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NATIONAL VACANCY RATES MARGINALLY INCREASE IN OCTOBER
by Louis Christopher
SQM Research today has revealed the national residential rental vacancy rate marginally increased to 2.1% over the month of October 2020. The total number of vacancies Australia-wide is now 74,221 vacant residential properties. This time last year, the national vacancy rate was also at 2.1%.
In most capital cities the vacancy rate remained stable over the month except for Sydney which saw a minor increase from 3.5% in September to 3.6% in October. Melbourne recorded a larger increase from 3.8% in September to 4.4% in October. Melbourne continues to have the highest vacancy rate in the nation with an additional 3,863 vacant properties in October. The surplus of rental property is most acute in the Melbourne CBD where vacancy rates stand at 10.6%.
Hobart’s vacancy rate is the lowest in the nation at 0.6%.
Asking Rents
Over the month, Capital City average asking rents increased 2.1% for houses but decreased 0.5% for units for the week ending 12 November 2020 to record asking rents of $538 per week for houses and $409 per week for units.
Most capital cities recorded increases in house asking rents, with Sydney recording the highest increase of 3.4% over the month, but a decline of 0.6% in unit asking rents.
In Hobart it was reversed, the city recorded a decline in house rents of 4.7% but an increase in unit rents of 1.5%.
Darwin was the only capital city to record rental increases in both houses and units, with the highest increase in the nation of 4.2% for house rents and 2.7% for unit rents.
Melbourne however recorded declines in both house and unit asking rents over the month of 0.4% and 0.5% respectively.
Adelaide recorded a 0.5% increase in house rents but a 2.0% decline in unit rents. Canberra recorded a 1.6% increase in house rents but unit rents remained stable. Perth unit rents also remained stable and house rents increased 1.2% over the month. Brisbane house and unit rents remained stable.
Year on year, Capital City Average asking rents declined for both houses and units, 2.0% and 6.0% respectively. Sydney in particular recording a high 7.2% decline in houses and 0.6% decline in units in October 2019.
Commentary
Rental vacancy rates continue to remain elevated in our larger capital cities. While regional locations are still recording near zero rental vacancies. I believe the ongoing phenomenon, which started on the outset of Covid-19 lockdowns will in part reverse out once Coronavirus is behind us. But we are not there yet and there is also a large possibility that there will only be a part reversal as I believe many have used Coronavirus as a catalyst for a longer-term lifestyle change.
Meanwhile rents continue to plummet on our inner-city locations. For those who will be coming back to inner city living, there are some bargains to be had.
AUCTION RESULTS for week ending 15 November 2020
Full individual auction results can be found on our website:
AUCTION LISTINGS* for week ending 22 November 2020
* The above counts of auctions represent most recent known auction dates for the coming week. ^As at 18-Oct-20, Melbourne outdoor auctions will be allowed (max. 10 people).
DISTRESSED PROPERTY OF THE WEEK
7 Bayland Place, Mount Martha Vic 3934
This modern two storey townhouse, approx. 60km south of Melbourne CBD in the Mornington Peninsula suburb of Mount Martha, is for sale with a price range of $700,000 to $770,000. It last sold in July 2017 for $335,300. SQM records show that the town house has been on sale since May 2020.
Privately positioned in a boutique complex, this 206 sqm townhouse comprises 4 bedrooms, 2 baths and remote double garage. It features a spacious open plan living/dining area, kitchen with quality appliances, reverse-cycle split systems, high ceilings, timber floors, covered alfresco deck area and low-maintenance landscaped gardens.
It is well located, just 350 metres to Bentons Square Shopping Centre, walking distance to Mt Martha beach and close to local schools.
The area is a popular weekender village with trendy cafés and restaurants and some of the best peninsula beaches in Melbourne.
Currently the asking sales price of houses in the area ranges from 994,000 to over $1 million and unit prices are approx. $677,000. Over the last month, houses prices have declined by 7.4% but unit prices have increased by 0.5%.
Asking rents have been increasing 5.1% for houses and 15.9% for units over the month. Gross rental yield for houses is 2.7% and 4.1% for units.
Vacancy rates in this postcode has declined from 1.8% in May 2020 to 0.1% in October and could be heading for a rental shortage especially leading into the busy summer period. At the end of October, there were only 6 rental listings.
Population growth could also lead to increasing rents and asking sale prices. From 2011 to 2016, the area has had a population growth of 8.6% (2016 ABS Census).
This town house would suit growing families looking for a lifestyle opportunity in a beachside suburb.
You can monitor this market with SQM Research’s free property data. Also consider the SQM Property Explorer product for more in-depth data and property price estimator.
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