Quarterly Market Insights December Quarter 2018
TABLE OF CONTENTS Foreword
04
VICTORIA Market Drivers
08
Land Market
10
Apartments and Townhouses
16
Spotlight - Foreign Investment
18
QUEENSLAND Market Drivers
22
Land Market
26
Apartments and Townhouses
34
Julian Coppini Chief Operating Officer j.coppini@oliverhume.com.au
FOREWORD
Property markets in Victoria continue to moderate retreating from recent peaks. In addition to tighter lending conditions, uncertainty regarding future finance availability and the forthcoming Federal election remain key drivers of the market. As we have noted in previous reports, the current moderation in the Victorian property market was to be expected, not least because booming markets inevitably run their course. However, the scene is being set for the next cycle which may commence sooner than is commonly expected. Population growth remains at near record highs. Employment growth remain robust driven, in part, by infrastructure spending, renewed confidence and a diverse range of industries. In Queensland the land market remains stable. While sales volumes have been relatively resilient, prices continue to edge higher.
An increasing number of people, many of them interstate migrants, are discovering the affordability, employment and lifestyle advantages of Queensland. While also buffeted by the headwinds of tighter lending conditions, medium and high density markets also face their own unique dynamics. In particular, the moderation in the apartment supply pipeline is now well underway with approvals continuing to slide. The structural shift to medium density is also now confirmed - a necessary transformation if Australia is to manage the rapid change and population growth underway in our cities and urban centres. In a rapidly evolving and dynamic market, Oliver Hume, led by our research team, remains committed to providing our clients and partners with the latest data, property intelligence and insights to make the right decisions. This latest quarterly market report is an invaluable tool for strategic decision making and draws upon a range of data sets including our own proprietary intelligence.
We believe that the best days of the Queensland land market are to come.
4
QUARTERLY MARKET INSIGHTS QUARTER 2018 2018 QUARTERLY MARKET INSIGHTSDECEMBER DECEMBER QUARTER
Perth
Nanjing
CHINA Shanghai
Fuzhou
Darwin
NORTHERN TERRITORY QUEENSLAND Brisbane
WESTERN AUSTRALIA
Gold Coast
SOUTH AUSTRALIA NEW SOUTH WALES Sydney Adelaide Canberra
VICTORIA Melbourne
TASMANIA Hobart
QUARTERLY MARKET INSIGHTSDECEMBER DECEMBER QUARTER 2018 2018 QUARTERLY MARKET INSIGHTS QUARTER
5
VICTORIA
VICTORIA
George Bougias
MARKET DRIVERS
Head of Research g.bougias@oliverhume.com.au
Victoria's economy continues to grow...
Victoria's economy continues to grow supported by robust population growth.
Over the same period Victoria added over 138,000 people, the largest population increase of any state.
Population growth remains at near record highs.
Strong population grow is supported by near record levels of overseas and interstate migration.
In the 12 months to 30 June 2018 Victoria recorded the highest population growth rate of all states (2.2%).
Victoria - annual population change (components) 160.000 140.000 120.000
Population change (no.)
100.000 80.000 60.000 40.000 20.000 0 -20,000
Net Interstate Migration
8
QUARTERLY MARKET INSIGHTS
Net Overseas Migration
DECEMBER QUARTER 2018
Total Increase
Jun 2017
Jun 2018
Jun 2016
Jun 2014
Jun 2015
Jun 2012
Jun 2013
Jun 2011
Jun 2010
Jun 2009
Jun 2007
Jun 2008
Jun 2006
Jun 2005
Jun 2003
Jun 2004
Jun 2001
Jun 2002
Jun 1999
Jun 2000
Jun 1997
Jun 1998
Jun 1996
Jun 1994
Natural Increase
Jun 1995
Jun 1992
Jun 1993
Jun 1991
Jun 1990
Jun 1989
Jun 1987
Jun 1988
Jun 1986
Jun 1985
-40,000
Source: ABS, Moving Annual Total, Oliver Hume Research.
...driving jobs growth Robust economic grow th is driving jobs growth and reducing unemployment. Victoria's strong economic performance reflects a broader process of structural change underway—a process which can be traced at least back to the end of the mining boom and the global financial crisis. This process has seen Australia's two largest and diversified states, Victoria and New South Wales, increase their share of national output and population, driven by growth in various industries including services and construction. On average, Victoria’s unemployment rate has been the lowest nationally over the decade and is now the lowest in more than 10 years. In 2018 over 120,000 jobs were created in Victoria including almost 90,000 full time jobs.
Infrastructure spending continues to support economic growth and is forecast to remain high.
State unemployment rate %
8
7
6
5
4
3
2 2009 Queensland
2014 New South Wales
Victoria
2019
Western Australia
Tasmania
South Australia Source: ABS
Victorian government infrastructure investment ($b) $16
$14
$12
$10
$8
$6
$4
$2
-
2005-06
2007-08
Budget and forward estimates
2009-10
2011-12
2013-14
2015-16
2017-18
2019-20
2021-22
Source: Victorian Department of Treasury and Finance, Oliver Hume Research. Notes: (a) Includes general government net infrastructure investment and estimated construction costs for Partnerships Victoria projects. (b) Excludes the impact of the medium-term lease over the operations of the Port of Melbourne and the divestment of Victoria’s share of Snowy Hydro Limited.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
9
VICTORIA
LAND MARKET
Land market is moderating
The land market is moderating with sales volumes declining and prices softening in some locations. Nevertheless, average value rates are still rising as lot sizes are reduced. Uncertainty–especially around l e n d i n g , t h e b a n k i n g Ro y a l
Commission and, potentially, further declines in general property prices— is perhaps the major factor affecting sentiment. The forthcoming Federal election and potential changes to negative gearing and capital gains taxation are also weighing on the market and impacting confidence.
Median lot prices - all lots Heather = Region
17-Dec
18-Dec
Price Change ($)
Percentage Change (%)
Metro. Melbourne
$322,500
$333,950
$11,450
4%
Cardinia
$322,000
$357,000
$35,000
11%
Casey
$360,000
$337,700
($22,300)
6%
Hume
$348,000
$339,000
($9,000)
3%
Melton
$301,900
$300,000
($1,900)
1%
Mitchell
$277,000
$268,250
($8,750)
3%
Whittlesea
$322,500
$320,000
($2,500)
1%
Wyndham
$320,000
$330,500
$10,500
3%
Median lot prices (available) $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000
QIII. '06 QIV. '06 QI. '07 QII. '07 QIII. '07 QIV. '07 QI. '08 QII. '08 QIII. '08 QIV. '08 QI. '09 QII. '09 QIII. '09 QIV. '09 QI. '10 QII. '10 QIII. '10 QIV. '10 QI. '11 QII. '11 QIII. '11 QIV. '11 QI. '12 QII. '12 QIII. '12 QIV. '12 QI. '13 QII. '13 QIII. '13 QIV. '13 QI. '14 QII. '14 QIII. '14 QIV. '14 QI. '15 QII. '15 QIII. '15 QIV. '15 QI. '16 QII. '16 QIII. '16 QIV. '16 QI. '17 QII. '17 QIII. '17 QIV. '17 QI. '18 QII. '18 QIII. '18 QIV. '18
$0
Cardinia Hume Mitchell
10
Casey Whittlesea Melton Wyndham Median 'Retail' Land Price.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
Source: Oliver Hume Research.
Metropolitan Melbourne growth area project land sales index*
400
350
300
250
200
150
100
50
Dec-18
Dec-17
Dec-16
Dec-15
Dec-14
Dec-13
Dec-12
Dec-11
Dec-10
Dec-09
Dec-08
Dec-07
Dec-06
Dec-05
Dec-04
0
*December 2004 equals 100
Metropolitan Melbourne median lot prices (sold) $400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0 Mitchell QIV.17
Cardinia QI.18
QII.18
Casey QIII.18
Hume
Melton
QIV.18
QUARTERLY MARKET INSIGHTS
Whittlesea
Wyndham
Source: Oliver Hume Research.
DECEMBER QUARTER 2018
11
VICTORIA
LAND MARKET
Conditions are expected to remains soft in the short to medium term
Key indicators, such as clearance rates and time on market suggest that conditions are unlikely to change in the short-term. Clearance rates remain low with moderate sales levels being accompanied by a higher level of releases. Time on market, the time taken to sell a lot from the date of release, also continues to increase and now exceeds 50 days—a recent high.
Metropolitan Melbourne, all growth area | average time on market (days) 200 180 160 140 120 100 80 60 40 20
QIV. '18
QIII. '18
QII. '18
QI. '18
QIV. '17
QIII. '17
QII. '17
QI. '17
QIV. '16
QIII. '16
QII. '16
QI. '16
QIV. '15
QIII. '15
QII. '15
QI. '15
QIV. '14
QIII. '14
QII. '14
QI. '14
QIV. '13
QIII. '13
QII. '13
QI. '13
QIV. '12
QIII. '12
QII. '12
0
Source: Oliver Hume Research.
12
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
Jan-16
Clearance Rate Clearance rate (Average)
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
Dec-18
Nov-18
Oct-18
Sep-18
Aug-18
Jul-18
Jun-18
May-18
Apr-18
Mar-18
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Metropolitan Melbourne growth areas land clearance rate 70%
60%
50%
40%
30%
20%
10%
0%
Source: Oliver Hume Research.
13
METROPOLITAN MELBOURNE LOT PRICES (DECEMBER QUARTER 2018)
19
8 13 15
12
17
16 7
5 6
23
1
MELBOURNE CBD
3
22
19 11
2
10
GEELONG
4
14
21
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
12.5 x 28
14 x 32
Min
Max
Min
Max
1
Albright
333,900
334,900
381,900
382,900
2
Aquarevo
-
-
450,900
450,900
3
Arcadia
315,000
315,000
357,000
357,000
4
Armstrong
236,900
261,900
266,900
291,900
5
Aspire
-
-
373,900
378,900
6
Atherstone
248,000
248,000
286,000
286,000
7
Aurora
368,000
368,000
-
-
8
Cloverton
292,000
299,000
348,000
363,000
9
Delaray
335,900
335,900
385,900
385,900
10
Gen Fyansford
-
-
335,000
345,000
11
Harpley
276,000
288,000
345,000
409,000
12
Highlands
322,500
337,000
337,000
429,000
13
Merrifield
311,500
312,000
362,000
366,000
14
Minta Farms
393,000
395,000
451,000
459,000
15
Olivine
273,000
286,000
310,000
320,000
16
Rathdowne
341,900
341,900
404,900
404,900
17
Rosenthal
-
-
314,000
314,000
18
Rothwell
-
-
-
-
19
Upper Point Cook 417,000
417,000
521,000
541,000
20
Wallara Waters
-
-
277,000
277,000
21
Warralily Grange
-
-
294,000
305,000
22
Windermere
258,500
258,500
303,500
328,500
23
Woodlea
288,300
288,300
339,200
339,700
14
9
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
15
VICTORIA – MARKET OVERVIEW
APARTMENTS AND TOWNHOUSES
Townhouses are becoming a preferred option for many buyers across metropolitan Melbourne
Medium and high-density dwellings have become increasingly attractive to buyers over the last decade. The rising prices of houses has made apartments, townhouses and other products relatively affordable. However, each markets faces its own unique opportunities and challenges. As demand and supply fundamentals in the apartment market have softened in recent years, so too we expect an improvement over the medium term as fundamentals improve. The improvement will be driven by the decline in the supply of new apartments, while underlying demand, as reflected in population growth, will continue to increase. Hence, over the next few years apartment completions in Melbourne are expected to be around a third of the level observed during peak levels. This will coincide with population growth reminding at record highs. Townhouses are becoming a preferred option for many buyers across metropolitan Melbourne.
16
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
In inner (0 to 10 km from the CBD) and middle Melbourne (10 to 20 km from the CBD), townhouses provide an affordable alternative to established housing—a market which has experienced strong price growth in the current cycle. While established house prices have retreated from the record highs observed (and may see some renewed buyer interest) this is not expected to dampen townhouse demand. Townhouses are now firmly established amongst key buyer groups and, in many cases, are now the preferred option. Townhouses are also seeing strong buyer interest in outer Melbourne (20 km from the CBD). Affordability and a sharp price point are key drivers of demand for townhouses in these locations. First home buyers and investors are amongst the principal buyers. H o w e v e r, t o w n h o u s e s a r e increasingly popular with other buyer groups. These include couples, singles and professionals.
Median dwelling prices - metropolitan Melbourne $900,000 $850,000 $800,000 $750,000 $700,000 $650,000 $600,000 $550,000 $500,000 $450,000
House
QIV. '18
QIII. '18
QII. '18
QI. '18
QIV. '17
QIII. '17
QII. '17
QI. '17
QIV. '16
QIII. '16
QII. '16
QI. '16
QIV. '15
QIII. '15
QII. '15
QI. '15
QIV. '14
QIII. '14
QII. '14
QI. '14
QIV. '13
$400,000
Unit
December quarter 2018 median prices Region
Dec-2018 Quarter Sep-2018 Quarter
Percentage Change (%) Quarter Annual
Metropolitan Melbourne House
$796,500
$827,000
-3.7%
1.4%
Unit and apartment
$589,000
$599,000
-1.7%
1.8%
House
$411,000
$401,000
2.5%
5.5%
Unit and apartment
$314,000
$285,000
10.2%
2.8%
$1,380,500
$1,447,000
-4.6%
-4.1%
$588,500
-$595,000
-1.1%
0.0%
House
$906,000
$965,000
-6.1%
-2.2%
Unit and apartment
$646,000
$657,500
-1.7%
0.3%
House
$647,000
$671,000
-3.6%
3.1%
Unit and apartment
$519,500
$521,000
-0.3%
8.1%
Regional Victoria
Inner Melbourne House Unit and apartment Middle Melbourne
Outer Melbourne
Source: Real Estate Institute of Victoria (REIV). Houses include detached houses, terraced houses, semi-detached houses, holiday houses, duplexes and granny flats. Units & apartments include flats, units, apartments, townhouses, penthouses, villas, residential warehouse conversions and bed-sits.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
17
VICTORIA – MARKET OVERVIEW
SPOTLIGHT FOREIGN INVESTMENT
Foreign investment into Australia’s real estate sector plays an important role in increasing dwelling supply
The latest annual report of the Foreign Investment Review Board (FIRB) highlights key current and emerging trends and drivers shaping foreign investment into Australia including especially the residential market. Foreign investment into Australia’s residential sector plays an important role in increasing dwelling supply. Some of the key highlights from the 2017-18 FIRB annual report include: • The value of residential real estate approvals fell $17.5 billion (58%) between 2016 and 2018. This was due mostly to a moderation in foreign demand for residential real estate • For the first time since 2012– 13, the United States (and not China) was the largest source country for approved proposed investment across all sectors (both real estate and nonreal estate). However, a major increase in real estate was a key factor
18
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
• The decline in new dwelling related approvals from China was driven in part by tighter capital controls from China • A l t h o u g h C h i n e s e d e m a n d for residential real estate has declined the majority of residential real estate approvals was for Chinese entities • The vast majority of approvals ( 8 4 % ) b y n u m b e r wa s fo r c a te g o r i e s, i n c l u d i n g n e w dwellings and vacant land for development, that increase Australia’s housing stock • There was a decline in New South Wales’ share of residential real estate approvals. This was offset by increases in Victoria and Western Australia’s shares.
Share of residential real estate approvals by state and territory in 2017-18, by number 2%
7%
23%
SA
17%
ACT
NSW
QLD
TAS
VIC
WA
Notes: This chart excludes approvals that apply to more than one state or territory. The Northern Territory has not been allocated a share for the purpose of this chart due to the proportionately small number of approvals. Due to the above and rounding this chart does not add to 100 per cent.
46% 3% 1%
Source: FIRB, Oliver Hume Research.
Approvals by industry sector 2016-2017
2017-2018
14,339 $197.7b
11,060 $163.1b
Approvals
Approvals
Value
Value
NON-REAL ESTATE NON-REAL ESTATE
$56.5b
REAL ESTATE
$15.9b
$63.2b
$30.0b
REAL ESTATE $12.5b $17.4b
$40.9b $43.7b
$16.6b
$39.5b
$6.0b
$3.8b $7.0b
$7.9b 2016-17
Agriculture, forestry & fishing Finance & Insurance Manufacturing, electricity & gas Mineral exploration & development Services Real estate - commercial Real estate - residential Source: FIRB, Oliver Hume Research.
2017-18 QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
19
QUEENSLAND
QUEENSLAND
Amanda Bittenbinder
MARKET DRIVERS
Senior Research Analyst a.bittenbinder@oliverhume.com.au
An increasingly diverse economy is supporting Queensland's economic growth
In the year to the June quarter 2018, Queensland recorded robust jobs growth (3.1%). Around 165,700 new jobs were created. Strong jobs growth has seen incomes rise, further supporting household spending. Indeed, Queensland’s household consumption grew by 2.5% in 2017-18. This was the fastest growth since 2013-14.
The Queensland economy includes a range of industries such as construction, tourism, manufacturing, agriculture, resources and services.
Ex p o r ts a r e a n i n c r e a s i n g l y important component of the state’s growth. Queensland’s export earnings exceeded $94 billion in 2017-18, a new record.
Although recent growth has been steady, Queensland’s economy has traditionally outgrown the national economy, and is expected to return to trend.
Consistent with broader trends nationally, Queensland’s business investment levels remain high after surging in 2017-18. Going forward the state's economic growth is expected to reach 3% in 2018-19 and 2.75% in 2019-20. Continued employment growth should see the State’s unemployment rate decline to 6% by mid-2020.
Source: The State of Queensland (Queensland Treasury) Mid Year Fiscal and Economic Review 2018-19.
22
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
Growth will also be supported b y i n fr a s t r u c t u r e s p e n d i n g . The Government’s $46 billion infrastructure program includes several major projects such as the Cross River Rail, upgrades to the M1 and the Bruce Highway, and the Cairns Convention Centre and Townsville water pipeline.
Real economic growth1, Queensland and Australia 6%
5%
4%
3%
2%
1%
0 2007-08 Queensland
2008-09 Australia
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
1 Gross State/Domestic Product. Chain volume measure (CVM), 2015-16 reference year. 2018-19 and 2019-20 are forecasts. Source: Queensland State Accounts - June quarter 2018 for historical data, Queensland Treasury for Queensland forecasts, and 2018-19 Commonwealth Budget for Australia forecasts.
Business investment, Queensland 12
10 LNG boom
$ billions
8
6
4
2
0 Sep-02 New building
Sep-04
Sep-06 Engineering construction
Sep-08
Sep-10
Sep-12
Machinery and equipment 1
Sep-14
Sep-16
Sep-18
Source: ABS 5206.0. CVM, quarterly, trend. New building includes shops, offices, factories etc.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
23
QUEENSLAND
POPULATION GROWTH
Queensland’s population continues to rebound...
Queensland’s population continues to rebound supported by increasing levels of interstate and overseas migration.
Although growth remains below that of some other jurisdictions, especially Victoria which is the national population growth leader, Queensland’s population growth continues to strengthen. In the year ending 30 June 2018 Queensland’s population reached 5 million people growing by 84,500 people and 1.7%.
Queensland population change, growth components 120,000
100,000
80,000
60,000
40,000
20,000
0 Net Overseas Migration
Natural Increase
...supported by both interstate and overseas migration.
24
QUARTERLY MARKET INSIGHTS
Net Interstate Migration
Total Population Growth
Queensland’s interstate migration, in particular, has been a key driver of overall population growth. In the year ended 30 June, Queensland’s interstate migration was the highest in Australia reaching 24,700 people, an increase from 17,800 people in the previous year.
DECEMBER QUARTER 2018
Source: ABS, Oliver Hume Research.
Queensland’s interstate migration was considerably higher than all other jurisdictions with only three other states and territories recording positive net interstate migration - Victoria (14,300 people), Tasmania (2,400 people) and the Australian Capital Territory (600 people).
NSW
Interstate arrivals
-20 VIC
Interstate departures
0
20
40
Net interstate migration
60
QUARTERLY MARKET INSIGHTS
QLD
80
100
DECEMBER QUARTER 2018
Jun-2018
Mar-2018
Dec-2017
Sep-2017
Jun-2017
Mar-2017
Dec-2016
Sep-2016
Jun-2016
Mar-2016
Dec-2015
Sep-2015
Jun-2015
Mar-2015
Dec-2014
Sep-2014
Jun-2014
Mar-2014
Dec-2013
Sep-2013
Jun-2013
Mar-2013
Dec-2012
Sep-2012
Jun-2012
Mar-2012
Dec-2011
Sep-2011
Jun-2011
Mar-2011
Dec-2010
Sep-2010
Jun-2010
Mar-2010
Dec-2009
Sep-2009
Jun-2009
Mar-2009
Dec-2008
Sep-2008
Jun-2008
Mar-2008
Net interstate migration (qtrly)
10,000
8,000
6,000
4,000
2,000
0
-2,000
-4,000
-6,000
-8,000
Source: ABS, Oliver Hume Research.
Interstate migration
ACT
NT
TAS
WA
SA
QLD
VIC
NSW
Source: ABS, Oliver Hume Research.
120
25
QUEENSLAND
LAND MARKET
Although sales transactions have dipped toward the end of 2018 the market remains steady
Although sales transactions have dipped toward the end of 2018 the market remains steady. In contrast to the volatility observed in the broader Melbourne and Sydney residential markets —and in the Melbourne new land market—conditions in the SouthEast Queensland residential market and the land market specifically have been much more stable.
South East Queensland project land sales (qtrly) 2,500
2,000
Number
1,500
1,000
500
Se
pDe 12 cM 12 ar -1 Ju 3 nSe 13 pDe 13 c1 M 3 ar Ju 14 n1 Se 4 pDe 14 cM 14 ar Ju 15 n1 Se 5 p1 De 5 cM 15 ar -1 Ju 6 n1 Se 6 pDe 16 c1 M 6 ar Ju 17 nSe 17 pDe 17 c1 M 7 ar Ju 18 n1 Se 8 pDe 18 c18
0
SEQ Total Sales
26
SEQ | Long Run Average
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
27
QUEENSLAND
Matt Barr
PROJECT AND CORRIDOR DATA
ACTIVE PROJECTS
TOTAL LOTS RELEASED
The number of active projects in all SouthEast Queensland municipalities was up for the December quarter, with various estates launching. Overall, the total represented a 5% increase on the previous quarter. This number is likely to decrease next quarter as several developments are reaching maturity.
The number of lots released over the quarter declined by 7%, when compared to the previous quarter.
December quarter 2018
December quarter 2018
139
5.0% from previous quarter
1,585
7.0% from previous quarter
TOTAL SALES
TOTAL UNSOLD
The December quarter 2018 saw an overall decrease in the total lots sold. The results, however, reflect a common trend typically experienced over the December period. The reduction of overall sales has been attributed to the availability of stock.
Total lots remaining unsold at the end of December quarter decreased, with a total ‘overhang’ of over 2,100 lots, 10% lower than that of the previous quarter.
December quarter 2018
December quarter 2018
1,216
28
Project Director- QLD m.barr@oliverhume.com.au
17.0% from previous quarter
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
2,161
10.0% from previous quarter
LOT SIZES
Project land sales
Ipswich
27%
Logan
22%
Gold Coast
21%
Buyers are remaining focused on small to medium sized blocks with most sales transactions occurring in the 301-500 sqm size bracket.
Median prices by lot size segments, December quarter 2018
Brisbane
16%
Moreton Bay
13%
Redland
1%
LOT SIZES
MARKET SHARE
MEDIAN PRICE
0 – 300 sqm
6%
$210,000
301 – 400 sqm
36%
$235,250
401 – 500 sqm
31%
$240,750
501 – 600 sqm
17%
$244,000
> 600 sqm
10%
$300,000
Source: Oliver Hume Research (Land sales between 0 - 1,000 Sqm.)
SEQ project land sales market share by product type 100% 90% 80%
14% 13%
11%
10%
11%
10%
12%
12%
13%
14%
17%
14%
31%
29%
31% 31%
31%
70% 60%
32%
50% 40% 30%
38%
36%
34%
41%
36%
20%
36%
10% 0%
6%
8%
6%
Q4 '17
Q1 '18
Q2 '18
Less than 300 sqm
301-400 sqm
401-500 sqm
501-600 sqm
10% Q3 '18 601-1000 sqm
6%
7%
Q4 '18
Long-run Average
Source: Oliver Hume Research (Land sales between 0-1000 sqm).
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
29
QUEENSLAND
PROJECT AND CORRIDOR DATA LOT PRICES Over the quarter, the South East Queensland median land price increased by 3% when compared to the same period in 2017 while the median land size over this period decreased by 3%.
South East Queensland median land price (Rolling annual average of project land sales) BRISBANE
$385,625
5%
Quarterly change
2%
Annual change
GOLD COAST
$339,188
2%
Quarterly change
8%
Annual change
IPSWICH
$208,113
0%
Quarterly change
2%
Annual change
LOGAN
$216,688
1%
Quarterly change
2%
Annual change
MORETON BAY
$253,250
0%
Quarterly change
2%
Annual change
REDLAND
$303,125
0%
Quarterly change
1%
Annual change
SOUTH-EAST QUEENSLAND
$242,125
1%
Quarterly change
3%
Annual change
Source: Oliver Hume Research.
30
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
VALUE RATES Average value rates continue to increase due to declining lot sizes. Average value rates have now risen for the fourth consecutive quarter.
sits at $572 per sqm. Brisbane remains the most expensive market at $957 per sqm, while Ipswich leads as the most affordable local government area ($476 per sqm).
South East Queensland's average value rate rose by 7% compared to the same period in 2017 and now
SEQ project land sales - average value rate (December quarter 2018) South East Queensland
$572 $774
Redland
$632
Moreton Bay
$527
Logan
$476
Ipswich
$740
Gold Coast
$957
Brisbane $0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1000
Source: Oliver Hume Research.
Annual change in land size and value rate -3%
South East Queensland
7%
-10%
Redland
11%
-9%
Moreton Bay
8% 1% 1%
Logan
-2%
Ipswich
4%
-8%
Gold Coast
17% 0%
Brisbane -15% Annual Change in Value Rate
-10%
-5%
2% 0%
5%
10%
15%
20%
Source: Oliver Hume Research.
Annual Change in Median Lot Size
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
31
QUEENSLAND
MARKET SNAPSHOT
BRISBANE
GOLD COAST
REDLAND
MOST POPULAR SELLING LOT TYPE
301-400 sqm (56%)
MOST POPULAR SELLING LOT TYPE
401-500 sqm (36%)
MOST POPULAR SELLING LOT TYPE
301-400 sqm (50%)
MEDIAN PRICE
$385,625 (2%*)
MEDIAN PRICE
$339,188 (8%*)
MEDIAN PRICE
$303,125 (-1%*)
MEDIAN VALUE RATE $957 (2% ) *
annual change
MEDIAN VALUE RATE $740 (17% ) *
annual change
*
IPSWICH
MEDIAN VALUE RATE $774 (11%*) annual change
*
*
MORETON BAY
LOGAN
MOST POPULAR SELLING LOT TYPE
301-400 sqm (32%)
MOST POPULAR SELLING LOT TYPE
301-400 sqm (35%)
MOST POPULAR SELLING LOT TYPE
301-400 sqm (48%)
MEDIAN PRICE
$208,113 (2%*)
MEDIAN PRICE
$216,688 (2%*)
MEDIAN PRICE
$253,250 (-2%*)
MEDIAN VALUE RATE $476 (4%*) annual change
32
MEDIAN VALUE RATE $527 (1%*) annual change
*
*
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
MEDIAN VALUE RATE $632 (8%*) annual change
*
KEY CORRIDORS - Number of active projects
ACTIVE PROJECTS
ACTIVE PROJECTS
24
MORETON BAY
25
Unchanged
7%
BRISBANE
ACTIVE PROJECTS
2
REDLAND
IPSWICH
33%
LOGAN
GOLD COAST
ACTIVE PROJECTS
28 8%
ACTIVE PROJECTS
34 13%
ACTIVE PROJECTS
23 5%
QUARTERLY MARKET INSIGHTSDECEMBER DECEMBER QUARTER 2018 2018 QUARTERLY MARKET INSIGHTS QUARTER
33
QUEENSLAND
APARTMENTS AND TOWNHOUSES
The Brisbane and Gold Coast apartment markets continue to operate independently
The Brisbane and Gold Coast apartment markets are now being driven by different dynamics.
the apartment market. In response to these factors, some projects are being deferred and abandoned.
Brisbane conditions remain subdued as current supply is absorbed slowly, while the Gold Coast records strong sales for the year. A common theme throughout both markets is the pressure felt by developers to produce owner occupier products as investor demand continues to dissipate.
At the opposite end of the spectrum, the Gold Coast market continues to record good sales results. Over the past year the Gold Coast has experienced higher supply levels but the future pipeline is expected to decrease as funding has become more difficult to obtain.
The current Brisbane market is still feeling the pressure of tighter lending conditions as well as negative sentiment surrounding
Brisbane inner city and Gold Coast apartment average value rates Gold Coast LGA
Northshore
Inner West
Inner South
Inner North
Inner East
Brisbane CBD $0 1 Bed
34
2 Bed
3 Bed
$2,000
$4,000
Median value rate
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2018
$6,000
$8,000
$10,000 Source: Oliver Hume Research.
NORTHSHORE
INNER NORTH
INNER WEST BRISBANE CBD
INNER EAST
INNER SOUTH
OFF-THE-PLAN MEDIAN PRICE AND VALUE RATES BRISBANE CBD Apartment Price Price per sqm Active Projects
GOLD COAST
$747,500 $9,462 3
INNER SOUTH Apartment Price Price per sqm Active Projects
Price per sqm Active Projects
Apartment Price Price per sqm Active Projects
INNER WEST
$577,500 $5,651 67
INNER NORTH
$507,000 $6,186 31
Apartment Price Price per sqm Active Projects
Apartment Price Price per sqm Active Projects
$599,000 $6,240 15
INNER EAST
$560,000 $5,803 15
Apartment Price Price per sqm Active Projects
$582,500 $7,644 12 Source: Oliver Hume Research.
NORTH SHORE Apartment Price
GOLD COAST
$555,000 $6,453 10
QUARTERLY MARKET INSIGHTSDECEMBER DECEMBER QUARTER 2019 2018 QUARTERLY MARKET INSIGHTS QUARTER
35
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Important: The information in this document has been prepared a general guide only and does not constitute advice. We have relied upon information from sources generally regarded as authoritative. Whilst the information has been prepared in good faith and with due care, no representation is made in relation to the accuracy of the whole or any part of the publication. No liability for negligence or otherwise is assumed for any loss or damage suffered by any party resulting from their use of this publication. The whole or any part of this publication must not be mirrored, reproduced or copied, without written consent. The document may contain future forecasts of a range of variables, which can be affected by a significant number of unpredictable factors, including social and economic conditions. It only represents the best judgements and estimates, made by Oliver Hume Research. No assurances can be given that the forecasts will be achieved. This document should be read in conjunction with any other documentation prepared by the marketing agent and associated consultants.