The Grove | LMI Report (January 2024)

Local Market Intelligence Residential Market Overview Tarneit

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The Melbourne Story

Metropolitan Melbourne: Key Considerations

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Introduction Melbourne is a city of international significance. It has long been ranked in the top ten of the world’s most liveable cities, including number one from 2011-2017.

Melbourne is home to two universities ranked in the top 50 global universities.

Victoria, Australia’s second-largest economy, grew by +2.6% over FY 2022 – FY 2023, following a very strong postpandemic rebound of 6.3% in the previous financial year.

The recovery was driven primarily by the ‘transport, postal and warehousing’ sector as the re-opening of borders in early 2022 boosted the demand for travel. The unemployment rate in Victoria in November 2023 was 4%, which represents a significant contraction from peak pandemic levels.

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Liveability

Education

Most Liveable Cities

2 Universities in the Top 50 Global Universities

Ranked 1st 7 consecutive years (2011-2017) and 3rd in 2023

University of Melbourne ranked 14th and Monash University ranked 42nd

Economic Growth FY2022/23

Unemployment Rate

+2.6% +3.0%

VIC: 4.0%

VIC

AUS

December 2023 (down from June 2020 peak of 7.5%)

Melbourne, Sydney, Brisbane, Gold Coast, Singapore

Demand Considerations Prior to the onset of the Covid-19 pandemic, Victoria was the fastest-growing state in Australia, leading the nation in population growth since 2015. Strong population growth was underpinned by high volumes of Net Overseas Migration (NOM).

The closure of international borders in 2020/21 resulted in substantial falls in NOM and this severely limited Victoria’s population growth.

Victoria’s NOM has rebounded strongly and is now a key driver of housing demand across the state. Importantly, Melbourne is forecast to once again become Australia’s fastest growing Capital City in 2023/24.

VIC Population

6.8M

+2.7%

June 2023

Annual change (Jun 22 – Jun 23)

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VIC June 2023 Natural Increase

Net Overseas Migration

Net Interstate Migration

+29.5K

+154.3K

-1.9K

Future Housing Requirements

Melbourne Population Outlook

1.6 million dwellings

Fastest Growing City by 23/24

Metropolitan Melbourne’s Requirements 2016 - 2051

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Components of Annual Population Growth

Australian Government – Centre for Population Annual Population Statement 2022

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Supply Considerations Detached housing is the predominant form of housing stock in Melbourne. Policy aspirations however aim to achieve greater levels of higher density dwellings to accommodate future population growth.

House price growth in Melbourne has been high over the last two decades which has supported the development of higher density housing stock.

Melbourne continues to remain the leading supplier of new greenfield lots across Australia with an average of 19,500 annual lot sales recorded over the past decade.

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Existing Housing Composition Melbourne (2021)

Composition of Future Housing Supply (2011-2051)

High Density

Medium Density

Detached Houses

High Density

16%

16%

68%

31% 36% 34%

Median House Price Growth - Melbourne 3-Year Growth

10-Year Growth

20-Year Growth

+4.3%

+5.1%

5.4%

Medium Density

Detached Houses

Greenfield Lot Sales

19,500 Annual Lot Sales (2013 – 2022) Metropolitan Melbourne

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Local Market Intelligence Tarneit

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Local Market Intelligence – Tarneit KEY CONSIDERATIONS AMENITY: Tarneit offers a higher level of amenity than other greenfield locations due to the presence of a railway station and multiple shopping centres.

DEMAND CONSIDERATIONS

SUPPLY CONSIDERATIONS

$650K

25-44 Year-Olds

1,800 Approved Dwellings

2023 median house price in Tarneit

INFRASTRUCTURE DEVELOPMENT: West Gate Tunnel Project. Due to complete in 2025, the West Gate Tunnel Project will provide a secondary freeway link between Melbourne’s West and the City.

New and improved road infrastructure will ease congestion along the West Gate Freeway and Bridge.

Additionally, the project will also add and improve walking and cycling paths and create approximately 9ha of new parks and wetlands.

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MARKET CONSIDERATIONS

+5.9% p.a.

10-year average annual house price growth in Tarneit.

(Metro Melbourne = +5.1% p.a.)

$477 p.w.

Median weekly three-bedroom house rent Tarneit.

New and Upgraded Stations. A number of new and upgraded stations will be built across Melbourne’s West, including a new station at Tarneit West which will include a pedestrian crossing, four-bay bus interchange and parking for 400 commuters. Early site investigations will commence soon.

+4.7% p.a.

Wyndham Stadium Precinct. Construction has started on the Wyndham Stadium Precinct which will deliver major sporting and social infrastructure within Tarneit. The project will form a sports and entertainment precinct that incorporates a 15,000-seat stadium (to be home of an ALeague team), sports grounds for professional and community use as well as a range of commercial and residential development.

Vacancy rate in Tarneit.

(3 month rolling)

10-year average annual house rental growth in Tarneit.

0.9%

The predominant age cohort across Tarneit, accounting for 42% of all residents.

Couples with Children

Predominant household type, accounting for 59% of total households in Tarneit.

30 Years of Age

Younger age demographic than Metropolitan Melbourne. (Metro Melbourne = 37 years)

+5.3% p.a.

Forecast population growth in Tarneit to 2036.

(See page 15-17 for more info)

Number of new residential dwellings approved in Tarneit during the last 12 months.

Approvals have contracted since levels observed in 2021.

Detached Housing

90% of dwellings in Tarneit are detached houses.

Owner Occupiers 71% of detached houses are owned outright or owned with a mortgage.

(See page 19-21 for more info)

(See page 11-13 for more info)

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Local Market Intelligence – Tarneit CONNECTIVITY, LIVEABILITY AND LIFESTYLE

SUBURB CONTEXT AND FUNDAMENTALS

Numerous watercourses run through the suburb including Werribee River, Skeleton Creek, Tarneit Creek and Davis Creek. Additionally, there are many parks located throughout the suburb’s housing developments. The Werribee Mansion and Werribee Open Range Zoo are both within close proximity.

 Tarneit is a suburb within the City of Wyndham Local Government Area (LGA), located approximately 28km west of the Melbourne CBD.  Significant residential development in Tarneit first began in the mid2000s. Prior to this time, the area was an undeveloped rural locality mostly comprising farmland.

Federation Trail provides access to the Inner West and Melbourne CBD. Skeleton Creek Trail and Werribee River Trail provide popular shared bike and pedestrian trails.

 The suburb is bounded by Truganina to the east, Hoppers Crossing and Werribee to the south and Wyndham Vale to the west.

Tarneit Central Shopping Centre is situated in the heart of the suburb, anchoring major retailers.

Other shopping centres include Wyndham Village SC, Tarneit Gardens SC and Tarneit West SC. Pacific Werribee in Hoppers Crossing is the nearest super-regional shopping centre, with most major retailers present.

 Tarneit is predominantly a residential suburb, with small pockets of retail activity located throughout. The western and northern portions of the suburb are presently undeveloped but will support additional housing over the coming years.

Tarneit has numerous Primary & Secondary schools. Victoria University’s Werribee Campus is also in close proximity.

Werribee Mercy & St Vincent Private Hospitals anchor Wyndham’s major medical precinct located in the nearby suburb of Werribee.

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28km west of the Melbourne CBD.

Proximity to the Melbourne CBD and Laverton North Industrial precinct.

Direct connectivity to the CBD via Sayers Road and Leakes Road which connect to the Princes Freeway. Connectivity to the south to Werribee and via the Princes Freeway to Geelong.

Tarneit is serviced by a Vline service to Melbourne CBD and Geelong. Metro services to the CBD also operate from Werribee, Hoppers Crossing and Williams Landing stations - each within a short drive. Numerous bus routes run through the suburb, providing a connection to the train stations, and key shopping precincts.

Approximately 30 minutes drive to Melbourne Airport and Avalon Airport via Princes Freeway and Western Ring Road.

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Local Market Intelligence – Tarneit

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Market Considerations

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Market Considerations PRICE INDICATORS – HOUSE PRICE

MEDIAN HOUSE PRICE & AVERAGE ANNUAL % CHANGE – TARNEIT (1998-2023*)

The 2023 median house price in Tarneit was $650,000. This is significantly more affordable than the median house price observed across Metropolitan Melbourne ($840,000).

Over the last decade, Tarneit has recorded stronger house price increases than Metropolitan Melbourne, achieving average growth of 5.9% p.a. compared to 5.1% in Melbourne. The past three years has seen this outperformance continue, with house prices growing by 5.0% p.a. in Tarneit, and 4.3% p.a. across Melbourne.

Tarneit is a highly sought-after location within the Wyndham LGA, as evidenced by its strong recent price growth and outperformance relative to Melbourne and the LGA over the last three years.

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*Year to Sep-23 These figures reflect transacted and settled sales recorded by Domain.

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Market Considerations PRICE RELATIVITY

2023 MEDIAN HOUSE PRICE – TARNEIT & SURROUNDING SUBURBS

In comparison to other surrounding suburbs in the Wyndham LGA, Tarneit has a higher median house price than the older more established suburbs of Hoppers Crossing ($613,500) and Werribee ($600,000).

Tarneit has greater established infrastructure than the other greenfield markets in the region, through the provision of shopping centres and a railway station. Tarneit’s strong amenity offering will continue to drive demand into the future with house price growth likely to remain robust.

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Market Considerations RENTAL MARKET INDICATORS

MEDIAN WEEKLY RENTS (HOUSES – 3 BEDROOMS)*

As at the end of November 2023, the median weekly rent for a three-bedroom house in Tarneit was $477 p.w.. This was significantly more affordable than the Metropolitan Melbourne equivalent of $660 p.w..

Rents in Tarneit did not suffer the falls experienced in central and inner Melbourne suburbs during the pandemic. As a result, rental growth over the last 3-, 5- and 10years in Tarneit has outperformed the Greater Melbourne average.

Despite weekly median rents measuring below metropolitan Melbourne, rental growth indicates that there is an increasing demand for rental properties in Tarneit. This is partly explained by the differential in affordability compared to more central locations.

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Demand Considerations

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Demand Considerations POPULATION INDICATORS

POPULATION GROWTH – TARNEIT* (2021-2036)

Based on the Victoria in Future (VIF) 2023 projections, the population in Tarneit is forecast to grow considerably over the coming 10-15 years. At 5.3 % p.a. over the period 2021-2036, average growth is set to outpace both Wyndham LGA (3.2% p.a.) and Metropolitan Melbourne (1.8% p.a.).

In the shorter term, 2021-2026 is expected to achieve particularly strong population growth in Tarneit, and the wider LGA, suggesting the locality will benefit more than the Metropolitan Melbourne average from the return in net overseas migration.

*Study area comprises the following SA2 areas: Tarneit – Central, Tarneit – North, Tarneit – South and Tarneit (West) – Mount Cottrell.

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Demand Considerations DEMOGRAPHIC DRIVERS OF DEMAND, TARNEIT (2021)

DEMOGRAPHIC INDICATORS The 25-44 years (41%) age cohort makes up the largest segment of Tarneit’s population, whilst the predominant household type is Couples with Children (59%).

The median age of Tarneit’s residents is 30 years, notably below that of Metropolitan Melbourne. More than 60% of Tarneit’s population were born overseas, and of those, 53% were born in India.

Tarneit is a diverse suburb with the majority of its residents born overseas. Tarneit is home to many young families as evidenced by its young median age and large proportion of family households.

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% OF POPULATION 25-44 YEARS-OLD Tarneit

Metro Melbourne

42%

31%

MEDIAN AGE Tarneit

PREDOMINANT HOUSEHOLD TYPE Couples With Children Tarneit

Metro Melbourne

59%

35%

TOP 3 COUNTRIES OF BIRTH (Non-Australian Residents, % of Population)

Metro Melbourne

30 years 37 years

India, New Zealand & Philippines

Total Born Overseas

65%

61%

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Demand Considerations DEMOGRAPHIC DRIVERS OF DEMAND, TARNEIT (2021)

SOCIO-ECONOMIC INDICATORS The primary occupation for residents in Tarneit in 2021 was Professionals (21%) and the primary industry of employment was Transport, Postal & Warehousing(14%).

The median annual household income of residents in Tarneit was $109,000 in 2021. This measured above the metropolitan Melbourne equivalent ($99,000).

Residents of Tarneit tend to be welleducated and employed in well paying jobs across a diverse range of industries and occupations. Greater purchasing power has the potential to lead to price and rental growth as these households can afford to live in the area.

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PRIMARY OCCUPATION

PRIMARY INDUSTRY OF EMPLOYMENT

Professionals

Transport, Postal & Warehousing

Tarneit

Metro Melbourne

21%

27%

Tarneit

Metro Melbourne

14%

5%

MEDIAN ANNUAL HOUSEHOLD INCOME

LEVEL OF EDUCATION

Bachelor Degree or Higher

Tarneit

Metro Melbourne

Tarneit

Metro Melbourne

$109,000

$99,000

+36%

+30%

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Supply Considerations

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Supply Considerations DWELLING MIX, TARNEIT (2021)

DWELLING MIX Tarneit comprises a high proportion of detached housing (90%) with some representation from townhouses (10%, as at the 2021 Census).

Tarneit’s dwelling mix contains a significantly larger proportion of detached dwellings than metropolitan Melbourne (68%).

Tarneit’s location in Melbourne’s western growth corridor makes it one of the leading providers of new detached dwellings in Victoria. The suburb has seen an increase in the proportion of townhouses with 10% of all dwellings being townhouses, a greater proportion in comparison to other greenfield markets across metropolitan Melbourne.

Townhouses includes all semi-detached dwellings.

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Supply Considerations HOME OWNERSHIP

HOME OWNERSHIP, TARNEIT (2021)

Tarneit is a relatively new suburb making it a popular destination for first home buyers attracted by the area’s comparative affordability. As a result, Tarneit comprises a significant proportions of homes being purchased (61%) but only a small number of homes which are owned outright (10%).

In comparison to Metropolitan Melbourne, a greater proportion of dwellings in Tarneit are currently mortgaged or rented.

Across Tarneit, a significant proportion of houses are rented (29%, private rental & other), indicating demand from investors to purchase in the suburb. The most likely purchasers of new dwellings in Tarneit are first home buyers followed by investors.

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Supply Considerations BUILDING APPROVALS – TARNEIT* (2016-2023)

NEW SUPPLY – BUILDING APPROVALS Building approvals for new residential dwellings in Tarneit* averaged around 310 approvals per quarter during 2016-2019.

Supported by the HomeBuilder Grant and historically low interest rates, there has been an evident uplift in market activity since 2020, with quarterly approvals averaging 500 since Q1 2020; though approvals have tapered since their Q3 2021 peak following increased construction costs and rising interest rates.

The significant volume of land sales through 2020/21 and 2021/22 are supporting approvals.

However, tightened land supply in Melbourne’s West may contribute to a further contraction in approvals moving forward.

*Study area comprises the following SA2 areas: Tarneit – Central, Tarneit – North, Tarneit – South and Tarneit (West) – Mount Cottrell.

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Lot Sales / Resales Tarneit

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Tarneit- Lot Sales

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Street Address

Suburb

Estate

Sale Price

Sale Date

Settlement Date

Lot Area (sq.m.)

27 Cinnamara Circuit

Tarneit

Newgate

$452,000

Jan-24

Jan-24

448

31 Pollen Road

Tarneit

Unity Park

$312,000

Dec-23

Dec-23

294

13 Jernigan Road

Tarneit

-

$350,000

Dec-23

Dec-23

350

12 Canter Road

Tarneit

Creekstone

$300,000

Dec-23

Dec-23

262

33 Cinder Drive

Tarneit

The Grove

$360,000

Dec-23

Dec-23

388

17 Mauvelous Avenue

Tarneit

-

$255,000

Nov-23

Nov-23

238

24 Yarlington Road

Tarneit

Orchard

$260,000

Nov-23

Nov-23

235

488 Hogans Road

Tarneit

The Grove

$385,000

Nov-23

Dec-23

381

51 Feronia Avenue

Tarneit

Alamora

$310,000

Nov-23

Dec-23

294

7 Rambler Boulevard

Tarneit

Marigold

$373,000

Oct-23

Nov-23

375

58 Congo Drive

Tarneit

-

$380,000

Oct-23

Nov-23

400

3 Feast Way

Tarneit

-

$390,000

Oct-23

Oct-23

392

28 Mendocino Crescent

Tarneit

Newgate

$255,000

Sep-23

Oct-23

239

10 Gowar Road

Tarneit

Emerald Park

$325,000

Aug-23

Sep-23

336

484 Hogans Road

Tarneit

The Grove

$340,000

Sep-23

Oct-23

328

44 Coronado Way

Tarneit

Alamora

$420,000

Sep-23

Sep-23

400

38 Volley Street

Tarneit

Stadio United

$316,000

Aug-23

Oct-23

293

26 Yarlington Street

Tarneit

Orchard

$267,000

Sep-23

Nov-23

247

31 Blenril Avenue

Tarneit

Orchard

$285,000

Sep-23

Dec-23

263

5 Damesfly Circuit

Tarneit

Grace

$275,000

Oct-23

Dec-23

262

28 Herbage Drive

Tarneit

Creekstone

$371,000

Sep-23

Dec-23

325

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1300 242 787 enquiry@charterkc.com.au www.charterkc.com.au Level 7 / 161 Collins Street Melbourne VIC 3000

This Report provides an independent and unbiased overview of the suburb Tarneit and has been carefully prepared by Charter Keck Cramer at the instruction of Frasers Property. This Report does not render financial or investment advice and neither Charter Keck Cramer nor any persons involved in its preparation accepts any form of liability for its contents. The information contained herein was compiled in September 2023 and should not be relied upon to replace professional advice on specific matters. Charter Keck Cramer is not providing advice about the suitability of investment in any specific project or financial product and is not a holder of an Australian Financial Services Licence.

This report is Copyright and cannot be reproduced without written permission of Charter Keck Cramer. © 2023 Charter Keck Cramer Sources: Charter Keck Cramer, Australian Bureau of Statistics, APM, SQM Research, Australian Government – Centre for Population, Economist Intelligence Unit, Plan Melbourne, VIF 2023, Times Higher Education World University Rankingswww.charterkc.com.au 2023.

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