Quarterly Market Insights December Quarter 2019
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
1
2
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
TABLE OF CONTENTS Foreword
04
NATIONAL HIGHLIGHTS National Snapshot
08
Population Growth
09
VICTORIA Market Drivers
12
Land Market
14
Apartments and Townhouses
22
Development Sites
24
QUEENSLAND Market Drivers
28
Land Market
30
Apartments and Townhouses
38
FEATURE ARTICLE Regional Victoria - An Emerging Property Hotspot
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
42
3
Julian Coppini Chief Operating Officer j.coppini@oliverhume.com.au
FOREWORD The recovery in the national residential property market continues with an increasing number of markets now seeing higher sales and price growth.
Unemployment remains low but above what the policy makers have been aiming for despite subdued wages growth.
Confidence is returning underpinned by a range of factors including low interest rates, robust population growth and a stable economy (although growth remains below trend).
Recent challenges, such as the bushfires and the Coronavirus disease (COVID-19), will slow economic growth although their impact is uncertain.
CoreLogic reports that several property market indicators - including auction clearance rates and days on market – continue to improve nationally. Housing finance continues to rebound led by owner-occupiers but also, increasingly by investors who are steadily looking to re-enter the market. In Victoria, conditions in the greenfield market continue to improve. While prices have largely stabilised, sales volumes (underpinned by growing confidence and enquiries) continue to trend higher. The Queensland land market is also improving. Although sales volumes dipped in the December quarter (due to seasonal factors in part), prices continue to improve driven by the market’s relative affordability, improving economy and growing population. The Federal Government’s First Home Loan Deposit Scheme, which commenced this year is also supporting demand. The deeper than expected decline in residential construction remains important and is expected to have a range of impacts including a drag on growth and place upwards pressure on prices. With the property market recovery now wellunderway, a key focus remains the economy. Economic growth remains below-trend. In addition to the residential construction slowdown, weak consumer spending also remains an issue.
4
QUARTERLY MARKET INSIGHTS
Nevertheless, the economy has several positive tailwinds including low interest rates, tax cuts, infrastructure spending, and the continued recovery in the housing market. Continued strong population growth underpins the market’s recovery. Australia’s population growth remains high highs with the nation’s population increasing by around 381,600 people in the year to 30 June 2019. In terms of population growth, Victoria is the nation’s fastest growing state adding around 132,800 people over the same period an annual growth reaching 2.1% (compared to the national average of 1.5%). Queensland is Australia’s second fastest growing states with growth driven. In the year to 30 June 2019 Queensland’s population increased by around 85,700 people or 1.7%, (this was faster than New South Wales (1.4%), Western Australia and Tasmania (both 1.1%) and South Australia (0.9%). Providing our clients with the latest data and insights to better anticipate the future and make the right strategic decisions is a key priority for Oliver Hume. This latest quarterly report is an invaluable tool for understanding current and emerging trends in the property market and includes a range of data and indicators, including our own proprietary property intelligence, compiled and analysed by our specialist in-house research team.
DECEMBER QUARTER 2019
Perth
Darwin
NORTHERN TERRITORY QUEENSLAND WESTERN AUSTRALIA
Brisbane Gold Coast
SOUTH AUSTRALIA NEW SOUTH WALES Sydney Adelaide Canberra
VICTORIA Melbourne
TASMANIA Hobart
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
5
1.0 NATIONAL HIGHLIGHTS
1.0 NATIONAL HIGHLIGHTS
1.1
NATIONAL SNAPSHOT CASH RATE
ECONOMIC GROWTH
INFLATION
0.5%
1.7%
1.8%
UNEMPLOYMENT RATE
EMPLOYMENT GROWTH
WAGE GROWTH
5.1%
2.1%
2.2%
AVERAGE WEEKLY EARNINGS
HOUSEHOLD SAVING RATIO
NET FOREIGN LIABILITIES
$1,238
4.8%
49.4%
CONVERSION RATE
POPULATION
EMPLOYMENT RATIO
= US$0.67
1.6% ANNUAL GROWTH
RESIDENTIAL DWELLINGS
HOUSEHOLD WEALTH
HOUSEHOLD DEBT
$661K
774%
187%
AS A SHARE OF INCOME
AS A SHARE OF INCOME
RISKIER LENDING LOW
RISKIER LENDING LOW
NON-PERFORMING LOANS
7%
15%
1.0%
A$1
>90% LOAN TO VALUATION
25MIL
INTEREST ONLY
OF GDP
63%
RISING BUT LOW
Sources: Reserve Bank of Australia (RBA), Australian Bureau of Statistics (ABS).
8
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
Jun-1986 Mar-1987 Dec-1987 Sep-1988 Jun-1989 Mar-1990 Dec-1990 Sep-1991 Jun-1992 Mar-1993 Dec-1993 Sep-1994 Jun-1995 Mar-1996 Dec-1996 Sep-1997 Jun-1998 Mar-1999 Dec-1999 Sep-2000 Jun-2001 Mar-2002 Dec-2002 Sep-2003 Jun-2004 Mar-2005 Dec-2005 Sep-2006 Jun-2007 Mar-2008 Dec-2008 Sep-2009 Jun-2010 Mar-2011 Dec-2011 Sep-2012 Jun-2013 Mar-2014 Dec-2014 Sep-2015 Jun-2016 Mar-2017 Dec-2017 Sep-2018 Jun-2019
Annual Net Overseas Migration (000s)
Jun-1982
Annual Growth (000s) Annual Growth (%)
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
Jun-2019
Jun-2018
Jun-2017
Jun-2016
Jun-2015
Jun-2014
Jun-2013
Jun-2012
Jun-2011
Jun-2010
Jun-2009
Jun-2008
Jun-2007
Jun-2006
Jun-2005
Jun-2004
Jun-2003
Jun-2002
Jun-2001
Jun-2000
Jun-1999
Jun-1998
Jun-1997
Jun-1996
Jun-1995
Jun-1994
Jun-1993
Jun-1992
Jun-1991
Jun-1990
Jun-1989
Jun-1988
Jun-1987
Jun-1986
Jun-1985
Jun-1984
Jun-1983
Annual Growth (000s) 500
400
300 1.5
250
200 1.0
100
0 Annual Growth (%)
1.2
Population Growth
Australia’s preliminary estimated resident population increased by 381,600 people (1.5%) in the year ending 30 June 2019. Overseas migration remains the key driver of population growth.
Australia - Annual Population Growth 2.5
450
2.0
350
150
0.5
50
0.0
Source: ABS, Oliver Hume Research.
Australia - Annual Net Overseas Migration
350
300
250
200
150
100
50
0
Source: ABS, Oliver Hume Research.
9
2.0 VICTORIA
2.0 VICTORIA
George Bougias National Head of Research g.bougias@oliverhume.com.au
2.1
MARKET DRIVERS Economy Victoria remains Australia’s best performing economy. Recent challenges, such as the bushfires and the Coronavirus disease (COVID-19), will reduce activity although their exact impact on economic growth and other key indicators is uncertain. Victoria continues to perform well across a range of indicators. Victoria ranks first on economic growth, retail trade, equipment investment and construction work done. The following indicators for Victoria were above (or below) the decade average: DWELLING COMMENCEMENTS
UNEMPLOYMENT
POPULATION GROWTH
ECONOMIC GROWTH
14,304 5.2% Level this quarter
4.8% 14.2% Level this quarter
2.05% 1.2% Level this quarter
$437,258m 27.0%
Compared with decade average
Compared with decade average
Compared with decade average
Compared with decade average
Level this quarter
EQUIPMENT INVESTMENT
HOUSING FINANCE
RETAIL SPENDING
CONSTRUCTION WORK
$3,309m 10.2% Level this quarter
$4,029m 31.1% Level this quarter
$20,914m $13,803m 14.9% 26.2% Level this quarter
Level this quarter
Compared with decade average
Compared with decade average
Compared with decade average
Compared with decade average Source: https://www.commsec.com.au/stateofstates
Victoria’s labour market remains steady and unemployment remains low. On a trend basis, Victoria’s unemployment rate was 4.9% in December 2019, one of the lowest in Australia, and well below the national average (5.1%). In December 2019, Victoria had the highest trend increase in employment (up 8,500 people) followed by New South Wales (up 5,000 people) and Queensland (up 4,100 people). Over the last year, Victoria also had the largest increases in trend employment (up 98,000 people), followed by New South Wales (up 80,000 people) and Queensland (up 57,600 people). 12
QUARTERLY MARKET INSIGHTS
State Unemployment Rates
Trend
% 8 7 6 5 4 3 2
DECEMBER QUARTER 2019
2009 NSW
2014 VIC
2019 QLD
2009
2014 SA
2019
WA TAS Source: ABS, RBA.
Population Victoria’s population growth (2.1%) remains the fastest in Australia with the state’s population continuing to increase by more than any other jurisdiction (132,800).
The state’s population was estimated at around 6.6 million people as at 30 June 2019.
December Quarter 2019 Key Figures Preliminary Data
Population at end Jun Qtr 2019 (‘000)
Change over previous year (‘000)
Change over previous year (%)
New South Wales
8,089.5
109.4
1.4
Victoria
6,594.8
132.8
2.1
Queensland
5,095.1
85.7
1.7
South Australia
1,751.7
15.2
0.9
Western Australia
2,621.7
27.5
1.1
Tasmania
534.3
6.0
1.1
Northern Territory
245.9
–1.2
–0.5
Australian Capital Territory
426.7
6.3
1.5
25,364.3
381.6
1.5
Australia
(a) Includes Other Territories comprising Jervis Bay Territory, Christmas Island, the Cocos (Keeling) Islands and Norfolk Island. Source: ABS, Oliver Hume Research.
Population Growth - Selected States and Australia (%) 4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
NSW
VIC
QLD
SA
WA
Australia
Mar-2019
Mar-2018
Mar-2017
Mar-2016
Mar-2015
Mar-2014
Mar-2012
Mar-2013
Mar-2011
Mar-2010
Mar-2009
Mar-2007
Mar-2008
Mar-2006
Mar-2005
Mar-2004
Mar-2003
Mar-2002
Mar-2001
Mar-1999
Mar-2000
Mar-1997
Mar-1998
Mar-1996
Sep-1994
Mar-1995
Mar-1993
Mar-1991
Mar-1992
Mar-1990
Mar-1989
Mar-1988
Mar-1987
Mar-1986
0%
Source: ABS. Oliver Hume Research. Estimated Resident Population.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
13
2.0 VICTORIA
2.2
LAND MARKET Prices
Prices moderate but overall market conditions remain steady...
Prices softened over the December quarter with conventional lot (gross) prices falling from $320,000 to $316,000 (down 1.3% over the quarter and down 5.2% over the year). The moderation in prices was, in part, driven by seasonal factors in the December quarter. Overall market conditions remain steady as evidenced by sales enquiries and volumes.
Although land incentives and rebates remain common, we expect a gradual withdrawal over the next 12-18 months as market conditions continue to improve.
On average we estimate incentives/rebates remain around $15,000 to $30,000 per lot. However, higher incentives are on offer in some estates.
A range of factors will support prices over the short to medium term including low interest rates and more flexible lending conditions, lower interest rates and strengthening underlying demand driven by continued robust population growth.
Growth Area Median Land Price (Sold) $400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
14
Casey Melton Geelong
Whittlesea Wyndham Metro Melbourne
QUARTERLY MARKET INSIGHTS
QIII. ‘19
QIV. ‘19
QI. ‘19
QII. ‘19
QIII. '18
QIV. '18
QI. '18
QII. '18
QIII. '17
QIV. '17
QI. '17
QII. '17
QIII. '16
QIV. '16
QI. '16
QII. '16
QIII. '15
QIV. '15
QI. '15
QII. '15
QIII. '14
QIV. '14
QI. '14
QII. '14
QIII. '13
QIV. '13
QI. '13
QII. '13
QIII. '12
QIV. '12
QI. '12
QII. '12
QIII. '11
QIV. '11
QI. '11
QII. '11
QIII. '10
QIV. '10
QI. '10
QII. '10
QIII. ‘09 Cardinia Hume Mitchell
QIV. ‘09
$0
Source: Oliver Hume Sold Lots, Annual moving average. 2 Source: CoreLogic. Median (all of VIC)
DECEMBER QUARTER 2019
Metro. Melbourne Growth Area Municipalities Median Land Price $350,000 $330,000 $310,000 $290,000 $270,000 $250,000 $230,000 $210,000 $190,000 $175,000
QIII. ‘19
QIV. ‘19
QI. ‘19
QII. ‘19
QIII. ‘18
QIV. ‘18
QI. ‘18
QII. ‘18
QIII. ‘17
QIV. ‘17
QI. ‘17
QII. ‘17
QIII. ‘16
Median Land Price
QIV. ‘16
QI. ‘16
QII. ‘16
QIII. ‘15
QIV. ‘15
QI. ‘15
QII. ‘15
QIII. ‘14
QIV. ‘14
QI. ‘14
QII. ‘14
QIII. ‘13
QIV. ‘13
QI. ‘13
QII. ‘13
QIII. ‘12
QIV. ‘12
QI. ‘12
QII. ‘12
QIII. ‘11
QIV. ‘11
QI. ‘11
QII. ‘11
QIII. ‘10
QIV. ‘10
QI. ‘10
QII. ‘10
QIII. ‘09
QIV. ‘09
$150,000
Source: Oliver Hume Research. Sold Lots.
In the metropolitan Melbourne market lot prices declined in the quarter across all municipalities except for Wyndham where prices rose.
Metropolitan Melbourne Median Lot Prices QIV, ‘18
QI, ‘19
QII, ‘19
QIII, ‘19
QIV, ‘19
QoQ
$ Value Change (QoQ)
YoY
$ Value Change (YoY)
Mitchell
$268,250
$270,000
$272,500
$285,000
$261,000
-8.4%
-$24,000
-2.7%
-$7,250
Cardinia (S)
$370,000
$349,500
$335,000
$340,000
$336,250
-1.1%
-$3,750
-9.1%
-$33,750
Casey (S)
$377,000
$355,000
$330,000
$338,000
$335,000
-0.9%
-$3,000
-11.1%
-$42,000
Hume (N)
$339,000
$326,000
$327,000
$323,000
$310,000
-4.0%
-$13,000
-8.6%
-$29,000
Melton (W)
$300,000
$295,000
$281,000
$287,950
$283,800
-1.4%
-$4,150
-5.4%
-$16,200
Whittlesea (N)
$320,000
$306,500
$300,000
$318,000
$310,000
-2.5%
-$8,000
-3.1%
-$10,000
Wyndham (W)
$330,500
$325,000
$306,250
$314,150
$326,750
4.0%
$12,600
-1.1%
-$3,750
Geelong (W)
$279,950
$275,000
$279,250
$277,250
$270,950
-2.3%
-$6,300
-3.2%
-$9,000
Surf Coast (W)
$444,500
$392,500
$430,000
$425,000
$355,500
-16.4%
-$69,500
-20.0%
-$89,000
Metro Melbourne (All 7 Growth Areas) Conventional
$333,250
$325,000
$312,000
$320,000
$316,000
-1.3%
-$4,000
-5.2%
-$17,250
Metro Melbourne (All 7 Growth Areas) All Lots
$333,950
$325,000
$313,000
$321,000
$320,000
-0.3%
-$1,000
-4.2%
-$13,950
Median (All of Vic)
$322,000
$310,000
$304,500
$314,000
$309,000
-1.6%
-$5,000
-4.0%
-$13,000
Municipality
Source: Oliver Hume Research.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
15
2.0 VICTORIA
2.2
LAND MARKET (CONT.)
Land sales continue to strengthen, buoyed by a range of factors...
Sales Volumes Land sales continue to strengthen buoyed by a range of factors including low interest rates, improving confidence, robust population growth and a rebound in housing finance. Land sales across metropolitan Melbourne averaged over 800 per month for most of the second half of 2019 which was over 50% higher than in the first half of 2019.
The Federal Government’s First Home Loan Deposit Scheme, which commenced 1 January 2020, has supported sales volumes. The continued rebound in the land market is consistent with trends observed in the established market where sales volumes continue to increase reflecting stronger buyer demand.
Monthly Melbourne Growth Area Project Land Sales (2005 - 2019) 2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
Monthly Project Land Sales (LHS) Moving Quarterly Average
16
QUARTERLY MARKET INSIGHTS
4 Qtr. Moving Ave.
DECEMBER QUARTER 2019
Dec-19
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
-
Source: Oliver Hume Sold Lots. Selected estates.
Time on Market
... “The median time on market for new land remains stable having averaged just over 60 days over the last year.”
The median time on market for new land remains stable having averaged just over 60 days over the last year. The time on market indicator is a key measure of the strength of the market and measures the period from when a new residential lot is released for sale until it is contracted by a purchaser. Except for a period in early 2015, the average time on market fell (or remained stable) every quarter for five years until early 2018 when market conditions changed and lots began to take longer to sell. The stability in selling times for new residential land coincides with the continued improvement in selling times (or days on market) across Australia for both capital cities and regional markets reflecting the improvement in demand.
New Residential Land - Median Time on Market (Days) Metropolitan Melbourne Growth Area Municipalities 198
200
192 183
189
180
171
165 156
160
147 140
120
114
114
102 102 100
87 80
81
75 75 63 60 57
60
60 61 62 61 51
48 40
33
30 21 21
20
24
21
QIII. ‘19
QIV. ‘19
QII. ‘19
QI. ‘19
QIV. ‘18
QII. ‘18
QIII. ‘18
QI. ‘18
QIV. ‘17
QII. ‘17
QIII. ‘17
QI. ‘17
QIV. ‘16
QIII. ‘16
QI. ‘16
QII. ‘16
QIV. ‘15
QIII. ‘15
QI. ‘15
QII. ‘15
QIV. ‘14
QIII. ‘14
QI. ‘14
QII. ‘14
QIV. ‘13
QIII. ‘13
QII. ‘13
QI. ‘13
QIV. ‘12
QIII. ‘12
QII. ‘12
0
Source: Oliver Hume. 3 Source: CoreLogic.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
17
VICTORIA
DECEMBER QUARTER 2019 MEDIAN LOT PRICES BY SUBURB (GROSS)
WALLAN $230,000 n/a
400 SQM AND 488 SQM LOTS
KALKALLO $310,000 $333,000
MICKLEHAM $298,000 $315,000
CRAIGIEBURN $355,000 $382,000
ROXBURGH PARK $357,000 $384,000
GREENVALE $389,000 n/a MELTON SOUTH $260,000 $290,000
PLUMPTON $346,000 $409,000
FRASER RISE $337,000 $378,500
WYNDHAM VALE $286,450 $317,500
WEIR VIEWS $253,250 $295,000
TARNEIT $341,500 $351,000
MAMBOURIN $288,500 $313,500
LOVELY BANKS n/a $273,500
WERRIBEE $302,500 $320,000
MELBOURNE TRUGANINA $333,500 $382,900
POINT COOK $463,500 n/a
LARA $249,900 $266,900
GEELONG CHARLEMONT $270,000 n/a
MT DUNEED $251,900 $271,900 ARMSTRONG CREEK $283,750 $289,000
18
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
ST LEONARDS n/a n/a
BEVERIDGE $270,000 $277,500
WOLLERT $375,450 $379,900
BERWICK $428,000 $465,000 OFFICER $349,000 $367,000
CLYDE $332,500 $357,500
CRANBOURNE EAST $330,500 $348,000
CRANBOURNE $360,000 $380,000
CLYDE NORTH $320,000 $365,000
BOTANIC RIDGE n/a $335,000
400 sqm Median Price 448 sqm Median Price Source: Oliver Hume Research. Sold.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
19
2.0 VICTORIA
2.3
APARTMENTS AND TOWNHOUSES Market Trends The Melbourne unit sector (including apartments and townhouses) continues to rebound supported by the broader improvement in the property market. The rebound in price growth, especially for houses, is once again improving the unit sector’s relative affordability vis-à -vis detached houses.
The Real Estate Institute of Victoria (REIV) reports that metropolitan Melbourne unit and apartment median prices rose 3.8% over the December quarter (up 2.1% over the year) to reach $639,000. Median house prices rose by 3.7% (down 1.2% over the year) to reach $859,500.
Metropolitan Melbourne Median Prices
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
2010
20
2011
2012
2013
2015
2016
2017
2018
2019
2020
Source: REIV. Seasonally Adjusted.
Metro House
Metro Unit
Regional House
Regional Unit
QUARTERLY MARKET INSIGHTS
2014
DECEMBER QUARTER 2019
Unit and apartment price growth was higher than house prices for inner, middle and outer Melbourne over the year. Median and unit apartment price growth was strongest in middle Melbourne where median prices increased by 3.8% over the year to reach $707,500 in the December quarter 2019 (up from $682,500 in the previous quarter). Going forward, the Federal Government’s First Home Deposit Scheme may also further support medium and high-density dwelling demand especially in capital cities where the level of the price cap under the scheme excludes much of the traditional detached housing stock. While demand conditions in the apartment market are relatively more subdued townhouses and medium density product continues to increase in popularity.
Demand for these types of products have been driven by a range of structural, long-term, cyclical and other factors including: •
Developers increasingly responding to buyers’ preferences for low maintenance ‘executive style’ living options including with land
•
A clear affordability / pricing advantage especially vis-à-vis detached housing
•
Demographic and social change including especially ageing and the ongoing retirement of babyboomers. It is now almost a decade since the first group of baby boomers reached the age of 65
•
Restrictive finance (now being reversed) which saw demand for properties at relatively lower price points increase disproportionally more.
December Quarter 2019 Median Prices Dec-19 Quarter
Sep-19 Quarter
Quarterly Change
Annual Change
House
$859,500
$829,000
3.7%
-1.2%
Unit and Apartment
$639,000
$615,500
3.8%
2.1%
House
$422,500
$413,500
2.2%
2.8%
Unit and Apartment
$307,500
$298,000
3.2%
1.7%
$1,489,500
$1,425,500
4.5%
-5.3%
$636,000
$606,000
5.0%
2.1%
$1,023,500
$986,500
3.8%
-3.0%
Unit and Apartment
$707,500
$682,500
3.7%
3.8%
House
$676,500
$661,000
2.3%
-3.7%
Unit and Apartment
$543,500
$520,500
4.4%
-1.0%
Metropolitan Melbourne
Regional Victoria
Inner Melbourne House Unit and Apartment Middle Melbourne House
Outer Melbourne
Source: REIV, Oliver Hume Research. Seasonally adjusted.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
21
2.0 VICTORIA
2.3
APARTMENTS AND TOWNHOUSES (CONT.) Private Dwelling Investment
Supply
Chain Volume, Quarterly
Private dwelling investment continues to decline as part of the broader downswing in residential construction now underway. Most recently, in the September quarter, dwelling investment contracted for both detached housing and higher-density housing.
$b
9
Looking ahead, the decline in dwelling investment is forecast to continue but is expected to stabilise over the medium-term with the improvement in the broader market feeding into building activity.
6
3
0 2003
2007
2011
Alterations & Additions
2015
Detached
2019
Higher-Density Source: ABS
Annual Building Approvals By Type - Victoria 45,000
40,000
Total Number of dwelling units (No.)
35,000
30,000
25,000
20,000
15,000
10,000
5,000
Houses
22
Flats units or apartments
QUARTERLY MARKET INSIGHTS
Semi-detached, row or terrace houses, townhouses
DECEMBER QUARTER 2019
Dec-2019
Dec-2018
Dec-2017
Dec-2016
Dec-2015
Dec-2014
Dec-2013
Dec-2012
Dec-2011
Dec-2010
Dec-2009
Dec-2008
Dec-2007
Dec-2006
Dec-2005
Dec-2004
Dec-2003
Dec-2002
Dec-2001
Dec-2000
Dec-1999
0
Source: ABS. Oliver Hume Research.
METROPOLITAN MELBOURNE
2019 IN REVIEW MOST COMMONLY SOLD LOT
376-400sqm 2nd: 426-450sqm
MEDIAN SIZE
MEDIAN PRICE
400sqm
$320,000
2018: 400sqm
2018: $322,900
VALUE RATE
$819 per sqm 2018: $812 per sqm
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
23
7 2.0 VICTORIA
Peter Vassallo
CLYDE NORTH
Managing Director - Development Sites p.vassallo@oliverhume.com.au
4
4.4
CONNECTIVITY AND INFRASTRUCTURE 2.4
DEVELOPMENT Ballarat SITES
Melbo Airp
5
1
M8
10
Development site activity in metropolitan Melbourne continues to improve buoyed by the ongoing improvement in the greenfield market and broader residential market.
M8
12 9
While funding costs remain an issue, interest rates are gradually decreasing especially by the competitiveness of non-banks vis-Ă -vis traditional banks. M8
Higher sales rates are a key driver of the rebound as well as the increasing appetite of lenders to fund projects.
2
M
Valuers are also reporting more bank valuation requests especially for projects, including projects with several stages. M1
The gap between buyers and sellers’ expectations is narrowing with greater certainty about future market conditions seeing an increasing number of players transacting or looking to transact. Although transaction levels remain well-below the levels observed during the boom, they are expected to gradually increase. This is especially the case as key metrics (such as price per net developable hectare (NDHA) and retail lot prices) have essentially remained stable in recent quarters.
M1
Geelong
24
QUARTERLY MARKET INSIGHTS
11
DECEMBER QUARTER 2019
PROPERTY MARKET REPORT - CLYDE NORTH
M1
8
13
Suburbs 6
ourne port
M1
Development Site Indicative Value (per NDHA)
1
Melton West
$750,000
2
Tarneit
$1,500,000
3
Clyde North
$1,500,000
4
Sunbury
$1,000,000
5
Plumpton
$1,600,000
6
Greenvale
$1,750,000
7
Gisborne
$900,000
8
Donnybrook
$1,100,000
9
Deanside
$1,600,000
10
Bonnie Brook
$1,400,000
11
Armstrong Creek
12
Aintree
$1,200,000
13
Wollert
$1,400,000
Melbourne
M1
M1
$900,000
M1 *Based on 2-5 year terms. These are indicative only as values can vary widely depending on factors such as PSP status, development sequencing and servicing etc.
M1
3
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
25 25
3.0 QUEENSLAND
3.0 QUEENSLAND
Amanda Bittenbinder Queensland Research Manager a.bittenbinder@oliverhume.com.au
3.1
MARKET DRIVERS Economy The latest CommSec State of the State report ranks Queensland in fifth position on economic performance rankings but second on relative population growth and third on relative economic growth. The following indicators were above (or below) the decade average:
DWELLING COMMENCEMENTS
UNEMPLOYMENT
POPULATION GROWTH
ECONOMIC GROWTH
7,698 24.2% Level this quarter
6.0% 2.2% Level this quarter
1.71% 2.3% Level this quarter
$404,486m 21.2%
Compared with decade average
Compared with decade average
Compared with decade average
Compared with decade average
Level this quarter
EQUIPMENT INVESTMENT
HOUSING FINANCE
RETAIL SPENDING
$2,825m 3.0% Level this quarter
$2,397m 14.6% Level this quarter
$16,051m $9,695m 9.0% 26.0% Level this quarter
Level this quarter
Compared with decade average
Compared with decade average
Compared with decade average
Compared with decade average
Source: https://www.commsec.com.au/stateofstates
28
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
CONSTRUCTION WORK
Queensland’s estimated residential population (ERP) was around 5.1 million as at 30 June 2019 with the representing over 20% of Australia’s population.
Queensland continues to attract the largest number of interstate migrants, welcoming 22,800 new residents over the 12 months to June 2019. Only Queensland, Victoria and Tasmania recorded positive net interstate migration over this period.
Queensland’s population grew by around 85,700 people over the year to 30 June 2019. This growth remains the second fastest (1.7%) after Victoria (2.1%) and faster than the Australian Capital Territory (1.5%) and New South Wales (1.4%).
The jurisdictions with the largest net interstate migration losses were New South Wales (22,100 people), Western Australia (6,500), the Northern Territory (4,400 people) and South Australia (4,000 people)
Population
Queensland Population Change - Growth Components 120,000
100,000
80,000
60,000
40,000
20,000
Total Population Growth Net Overseas Migration
Jun-19
Jun-18
Dec-18
Jun-17
Dec-17
Jun-16
Dec-16
Jun-15
Natural Increase Net Interstate Migration
Dec-15
Jun-14
Dec-14
Jun-13
Dec-13
Jun-12
Dec-12
Jun-11
Dec-11
Jun-10
Dec-10
Jun-09
Dec-09
Jun-08
Dec-08
Jun-07
Dec-07
Jun-06
Dec-06
Jun-05
Dec-05
Jun-04
Dec-04
Jun-03
Dec-03
Jun-02
Dec-02
Jun-01
Dec-01
Jun-00
Dec-00
-
Source: Oliver Hume Research.
Net Interstate Migration (Quarterly) 8,000 6,000 4,000 2,000 -2,000 -4,000 -6,000
NSW
VIC
Jun-2019
Mar-2019
Sep-2018
Mar-2018
Sep-2017
Mar-2017
Sep-2016
Mar-2016
Sep-2015
Mar-2015
Sep-2014
Mar-2014
Sep-2013
Mar-2013
Sep-2012
Mar-2012
Sep-2011
Mar-2011
Sep-2010
Mar-2010
Sep-2009
Mar-2009
Sep-2008
Mar-2008
-8,000
Source: Oliver Hume Research.
QLD
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
29
3.0 QUEENSLAND
3.2
LAND MARKET Land Market South East Queensland (SEQ) ended 2019 on a relatively high note after a turbulent start to the year.
when compared with various historical benchmarks. Developer incentives, rebounding population growth, low interest rates and government buyer incentives continue to underpin the relatively positive market conditions.
Although the December sales volumes moderated from the previous quarter, in part due to the especially strong September quarter result and the end of the year timing, the December quarter result was high
South East Queensland Project Land Sales 2,500
2,000
1,500
1,384
SEQ Long Run Average: 1,370
1,000
500
SEQ Total Sales
Dec-19
Sep-19
Jun-19
Mar-19
Dec-18
Sep-18
Jun-18
Dec-17
Mar-18
Sep-17
Jun-17
Mar-17
Dec-16
Sep-16
Jun-16
Mar-16
Dec-15
Sep-15
Jun-15
Mar-15
Dec-14
Jun-14
Sep-14
Mar-14
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
0
Source: Oliver Hume Sold Lots, Annual moving average.
SEQ Long Run Average
December Quarter Sales 2,500
2,000
1,500
1,384 Dec. Qtr. Long Run Average: 1,235
1,000
500
Total Sales
30
Dec-19
Dec-18
Dec-17
Source: Oliver Hume Sold Lots, Annual moving average.
Dec. Qtr. Long Run Average
QUARTERLY MARKET INSIGHTS
Dec-16
Dec-15
Dec-14
Dec-13
Dec-12
0
DECEMBER QUARTER 2019
Market Share Logan remains the market share leader for the second quarter in a row, accounting for 23% of total sales across SEQ, while Ipswich recorded the second highest (22%).
4% 16% 17%
The Moreton Bay region took a large share of the market over the quarter which was supplemented by the release of several new stages across multiple projects. Conversely, the Gold Coast market share declined over the year as land supply continues to decrease without any major land releases to boost availability.
23%
SEQ Project Land Sales Market Share QIV.’19
18%
Brisbane Gold Coast Ipswich Logan Moreton Bay Redland
22%
Change In Market Share (Quarterly Land Sales) Brisbane
Gold Coast
Ipswich
Logan
Moreton Bay
Redland Bay
Dec-18
16%
20%
27%
24%
12%
1%
Dec-19
16%
18%
22%
23%
17%
4% Source: Oliver Hume Research.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
31
3.0 QUEENSLAND
3.2
LAND MARKET (CONT.) Median Price Median prices remained relatively stable over the quarter across all municipalities with Ipswich recording the highest growth with 1% over the quarter (7% on an annual basis). The Gold Coast median price dropped both annually and quarterly, due to decreasing land size and the
lower number of sales recorded in the ‘premium stock’ category. The SEQ median price increased on a quarterly and annual basis, in part, due to an increased number of sales in regions outside of Ipswich and Logan (traditionally where more affordable lots sold).
New Residential Land - Median Prices - South East Queensland Municipalities $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 Brisbane QIV.’18
QI.’19
QII. ’19
Gold Coast QIII. ’19
Ipswich
Logan
Moreton Bay
Redland
QIV. ’19
SEQ
Source: Oliver Hume Research.
Median Lot Prices by Local Government Area LGA
QIV. '18
QIII. '19
QIV.'19
5yr Change
QoQ
YoY
Brisbane (C)
$385,625
$387,000
$387,375
-8.1%
0%
0%
Gold Coast (C)
$339,188
$323,350
$317,850
31.4%
-2%
-6%
Ipswich (C)
$208,113
$220,338
$221,775
19.5%
1%
7%
Logan (C)
$216,688
$221,000
$221,313
22.4%
0%
2%
Moreton Bay (R)
$253,250
$249,500
$250,188
15.5%
0%
-1%
Redland (C)
$303,125
$319,000
$305,000
7.4%
-4%
1%
SEQ
$242,125
$246,000
$258,000
16.2%
5%
7% Source: Oliver Hume Research.
32
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
... many buyers [are] seeing the value in greater land size.
Median Lot Size While affordability remained a key driver behind land sales, lot availability also played a major role over the quarter. There was an increase in lots available over 400 sqm over the three months to December, driving up sales numbers and with many buyers seeing the value in greater land size. A large portion of the lots sold sit just over 400 sqm (most commonly the 420 sqm block).
SEQ Project Land Sales (0 - 1,000 sqm) Market Share by Product Type 100%
10%
9%
17%
15%
31%
32%
36%
34%
6%
10%
7%
90% 80%
11%
10%
10%
11%
13%
15%
14%
36%
32%
70%
34% 60%
34%
50% 40% 30% 20%
43%
38%
34%
5%
5%
6%
6%
QII. ‘19
QIII. ‘19
QIV. ‘19
Long-run Average
37%
10% 0%
QIV. ‘18 Less than 300sqm
QI. ‘19 301-400sqm
401-500sqm
501-600sqm
601-1,000sqm
Source: Oliver Hume Research.
Median Lot Sizes by Local Government Area (sqm) LGA
QIII. '18
QIII. '19
QIV.'19
5yr Change
QoQ
YoY
Brisbane (C)
403
400
409
-20.7%
2.2%
1.6%
Gold Coast (C)
456
459
451
-4.8%
-1.6%
-1.5%
Ipswich (C)
432
431
425
-4.5%
-1.2%
-2.8%
Logan (C)
407
421
423
-10.5%
0.5%
2.9%
Moreton Bay (R)
407
393
393
-8.6%
0.2%
-1.9%
Redland (C)
400
422
383
-23.2%
-9.1%
-2.2%
SEQ
419
420
422
-9.7%
0.5%
-0.3% Source: Oliver Hume Research.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
33
3.0 QUEENSLAND
3.2
LAND MARKET (CONT.) Value Rates The value rate ($ per sqm) across SEQ continues to increase with December 2019 recording a rate of $611 per sqm, an increase of 4.4% over the quarter and 6.9% annually. Redland recorded the highest increase in value rate over the quarter increasing 5.2% to record $796 per sqm. This was due to some estates releasing premium lots which in turn increased the value rate. Brisbane retains the highest price per sqm despite growth softening over the quarter (-2.1%).
South East Queensland Project Land Sales (QIV. ‘19) | Median Value Rate (SQM) $611
SOUTH EAST QUEENSLAND
$796
REDLAND
$636
MORETON BAY
LOGAN
$523
IPSWICH
$522 $704
GOLD COAST
$947
BRISBANE $0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
Source: Oliver Hume Research.
Median Value Rates by Local Government Area ($/sqm)
LGA
QIII. '18
QII. '19
QIII.'19
5yr Change
$ Value Change QoQ (5yr Change)
$ Value Change (QoQ)
YoY
$ Value Change (YoY)
Brisbane (C)
$910
$970
$967
19.5%
$157
0%
-$3
6%
$57
Gold Coast (C)
$732
$709
$705
40.6%
$204
-1%
-$4
-4%
-$27
Ipswich (C)
$482
$507
$512
31.7%
$123
1%
$4
6%
$29
Logan (C)
$528
$523
$526
43.2%
$159
1%
$3
0%
-$2
Moreton Bay (R)
$620
$629
$636
27.9%
$139
1%
$7
2%
$15
Redland (C)
$757
$741
$757
74.9%
$324
2%
$16
0%
-$1
SEQ
$573
$575
$586
25.1%
$118
2%
$11
2%
$13
Source: Oliver Hume Research.
34
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
Time on Market
There was an 18% decrease in the amount of new lots released to the market ...
The median time on market increased over the quarter. Over the December quarter there was an 18% decrease in the amount of new lots released to the market, leaving behind a relatively greater supply of residual stock from previous releases. Residual stock can be difficult to sell, or take slightly longer to move as affordable and ideal shaped lots are picked up first, leaving behind more expensive, oddly shaped or lots that require additional building requirements.
New Residential Land - Median Time on Market (Days) - South East Queensland Municipalities, QIV. ‘19 250
200
150
100
50
QIV.’19
QIII.’19
QII.’19
QI. ‘19
QIV. ‘18
QIII. ‘18
QII. ‘18
QI. ‘18
QIV. ‘17
QIII. ‘17
QII. ‘17
QI. ‘17
QIV. ‘16
QII. ‘16
QIII. ‘16
QI. ‘16
QIV. ‘15
QIII. ‘15
QII. ‘15
QI. ‘15
QIV. ‘14
QIII. ‘14
QII. ‘14
QI. ‘14
QIII. ‘13
QIV. ‘13
QII. ‘13
QI. ‘13
QIV. ‘12
QIII. ‘12
0
Source: Oliver Hume Research.
New Residential Land - Median Time on Market (Days) - South East Queensland Municipalities, QIV. ‘19 140
120
116 100
80
92
60
91
91
LOGAN
MORETON BAY
61
40
31
20
0 BRISBANE
GOLD COAST
IPSWICH
REDLAND Source: Oliver Hume Research.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
35
SOUTH EAST QUEENSLAND
2019: IN REVIEW MOST COMMONLY SOLD LOT
376-400sqm 2nd: 401-425sqm
MEDIAN SIZE
MEDIAN PRICE
424sqm
$252,750
2018: 420sqm
2018: $245,000
VALUE RATE
$596 per sqm 2018: $583 per sqm
36
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
The Surrounds - Oliver Hume project at Helensvale, Queensland QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
37
3.0 QUEENSLAND
3.3
APARTMENTS AND TOWNHOUSES Brisbane
Gold Coast
After the increase in new apartment supply in Brisbane over the last few years, Brisbane’s apartment market has faced challenging conditions. More recently, the apartment market has shown signs of a tentative recovery.
The level of Gold Coast apartment market stock continues to decline as current supply is absorbed and new stock levels remains low. The low cost of borrowing is making it easier for the already fewer lower cost units to be purchased quickly by buyers.
The Brisbane apartment market has seen a shift in buyer priorities with buyers moving away from investor stock (usually smaller apartments) to more owner-occupier focused stock (usually larger apartments) which have a wide range of communal facilities and surrounding amenities. Buyers are still looking for affordable stock near the CBD and inner ring and are focusing on projects which are both nearing completion and selling off residual units at discounted prices.
Demand conditions remain favourable. In particular, although unemployment has risen slightly for the Gold Coast the level of unemployment remains relatively low. Continued jobs and population growth, combined with continued government spending is expected to support demand over the short to medium term.
In early 2020, there has been renewed interest in to the larger transport orientated development projects such as the $750 million Albion Exchange which had its first stage approved in early 2020. The Brisbane townhouse market has yet to fully feel the effects of the new planning laws introduced to ban all townhouse activity in low density areas. However, it is likely to see a healthy level of demand and price growth going forward as current supply is absorbed and minimal new stock enters restricted areas.
Brisbane Inner City Bedroom Breakdown ($/sqm) GOLD COAST LGA NORTHSHORE INNER WEST INNER SOUTH INNER NORTH INNER EAST BRISBANE CBD $ 1 Bed
38
2 Bed
$2,000
$4,000
3 Bed
QUARTERLY MARKET INSIGHTS
$6,000
$8,000
$10,000 Source: Oliver Hume Research.
DECEMBER QUARTER 2019
NORTHSHORE
INNER NORTH
INNER WEST BRISBANE CBD
INNER EAST
INNER SOUTH
BRISBANE INNER CITY BEDROOM BREAKDOWN ($/SQM) BRISBANE CBD 1 Bed 2 Bed 3 Bed
GOLD COAST LGA
$7,566 $8,350 $9,394
INNER SOUTH 1 Bed 2 Bed 3 Bed
GOLD COAST
1 Bed 2 Bed 3 Bed
INNER WEST
$5,955 $6,138 $8,250
2 Bed 3 Bed
INNER NORTH
$6,389 $6,437 $6,846
1 Bed 2 Bed 3 Bed
$6,289 $6,533 $6,338
1 Bed
INNER EAST
$6,266 $6,839 $6,300
$8,976 $7,356 $9,864
1 Bed 2 Bed 3 Bed
NORTH SHORE 1 Bed 2 Bed 3 Bed
$6,045 $6,075 $6,687
Source: ABS, Oliver Hume Research.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
39
4.0 FEATURE ARTICLE
4.0 FEATURE ARTICLE
REGIONAL VICTORIA: AN EMERGING PROPERTY HOTSPOT George Bougias National Head of Research g.bougias@oliverhume.com.au
... Regional Victoria offers higher rental yields and often, good capital growth.
42
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
Regional Victoria is rapidly emerging from Melbourne’s shadow to become a popular destination for home buyers and property investors. In addition to lower price points and affordability, regional Victoria offers higher rental yields and, often, good capital growth. Some of these markets, especially those markets where the drivers of demand are diverse and growing, have already seen the benefit of increased attention with short and long term capital growth. Demand drivers for these markets include affordabiliy, large and growing opportunities in employment, infrastructure, lifestyle and dwelling shortages. Affordability
Acoording to the Victorian Government, rental price growth in regional Victoria is running at over 5% a year while metropolitan rental rates are growing at less than 1%. Regional Victoria’s vacancy rate (1.6%) is below of the metropolitan Melbourne (2.2%).
Rental Vacancy Rate 4%
3%
2%
In terms of affordability, regional Victorian prices remain considerably below that of metropolitan Melbourne. REIV data shows that as at the December quarter 2019, metropolitan Melbourne’s median house (unit) price was $860,000 ($639,000) while for regional Victoria it was $423,000 ($308,000).
1%
0% Sep-14
Sep-15
Sep-16
Sep-17
Metropolitan Melbourne
This execptional value also makes these markets increasingly attractive to first home buyers. For example, the municipalities of Greater Geelong (median house price of $570,000), Ballarat ($405,000) and Greater Bendigo ($383,500) are all priced well below the Melbourne average and represent a great entry point for first time buyers.
Sep-18
Sep-19
Regional Victoria
Source: Department of Health and Human Services (Victorian Government), Oliver Hume Research.
Employment and Economy In recent years regional Victoria’s economy has been buoyed by the boom in the broader Victorian economy.
Dwelling Shortages Dwelling shortages in key regional Victorian markets, as evidenced by rising rents and decreasing vacancy, is also a precursor to a brighter future for these markets.
Metropolitan and Regional Rent Index Annual Percentage Change
Victoria remains the best-performing jurisdiction in the nation with growth driven by a range of factors including strong population growth (with both overseas and interstate migration near record highs), infrastructure spending, construction work and a robust employment market. The renaissance in regional Victoria has coincided with a range of emerging opportunities opening for a wide range of occupations. Professional services, building and construction, health and social services. jobs are all in high demand in major regional centres.
8%
6%
Infrastructure 4%
Like Melbourne, regional Victoria is undergoing an infrastructure boom that is reshaping the way the regions are connected to each other and to Melbourne.
2%
0% Sep-14
Sep-15
Sep-16
Metropolitan Rent Index (MRI) Long Term Average MRI
Sep-17
Sep-18
Sep-19
Regional Rental Index (RRI) Long Term Average RRI
The $2.6 billion Delivering for Regional and Rural Victoria Program, announced as part of the Victorian Budget 2019-20, is one of the most recent initiatives announced for regional Victoria.
Source: Department of Health and Human Services (Victorian Government), Oliver Hume Research.
QUARTERLY MARKET INSIGHTS
DECEMBER QUARTER 2019
43
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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.