly rent stands at $508 a week, which was up by 1.3% for the past 30 days to August 12 and up by a concerning 13.7% for the past 12 months.

Vacancy Rates

The total number of vacancies Australia-wide now stands at 61,313 residential properties, up from 60,468 in June. Melbourne’s vacancy rate rose to 3.6% in July from 3.5% in June, while in Sydney vacancy rates dropped to 2.7% from 2.8%. In Adelaide, Darwin and Hobart the vacancy rate remained below 1.0%, while Perth and Brisbane and Canberra rate remained constant. Vacancy rates rose in the Sydney CBD to 6.1%, possibly reflecting the new lockdown. While rates fell again in the Melbourne CBD to 5.7%.

Rents

Over the month to 12 August 2021, national asking rents rose 1.3% for houses to $526 per week Units rose by 0.5% to $420 a week. The national rise was driven by larger regional increases over and above the capital cities. SQM Research believes the new lockdowns may have triggered another wave of interest in regional living as many of the community seek freedom away from harsh Covid measures. 

Nevertheless, capital city rents also rose by 0.5% for houses over the past 30 days and are up by 8% over the past 12 months. Rents were flat for units for the past 30 days and up by just 0.7% for the past 12 months. Rents for houses in some cities have recorded stunning increases over the year, with Brisbane up by 11.2%, Perth up by 12.9% and Darwin up by 25.3%.

Louis Christopher, Managing Director of SQM Research said:
“Current tight rental vacancy rates are driving up rents across Australia. It is somewhat perplexing to see both regional Australia and the Capital cities record surges. Given the ongoing international border closures and still relatively high completions, the national rental market should be at least more balanced. That may well still happen if lockdowns persist through to Summer as it is likely many people living in Sydney and Melbourne may attempt to move elsewhere.
 
“It is also possible that long term leasing is becoming very challenging for landlords due to rental moratoriums etc. We believe instead that landlords may increasingly be using short term accommodation websites such as Airbnb and Stayz whereby they have a greater say on who occupies their property and the length of time they stay.”

Auction Results

for week ending 15 August 2021

Auction Listings*

for week ending 22 August 2021

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

The rise of interstate cashed-up buyers purchasing property in Queensland has resulted in a growth of million-dollar suburbs outside of Brisbane. At present, there are 41 million-dollar suburbs outside of the capital city, excluding the Gold Coast and Sunshine Coast.

The suburb of Castle Hill in the Townsville region has seen medium house values soar 24% over the last 12 months, to an average of $1.095 million. Recently a Castle Hill property sold for $3.2 million, to a family to use as a weekend home. This is has resulted in an increase in money coming into the community.

Many Sunshine Coast suburbs over the last year have joined the million dollar club, as the region has attracted individuals with a high-net worth from Sydney and Melbourne. These suburbs have also been attractive to wealthy expats that have slowly been returning over the past year due to the Covid-19 pandemic.

Over the last few months there has been an increase in $2 million property sales north of Queensland. Ray White Whitsunday agent Steve Marks has seen “an exceptional run on land in particular in the past six months,” and “would expect to see Airlie become a million-dollar suburb in the next quarter.”

The rise in vacancies by 0.5% and rents increasing by 20% is drawing people in who want to relocate to the area, as well as investors and holiday homebuyers. Mr. Marks notes that he is “selling houses for $2 million that are being rented out as holiday homes for $130,000 a year.”

Economic research executive manager Cameron Kusher from REA Group said that it is “unlikely there would be a rush on million-dollar suburbs outside of the southeast corner, as prices were on the move on the back of demand.” Individuals are looking for value for money, and if they don’t need to be tied to a capital city, they are able to get this in the regions.

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SQM Research Housing Indexes

SQM Research Weekly Asking Prices Index

Week ending 17 Aug 2021		Asking Price	Chg on prev wk	Rolling month % chg	12 mth % chg
Sydney	All Houses	1,548.8	-14.5	-4.5%	14.1%
	All Units	686.5	-0.1	0.2%	0.9%
Melbourne	All Houses	1,079.5	-1.5	-0.2%	5.5%
	All Units	566.2	0.5	0.3%	0.6%
Brisbane	All Houses	720.4	10.3	4.0%	12.1%
	All Units	392.3	-0.7	-0.3%	4.3%
Perth	All Houses	695.2	-1.3	-0.5%	4.1%
	All Units	388.2	-0.3	-0.3%	2.2%
Adelaide	All Houses	578.7	3.3	1.6%	9.9%
	All Units	330.0	-1.0	0.8%	7.3%
Canberra	All Houses	825.9	5.1	0.5%	1.7%
	All Units	486.6	1.9	1.4%	7.8%
Darwin	All Houses	609.3	4.5	0.9%	6.2%
	All Units	372.4	0.9	-0.6%	7.7%
Hobart	All Houses	649.9	-5.9	0.2%	13.6%
	All Units	429.5	-1.6	0.1%	10.4%
National	All Houses	685.6	-0.7	-0.2%	14.7%
	All Units	428.2	0.6	1.1%	8.5%
Cap City Average	All Houses	1,073.8	0.2	-2.5%	9.6%
	All Units	572.9	-0.9	0.3%	1.7%

Next update: 24 Aug 2021

SQM Research Weekly Rents Index

Week ending 12 Aug 2021		Rent	Chg on prev wk	Rolling month % chg	12 mth % chg
Sydney	All Houses	697.8	2.2	1.4%	10.2%
	All Units	464.8	-0.8	0.3%	0.1%
Melbourne	All Houses	520.1	0.9	0.5%	-0.4%
	All Units	369.5	0.5	0.8%	-6.5%
Brisbane	All Houses	516.6	0.4	0.0%	11.2%
	All Units	394.5	0.5	1.0%	4.3%
Perth	All Houses	529.0	1.0	1.1%	12.9%
	All Units	404.1	-1.1	0.4%	13.9%
Adelaide	All Houses	447.5	-0.5	-0.9%	9.1%
	All Units	334.5	-0.5	-0.4%	5.3%
Canberra	All Houses	724.6	-3.6	0.8%	13.7%
	All Units	518.9	6.1	3.9%	9.0%
Darwin	All Houses	610.7	-3.7	-1.9%	25.3%
	All Units	462.9	0.1	1.0%	29.0%
Hobart	All Houses	485.0	12.0	2.0%	9.8%
	All Units	418.9	4.1	3.1%	8.3%
National	All Houses	526.0	-1.0	1.3%	14.6%
	All Units	401.0	3.0	0.5%	7.2%
Cap City Average	All Houses	578.0	4.0	0.5%	8.0%
	All Units	420.0	0.0	0.0%	0.7%

Next update: 20 Aug 2021