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SQM Research Residential Newsletter - 
Tuesday 17 November 2020
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Black Dragon's
Words for the Week

“The one thing ... that is truly ugly is the climate of hate and intimidation, created by a noisy few, which makes the decent majority reluctant to air in public their views on anything controversial. ... Where all pretend to be thinking alike, it's likely that no one is thinking at all.” 

Edward Abbey
Author

Real Estate Realities 

More than 1 in 10 Aussies are struggling to pay their mortgage due to COVID, ABS study reveals

More than one in 10 Aussies with a mortgage are having problems paying it off, as COVID-19’s hidden impact is revealed.

According to Australian Bureau of Statistics data released Monday11% of Australians surveyed were struggling to pay down their homes during October. This is more than double the amount (5%) who said they were having trouble doing so in June.

The survey, which focused on the impact of COVID-19 on Australian households, also found:

– one in seven (14%) people living in a home owned with a mortgage had their mortgage repayment deferred or reduced (includes mortgages on a current dwelling or an investment property)

– one in 13 people (8%) living in a rented home had their rent payment for the dwelling deferred or reduced.

– one in 20 Australians (5%) had a bill or rate payment deferred or reduced.

It was also revealed, 4% of renters had difficulty paying the rent, or feared eviction during October. This was at the same level on June.

Read More...

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


CITY

Saturday

Rest of Week

 

STATE

Saturday

Rest of Week

Link

Sydney 748 121   All NSW 833 235 Auctions in NSW
Melbourne^ 566 157   All VIC 601 167 Auctions in VIC 
Brisbane 81 30   All QLD 160 74 Auctions in QLD 
Perth 11 5   All WA 12 10 Auctions in WA 
Adelaide 70 39   All SA 71 44 Auctions in SA 
Canberra 75 38   All ACT 75 38 Auctions in ACT 
Darwin 1 5   All NT 1 5 Auctions in NT 
Hobart 0 0   All TAS 12 1 Auctions in TAS

* 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.


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: 17 Nov 2020  Asking Price      Chg on
   prev week
   Rolling month
% chg
   12 month
% chg
Sydney  All Houses     1,360.5 6.9  1.8%  5.4% 
All Units 671.7 -0.5  -0.3%  -4.7% 
Melbourne  All Houses 1,025.2 -2.5  -0.4%  5.9% 
All Units 575.9 0.1  1.7%  4.3% 
Brisbane  All Houses 654.2 -1.3  0.2%  3.6% 
All Units 379.9 0.7  0.7%  2.1% 
Perth  All Houses 672.1 -2.5  -0.2%  2.4% 
All Units 379.8 0.2  -0.5%  0.0% 
Adelaide  All Houses 532.8 3.0  1.6%  2.7% 
All Units 314.8 1.1  2.0%  4.0% 
Canberra  All Houses 810.0 2.0  0.8%  -0.3% 
All Units 472.6 0.9  1.4%  9.0% 
Darwin  All Houses 582.8 2.2  -0.2%  0.8% 
All Units 352.9 1.4  1.9%  12.0% 
Hobart  All Houses 578.3 -9.3  -0.6%  7.9% 
All Units 393.1 1.4  -2.9%  18.7% 
National  All Houses 616.4 3.1  2.0%  5.9% 
All Units 398.3 2.0  0.4%  3.4% 
Cap City Average  All Houses 985.9 4.3  0.5%  4.7% 
All Units 565.2 -1.7  0.4%  -1.3% 

Next update: 24 Nov 2020

SQM Research Weekly Rents Index
Week ending: 12 Nov 2020      Rent            Chg on
prev week
   Rolling month
% chg
   12 month
% chg
Sydney  All Houses        632.8 7.2  3.4%  -7.2% 
All Units 449.4 -0.4  -0.6%  -9.6% 
Melbourne  All Houses 513.2 -1.2  -0.4%  -3.1% 
All Units 388.1 -1.1  -0.5%  -5.0% 
Brisbane  All Houses 467.5 -0.5  0.0%  0.9% 
All Units 377.3 -0.3  0.0%  0.2% 
Perth  All Houses 478.9 4.1  1.2%  9.2% 
All Units 362.3 -1.3  0.0%  8.6% 
Adelaide  All Houses 418.9 -0.9  0.5%  5.3% 
All Units 308.9 -1.9  -2.0%  -1.0% 
Canberra  All Houses 633.9 5.1  1.6%  -1.4% 
All Units 479.7 -1.7  0.0%  1.7% 
Darwin  All Houses 548.6 7.4  4.2%  9.2% 
All Units 379.1 3.9  2.7%  0.5% 
Hobart  All Houses 433.2 -6.2  -4.7%  -0.6% 
All Units 388.4 6.6  1.5%  -7.4% 
National  All Houses 470.0 0.0 1.5%  5.1% 
All Units 371.0 2.0  0.5%  0.8% 
Cap City Average    All Houses 538.0 1.0  2.1%  -2.0% 
All Units 409.0 -2.0  -0.5%  -6.0% 

Next update: 20 Nov 2020

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