RPM Quarterly Report - Q1 2019

M A R C H

2 0 1 9

MARKET REVIEW

Q U A R T E R

RESIDENTIAL

RPM REAL ESTATE GROUP IS VICTORIA’S MOST SUCCESSFUL

WE ADVISE OUR CLIENTS ON ALL ASPECTS OF THE SALES

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AND RISK MITIGATION THROUGH TO PRODUCT MIX, PRICING,

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INSIDE

FROM OUR CEO

DEVELOPMENT SITES

COMMUNITIES

14

18 FEATURE STORY:

Industry leaders insights

10

44

APARTMENTS / TOWNHOUSES

52

INTERNATIONAL

56

RESIDENTIAL INVESTMENT

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

Q1 MARKET OVERVIEW

LEAD INDICATORS

4 6

3

FROM OUR CEO

WELCOME TO OUR FIRST EDITION OF RPM REAL

The median land price remained steady at $325,000.

FOR 2019. IN THIS ISSUE WE DELVE INTO THE

continue to feature throughout many estates to drive

Q1 MARKET OVERVIEW

ESTATE GROUP’S RESIDENTIAL MARKET REVIEW NUMBERS AND ANALYSE THE KEY DRIVERS AND

IMPACTS ACROSS MELBOURNE AND GEELONG’S NEW HOUSING MARKET.

Over the March quarter, restrictive lending

conditions and negative sentiment among buyers

KEVIN BROWN

CHIEF EXECUTIVE OFFICER RPM REAL ESTATE GROUP

figure. Although we have already seen prices ease by

up to 5% through incentives and rebates, we believe a further 5% reduction is likely, totalling approximately 10% off the current median land price of $325,000.

In the development site market, there is still strong

quarter and 60% to 1,946 lots compared to the

assets albeit with price adjustment factored in given

March quarter declined 18.6% from the previous same period a year ago.

a widespread view that lot prices are overvalued –

demand among developers for quality, de-risked

moderating retail values. They are also negotiating

longer deal terms with a view to launching projects in the next cycle.

particularly given falling values in the established

Macro prudential measures and impositions on

reluctant to significantly reduce prices which

in the apartment and townhouse market, which

housing market – however developers are

would jeopardise sales over the past year that are approaching settlement.

R P M R E A L E S TAT E G R O U P

sales rates, which are not reflected in the headline

continued to impact sales rates. Lot sales for the

The land market remains in a state of flux: there is

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However, value add incentives including rebates

investors continue to underscore slowing demand is impacting the speed of pre-sales, resulting in projects being delayed or shelved.

Over the March quarter other dwelling approvals

(apartments and townhouses) declined 11.8% from compared to the same quarter 12 months ago.

Overall, subdued market conditions are likely to

remain for the rest of the year. However, there are

green shoots emerging, signalling the worst of the

downturn may be over following a moderation in the pace of decline in established housing values.

Lending conditions are also showing signs of

easing, with discussions taking place between the RBA and APRA regarding an interest rate cut and lowering the loan assessment rate which would improve borrowing capacity.

The Federal Coalition’s election victory should

increase market confidence, stability and certainty, which could bring an earlier end to the bottom of the cycle.

MICHAEL STAEDLER

RESEARCH MANAGER

m.staedler@rpmrealestate.com.au

Q1 MARKET OVERVIEW

the previous quarter to 5,246 approvals and 41%

POPULATION GROWTH COMBINED WITH MODERATING SALES IN BOTH THE NEW HOUSING AND ESTABLISHED MARKETS ALONG WITH ACUTE VACANCY RATES POINT TO A GROWING LEVEL OF UNDERLYING DEMAND, WHICH COULD PROPEL AN UPSWING. THE INDUSTRY NEEDS TO ENSURE THERE IS APPROPRIATE SUPPLY IN THE PIPELINE TO AVOID HEIGHTENED AFFORDABILITY CONCERNS THAT HAVE CHARACTERISED THE RESIDENTIAL PROPERTY MARKET IN RECENT YEARS.

+61 434 619 280

The data contained within this report was prepared

by RPM’s research team consisting of economists, property experts and GIS analysts.

Research underpins the core strategic decision

making capability at RPM, providing in-depth analysis on current economic and housing conditions,

sales rates and pricing, future supply and demand assessments, and buyer demographics. This rich intelligence enables clients to make informed

decisions that underscore the success of their

developments. RPM’s research is also highly valued in assisting clients to secure capital funding and

enhance their ongoing marketing and ROI strategies.

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

5

ECONOMIC ACTIVITY GROSS DOMESTIC PRODUCT (GDP)

2.81% 2.61% 12 month change to Dec qtr. 2018

5 year average

CONSUMER PRICE INDEX (CPI) Q 1L E M AA DR KI N ET D I OC VA ET RO VR ISE W

1.33% 1.90% Mar-19

Source: ABS

Same month year earlier

VIC POPULATION

STATE FINAL DEMAND (SFD) - VIC

4.97% 4.03% 12 month change to Dec qtr. 2018

5 year average

RETAIL TURNOVER - VIC

4.06% 4.89% Mar-19

Same month year earlier

NATURAL INCREASE

10,087 Sep-18

8,924

Same qtr. year earlier

CASH RATE

1.50% Mar-19

1.50% Dec-18

1.50% Mar-18

Source: RBA 6

R P M R E A L E S TAT E G R O U P

VARIABLE RATE

OVERSEAS MIGRATION

24,339 Sep-18

24,565 Same qtr. year earlier

5.37% Mar-19

5.34% Dec-18

5.22% Mar-18

4.68% 4.05% Mar-19

Mar-19

4.65% 4.07% Dec-18

4.51% Mar-18

Dec-18

4.13% Mar-18

5.9%

84,827

12 months to Sep-18

% change - same qtr. last year

0.9%

% change - 12 months earlier

7.1%

2,599

3 YEAR FIXED RATE

13.0%

% change - 12 months earlier

Sep-18

DISCOUNTED RATE

12 months to Sep-18

% change - same qtr. last year

NET INTERSTATE MIGRATION

BORROWING RATES

40,863

2,930

Same qtr. year earlier

13,985

12 months to Sep-18

% change - same qtr. last year

11.3%

% change - 12 months earlier

22.2%

NATIONAL TOTAL CHANGE

VIC TOTAL CHANGE

395,101

change from Sep-17 to Sep-18

1.60%

% change - same qtr. last year VIC share

139,675 2.20%

35%

■ Negative change ■ Positive change

TOTAL POPULATION

AUS 25,101,917

VIC 6,497,700

VIC EMPLOYMENT EMPLOYMENT GROWTH (JOBS CREATED) Jobs (‘000s) TOTAL Dec-18 to Mar-19

FULL TIME Dec-18 to Mar-19 Last 12 months PART TIME Dec-18 to Mar-19 Last 12 months

31.53 124.80 -13.67 -2.12

0.5% 25.1% 3.8% 40.3% 1.4% 28.2% 5.7% 43.1% 1.2% 33.6% 0.2% 14.2%

$1,625 $1,607 $1,581 May-18

1.1% Source: ABS

4.6% 4.2% 5.2% Mar-19

Source: ABS

Dec-18

Same time last year

CONSUMER SENTIMENT

98.8 Mar-19

103.0 Mar-18

Source: Westpac-Melb institute

BUSINESS SENTIMENT

4.9 Mar-19

14.5

Source: RBA/NAB

Mar-18

The Westpac-Melbourne Institute Consumer Sentiment

WAGES

Nov-18

UNEMPLOYMENT RATE

Q 1L M E AA D R KI E N TD IOC VA ET ROVR I SE W

Last 12 months

17.86 122.68

% Change

Vic contribution to AUS

Nov-17

Index is the most widely quoted barometer of consumer sentiment in Australia. A score of greater than 100 means that optimists outnumber pessimists, with readings of below 100 indicating that pessimistic consumers are in the majority.

NAB’s Business Survey has been tracking Australian

2.8%

business confidence levels for more than two decades.

Businesses are approached quarterly, with two smaller

monthly surveys conducted in the intervening months to capture changes on a more regular basis. The panel now exceeds 2,700 businesses.

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

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VIC FINANCE NO. OF FHBS FINANCED

7,199

8,172

Mar-19

Same qtr. year earlier

NO. OF NON-FHBS FINANCED

17,367 20,618 Q 1L E M AA DR KI N ET D I OC VA ET RO VR ISE W

Mar-19

Same qtr. year earlier

FINANCE FOR NEW DWELLINGS

6,269 7,327 Mar-19

Same qtr. year earlier

VALUE OF LOANS - OWNER OCCUPIERS

$9.99B $12.13B Mar-19

Same qtr. year earlier

12% 16% 14% 18%

AVERAGE LOAN SIZE (FHBS)

$356,073 $347,864 Mar-19

Same qtr. year earlier

AVERAGE LOAN SIZE (NON-FHBS)

$427,469 $450,463 Mar-19

Same qtr. year earlier

FINANCE FOR ESTABLISHED DWELLINGS

18,297 Mar-19

21,463

Same qtr. year earlier

VALUE OF LOANS - INVESTORS

$3.52B Mar-19

$4.89B

Same qtr. year earlier

2% SHARE OF FHB LOANS

5% 15% 28%

29.3% 28.4% Mar-19

Same qtr. year earlier

Source: ABS

MELBOURNE PROPERTY MEDIAN HOUSE PRICE

MEDIAN UNIT PRICE

MEDIAN LAND PRICE

AUCTIONS HELD

Mar-19

Mar-19

Mar-19

Mar-19

$793,000

$804,500 Previous qtr.

$845,000

Same qtr. year earlier Source: REIV 8

R P M R E A L E S TAT E G R O U P

$586,500 1.4% 6.2%

$589,500 Previous qtr.

$601,000

Same qtr. year earlier

$325,000

0.5% 2.4%

$325,000 Previous qtr.

$322,000

Same qtr. year earlier

3,318 0% 0.9%

CLEARANCE

3,118 Dec-18

5,089

Same month year earlier

56% 45% 67%

VIC BUILDING DETACHED HOUSE APPROVALS 8,409 Mar-19 9,666 Same qtr. year earlier 38,284 Last 12 months

OTHER DWELLING APPROVALS

13.0% 0.3%

HOUSE COMMENCEMENTS

3.5%

HOUSE COMPLETIONS 9,932 Dec-18 8,885 Same qtr. year earlier 38,986 Last 12 months

28.9%

OTHER COMMENCEMENTS

6.9%

11.4%

Mar-19

18,559 26.4%

Same qtr. year earlier

62,939 13.9%

Last 12 months

TOTAL COMMENCEMENTS

5,189 Dec-18 7,205 Same qtr. year earlier 33,313 Last 12 months

14,446

28.0% 11.1%

OTHER COMPLETIONS

11.8%

13,655

41.0%

Dec-18

17,144 15.7%

Same qtr. year earlier

Q 1L M E AA D R KI E N TD IOC VA ET ROVR I SE W

9,257 Dec-18 9,939 Same qtr. year earlier 37,884 Last 12 months

5,246 Mar-19 8,893 Same qtr. year earlier 24,655 Last 12 months

TOTAL DWELLING APPROVALS

71,197 6.9%

Last 12 months

TOTAL COMPLETIONS

6,407 Dec-18 7,708 Same qtr. year earlier 25,597 Last 12 months

16,339

16.9% 18.3%

Dec-18

16,593 1.5%

Same qtr. year earlier

64,583 2.6%

Last 12 months

Source: ABS

MELBOURNE PROPERTY VACANCY RATE - MELB

2.2% 2.1% Mar-19

Mar-18

AVERAGE DAYS ON MARKET - METRO MELB

41

Mar-19

33

Mar-18

MEDIAN METRO HOUSE RENT

$450 Mar-19

$450 Mar-18

0%

MEDIAN METRO OTHER DWELLING RENT

$430 Mar-19

$420 Mar-18

2.4%

Source: REIV Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

9

FEATURE STORY:

INDUSTRY LEADERS INSIGHTS THE FOCUS AMONG THE MAJOR BANKS TO

TIGHTEN MORTGAGE LENDING CRITERIA HAS Q1 MARKET OVERVIEW

CREATED A RISE IN NON-BANK LENDERS, WHICH

MARK POLATKESEN

DIRECTOR AND SENIOR MORTGAGE BROKER MORTGAGE DOMAYNE

RPM: Firstly, tell us a little about yourself and Mortgage Domayne.

IS GOOD NEWS FOR BUYERS, ACCORDING TO

MP: I’ve been in the property industry for more than

MORTGAGE BROKER AT MORTGAGE DOMAYNE.

of $800 million. I started Mortgage Domayne 6

MARK POLATKESEN (MP), DIRECTOR AND SENIOR

WE SAT DOWN WITH MARK TO FIND OUT MORE

ABOUT CHANGES IN THE LENDING LANDSCAPE AND WHAT IT MEANS FOR PROSPECTIVE BORROWERS.

15 years and made mortgage settlements in excess

Purchasing a house and land package can be

quite complex given the customer is dealing with 2 different contracts (ie: land and house) and

timeframes. So we hold the client’s hand throughout the entire process.

years ago. We specialise in construction finance in

RPM: How would you describe the current lending

Our buyer profile is mostly first home buyers seeking

MP: Before the Financial Services Royal Commission,

for construction. We work alongside the likes of RPM,

the inquiry resulted in sudden and sharp changes

greenfield areas in Victoria’s growth corridors.

to purchase a block of land then selecting a builder helping buyers to implement a strategy to obtain finance. We look after our client from the initial

point of sale all the way to when they move in. We

environment?

the big lenders had the lion’s share of loans. However, to lending policy, which has made accessing credit harder among the major banks.

tailor solutions based on the right lender at the right

They’ve put the brakes on policy exceptions due to

establishing borrowing capacity, structuring the right

focus on exploring other options for clients with

rate with the right product. We advise on areas like loan or developing a savings plan.

APRA and ASIC requirements. This has shifted our

second tier lenders. People are now definitely looking to brokers to find a solution because banks don’t really have the appetite at the moment.

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R P M R E A L E S TAT E G R O U P

Policies from non-bank lenders have always been

the major banks – therefore it seems a lot worse than

aggressive with interest rates. They have to have a

on the segment of the lending market that is tougher – what it is. The banks are scrutinising things like account

conduct from 6 months ago and in my opinion are being a little heavy handed.

RPM: What is buyer sentiment like?

MP: Clients are well aware of the Royal Commission and are feeling the pinch of credit because they’re so used to the traditional lending options from the banks.

From our perspective, we feel it’s the opposite and

we’ve never been busier. It’s about educating clients

on what’s available and workshopping loan scenarios.

There’s been an influx of other lenders through which we’re able to find solutions for our clients. In fact, in

2018 market share of non-major lenders has increased by 10% to 42%, with the major lenders sitting at 58%.

more flexible than the banks and they can be more

MAJOR LENDERS VS NON-MAJOR LENDERS MARKET SHARE

Q1 MARKET OVERVIEW

There’s a lot of negative press, which mostly focuses

Non-major lenders

point of difference. There’s real value in dealing with non-prime lenders in terms of interest rates and ongoing costs.

RPM: Can you explain the key changes to lending criteria?

MP: The main changes include a new system called

Comprehensive Credit Reporting which gives banks

much greater visibility into applicants’ credit history.

For example, banks will know if you had a credit card from 5 years ago that you forgot to disclose on the

58%

42%

application, if you pay your bills on time, or if you

ever go over your credit card limit. All this data is now much more visible to lenders and therefore they can profile clients more comprehensively.

Major lenders

In 2018 non-major lenders increased market share by 10% to 42%.

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

11

FEATURE STORY: INDUSTRY LEADERS INSIGHTS

Another measure is the introduction of HEMs – the

Now the expense rate has gone from 3% to 3.8%,

RPM: Can you also explain the changes to the

were a single applicant and earning $40,000 or

$40,000 and $60,000. We have to educate clients on

Royal Commission, and what effect it may have?

Q1 MARKET OVERVIEW

Household Expenditure Method. In the past, if you $200,000, the linear expense calculation was the same. Now, if you’re earning more, you’re likely

spending more to live which is being taken into consideration.

whether they really need a high limit credit card.

RPM: Is this the new normal for prospective borrowers?

As a secondary measure, a lot of lenders now review

MP: If I compared this to the GFC in terms of sudden

lenders now want to see 30 to 90 days of a client’s

things changed. Banks went from lending 95% to 90%

living expenses assessed by bank statements. Most bank statements, which is about vetting them to

ensure the linear expenses they are declaring line up with bank statements on what they’re spending day to day.

Certain banks have also lifted the expense of a credit card repayment. So if you had a credit card with a

$10,000 limit, in the past banks used to expense it at about 2.5% to 3% of that limit as a repayment every month. That’s irrespective of whether you used the card or not.

12

it reduces what a client can borrow by between

R P M R E A L E S TAT E G R O U P

changes in policy, they definitely got tougher and overnight.

In terms of the current situation, some of the changes will stay but not all will be permanent. Buyers will need to be induced back into the market and banks will want market share back at some point.

mortgage broking industry as a key outcome of the

MP: A lot of the findings were targeted at the broker channel. But if you look at both sides of parliament, the Liberal party wants to keep upfront and trailing

commissions in place. Labor originally said it would implement all 76 recommendations before the

findings were delivered. Now they’ve softened their stance and said the broker channel is important as

it will keep competition alive but they will abolish the

trailing commission and make a standardised upfront commission of 1.1% on loan amounts.

I don’t feel it will change too much. We (as in brokers) have got way too much market share and there’s a much greater benefit to have us around than not.

The interest margin before the growth of the broker

channel versus now was a lot higher so people were paying a lot more for a home loan. The channel also allows non-major banks a distribution facility that they otherwise wouldn’t have access to.

RPM: Any final comments you’d like to make?

As an indication, our business is in line for a record

MP: One of the biggest impacts of the Royal

loan amounts have gone up 5% in the last financial

look at affordability in the context of what lenders are

prepared to lend, which is why we are going to lenders

for certain policy requirements as opposed to lenders who will be heavy handed.

Many lenders have increased their Loan Assessment

Rates to 7.25% or even 8%. That’s because they want to ensure applicants can afford a fluctuation in the interest rate.

HAVING SAID THAT, THERE ARE MANY MISCONCEPTIONS ABOUT HOW HARD THE LENDING LANDSCAPE IS. SECURING FINANCE IS NOT AS HARD AS MANY PEOPLE THINK.

Q1 MARKET OVERVIEW

Commission was the level of borrowing capacity. I

month for new lending applications. Our average year and the volume of lending applications has increased by 20%.

We are inundated with new loan enquiries. So

absolutely there are a huge number of people

out there wanting to buy and there are definitely alternative options if you engage with a broker.

For example, 3 years ago, for a loan with a 4% interest rate, the Assessment Rate was only 1.5% higher at 5.5%. Now, with an interest rate of 3.8%, the

MARK POLATKESEN

Assessment Rate is 7.25%.

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

13

OVERVIEW

AGAINST A BACKDROP OF A CONTINUING CORRECTION IN THE RETAIL MARKET,

DEVELOPMENT SITES

GREENFIELD DEVELOPMENT SITE VALUES

ARE ALSO ADJUSTING TO THE REALITY OF A SUBDUED SELLING ENVIRONMENT.

There is an understanding that for the market to

operate efficiently long term, and given falling prices

in the established market, there is a risk that lot prices are over-valued and need to moderate further to drive

sales velocity. This is a key component for developers when assessing development opportunities.

That said, there is still strong demand for well-

located, well-priced sites. Many developers are seeking to negotiate longer deal terms when

acquiring sites to allow for longer timeframes

required for sales in the changed retail environment, with a view to launching their projects in 1.5 to 2 years’ time.

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R P M R E A L E S TAT E G R O U P

CHRISTIAN RANIERI

DIRECTOR, TRANSACTIONS & ADVISORY christian@rpmrealestate.com.au +61 416 445 078

The recent $22.5 million sale of a 30 hectare

This is a key difference from previous downturns and

The 1,790 sqm site in Brunswick is permit-approved

to retail amenity and infrastructure, reflects the

returns from the land boom – not only have access

Rothelowman architects. Aimed at both investors and

landholding in Wallan in Melbourne’s north, close

adjusted price. The sale reflected a rate of $750,000 per hectare which is seen as real value in a market

where rates per hectare have previously exceeded $2,500,000 in some corridors.

In addition, 2 large-scale PSP-approved development sites in Strathtulloh in Melbourne’s west and Wollert in the north, with a combined potential yield of more than 1,300 lots, presents de-risked, price-adjusted opportunities with 3 to 4 year terms, enabling

purchasers to build their pipelines for the next medium term cycle.

There is still significant capital available from a

swathe of private lenders who have taken market

share from the banks. Not only do many offer more creative, tailored, end-to-end solutions, they are

entrepreneurial in nature and understand the market.

to more capital options when funding development sites, but have shifted from developing to lending.

In the infill market, quality assets that are priced

appropriately and ‘make sense’ continue to draw the attention of developers and transact well. There is a strong view in the market that Melbourne is heading for an under-supply of apartments resulting from a

combination of factors including macro-prudential

changes, uncertain planning outcomes and stalled/ shelved projects due to the prolonged downturn in retail apartment sales.

RPM recently launched 2 development sites in

Brunswick and Kew, both priced in accordance with

new market conditions at both a retail and wholesale level, which are attracting strong interest from local and offshore investors.

for a 7-storey residential development designed by

DEVELOPMENT SITES

demand for strategic sites with growth potential at an

hence many developers – having achieved significant

owner occupiers, it represents a quality, de-risked asset within 7kms of the CBD.

OUTSIDE OF BIG PROJECTS, THERE’S AN INCREASING MIX OF OWNER OCCUPIER AND INVESTOR PRODUCT IN EACH DEVELOPMENT. DESIGNING THE RIGHT PRODUCT BY INTIMATELY UNDERSTANDING THE TARGET BUYER PROFILE IS CRUCIAL TO THE SUCCESS OF A DEVELOPMENT IN CURRENT MARKET CONDITIONS. Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

15

OUTLOOK

Developers remain confident in the medium to long QD1E V M EA LROK PE M T EONVT E S R IVTI EE SW

term outlook given the economic fundamentals –

population and employment growth and low interest rates – are sound.

They understand the Victorian land market was

undervalued over a long period which underscored the significant price increases and quantums involved, but which are unlikely to return to the same levels while impositions on investors remain.

While the market remains subdued, there will likely be further adjustments to create more favourable

conditions; lot values may reset further and macro prudential measures that impacted investors are starting to ease.

Many developers will buy against the trend, seeing

opportunities others don’t in preparation for the next

upswing following the exceptional returns achieved over

the last few years and are in a position to buy and hold to capitalise on the market when it stabilises.

16

R P M R E A L E S TAT E G R O U P

HIGH QUALITY INFILL ASSETS CLOSE TO CBD AN ATTRACTIVE PROPOSITION THE LAUNCH OF A WELL-POSITIONED INFILL

The site is planning permit-approved for a 7-storey

MARKET UNDERSCORES A CONFIDENCE AMONG

and 5 shops on the ground floor and is designed

DEVELOPERS TO BRING DE-RISKED PROJECTS TO

MARKET, ACCORDING TO HEAD OF TRANSACTIONS & ADVISORY, CHRISTIAN RANIERI.

residential development incorporating 61 apartments

by Rothelowman architects. The approved permit exceeds the height set out in the Brunswick Structure Plan.

RPM recently closed a tender for a 1,790 sqm

Currently trading as Northside Harley Davidson, the

one of the largest remaining properties along the

to Sydney Road plus rear laneway access. The

development site on Sydney Road, Brunswick, coveted locale.

The 1,790 sqm site in Brunswick is permit-approved for a 7-storey residential development designed by Rothelowman architects.

rare development opportunity features 37m frontage property is currently returning $270,000 +GST and,

QD1E V M EA LROK PE M T EONVT E S R IVTI EE SW

DEVELOPMENT SITE PRICED IN LINE WITH TODAY’S

DEVELOPERS ARE TAILORING THEIR PRODUCT TO A NEW BREED OF BUYER – OWNER OCCUPIERS WHO ARE INTERESTED IN MORE THAN JUST A DWELLING, BUT RATHER THE ETHOS OF THE DEVELOPMENT AND HOW IT SERVES THEM AND THE BROADER COMMUNITY.

with a high quality internal fitout including retail and

office space, is suited to a wide range of uses in the short term.

CHRISTIAN RANIERI

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

17

OVERVIEW

THE CORRECTION ACROSS GREATER

MELBOURNE AND GEELONG’S LAND MARKET

CONTINUED TO BE DRIVEN BY TIGHTER ACCESS

COMMUNITIES

TO FINANCE AND WEAKER BUYER SENTIMENT FUELED BY NEGATIVE MEDIA COVERAGE AROUND FALLING HOUSE VALUES.

In March quarter 2019, across all growth corridors gross lot sales declined by 60% to 1,946 lots

compared to the same period a year ago, and 18.6% from the previous quarter.

While RPM data indicates enquiry numbers through website visits and project marketing material are

still strong across new housing estates – indicating potential underlying demand – purchasers are delaying their decision to buy, which is likely

attributed to reduced borrowing capacity and

awaiting the outcome of the Federal Election which has allowed more time to save.

18

R P M R E A L E S TAT E G R O U P

LUKE KELLY

DIRECTOR, COMMUNITIES luke@rpmrealestate.com.au +61 400 688 520

Comparing price movements, Greater Melbourne’s

There is much commentary about the cancellation

Michael’s analysis shows that for the March quarter,

from the previous quarter and 6.2% (-$52,000) from

However, an analysis by Michael Mammen, Partner at

within 2 weeks, with a further 9.3% within 2-4 weeks.

median house price contracted by 1.4% (-$11,500)

March quarter. The median lot price of $325,000 across Greater Melbourne’s growth corridors

remained unchanged from the previous quarter and

increased by just under 1% (+$3,000) from the same quarter a year earlier.

Historically the land price has sat below the established housing market at a ratio of 35%. This has increased

to 41% in the March quarter 2019 which suggests land prices are overvalued and need to adjust accordingly.

Developers continue to offer value-add incentives such as rebates or low deposit terms to stimulate

sales. However, these inducements are proving to be

ineffective in a competitive market, with many estates

reducing price – in some cases considerably on already titled lots – to achieve reasonable sales rates.

law firm HWL Ebsworth reveals a default rate of only

4.6% based on 1,000 land settlements reviewed across all growth corridors during the March quarter.

The industry broadly applies the term cancellation based on re-advertising of lots month to month.

However, stock returning to market may not all be

cancellations, or a default. Lots are re-advertised for

86% of lots were settled on the due date itself or

In terms of supply, there were 53 more active estates

in March quarter 2019, compared to the same quarter in 2018. However, new releases fell 58% to 2,031 lots compared to the same quarter 12 months ago as

developers slow releases to avoid higher unsold lots on the market.

many reasons including developers taking stock off

The median lot size remained unchanged at 400sqm

allocating lots to referrers or builders which can also

new masterplans being designed with an average

the market then putting lots back on at a later date, be returned to market, purchasers deciding not to proceed after paying a holding deposit, or, given

lending restrictions, signing contracts that are ‘subject to finance’ and then being unable to secure a loan.

Cancellation rates can also appear distorted and not a true indication of the current market as it includes

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

the same quarter in 2018, falling to $793,000 in the

rate in the land market, with reports as high as 27%.

for the fifth consecutive quarter. We are seeing

of 350sqm with a higher percentage of medium

density and smaller conventional lots under 300sqm, which will skew the average land size down to about 350sqm. These lots, however, are taking time to be released to the market while larger existing stock slowly moves through.

sales from 12-15 months ago when volumes were

much higher which are now coming up to settlement.

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

19

OVERVIEW

MELBOURNE GROWTH CORRIDORS

180

7,000

5,000

120 100

4,000

80

3,000

60 40

MAR 16

Active Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

325K>

1,000

350,000

425

300,000

420

MEDIAN LOT PRICE �$�

415 410

200,000

405

150,000

400

100,000

395

50,000 0

390

MAR 16

Median Lot Size

JUN 16

SEP 16

Median Lot Price

R P M R E A L E S TAT E G R O U P

301K 325K

Gross Lot Sales

New Estates

250,000

20

% OF TOTAL GROSS LOT SALES

2,000

20 0

GROSS LOT SALES

6,000

140

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

275K 300K

MEDIAN LOT SIZE �SQM�

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

NUMBER OF ESTATES

160

251K 275K

<250K

385 0%

10%

Mar Qtr 2019

20%

Mar Qtr 2018

30%

Mar Qtr 2017

40%

50%

Source: RPM

Mar Quarter ‘19 Median Lot Price $ Change from Mar Quarter ‘18

% Change from Mar Quarter ‘18 CASEY

CARDINIA

HUME MITCHELL

CASEY CARDINIA

15% 4%

HUME MITCHELL

14% 3%

15% 2%

13% 2%

WHITTLESEA 8%

WHITTLESEA 9%

MELTON MELTON

20%

WYNDHAM 21% MOORABOOL 2%

GREATER GEELONG

15% MAR QUARTER 2019

MAR QUARTER 2018

GREATER GEELONG

$313,500

$310,000

$356,000

$275,000

3.5%

-4.6%

0.3%

14.2%

$10,500

-$15,000

$1,000

$34,100

400.0

395.0

404.0

448.0

% Change from Mar Quarter ‘18

0.0%

-1.2%

1.0%

-1.1%

Change from Mar Quarter ‘18

Mar Quarter ‘19 Gross Lot Sales Change from Mar Quarter ‘18

0.0

776

-1,341

-5.0 497

-613

4.0

377

-471

-5.0 296

-553

% Change from Mar Quarter ‘18

-63.3%

-55.2%

-55.5%

-65.1%

Mar Quarter ‘19 sales contribution

39.9%

43.0%

25.5%

22.5%

19.4%

15.2%

80

45

39

29

Mar Quarter ‘18 sales contribution Mar Quarter ‘19 Active Estates Mar Quarter ‘19 Lot Releases

Change from Mar Quarter ‘18

% Change from Mar Quarter ‘18 Mar Quarter ‘19 No. of Trading Days

17%

SOUTH EAST

Mar Quarter ‘19 Median Lot Size

Change from Mar Quarter ‘18

WYNDHAM 18% MOORABOOL 2%

GREATER GEELONG

20%

NORTHERN

Change from Mar Quarter ‘18

% Change from Mar Quarter ‘18

31

977

-1,091

14

370

-838

17.2% 7

388

-506

17.2% 2

296

-358

-52.8%

-69.4%

-56.6%

-54.7%

118

140

175

131

501%

466%

99

115

130

292%

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

% CONTRIBUTION TO TOTAL GROSS LOT SALES

WESTERN

108

459%

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

21

WESTERN GROWTH CORRIDOR THE WESTERN GROWTH CORRIDOR RECORDED

776 GROSS LOT SALES IN MARCH QUARTER 2019,

ACCOUNTING FOR 40% OF TOTAL GROSS LOT SALES ACROSS ALL GROWTH CORRIDORS â&#x20AC;&#x201C; DOWN FROM 43% IN THE SAME QUARTER A YEAR AGO. THIS

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

CONTINUES TO BE THE HIGHEST SHARE AMONG

ALL 4 GROWTH CORRIDORS, WITH SALES ACTIVITY UNDERPINNED BY A GREATER NUMBER OF ACTIVE

MOORABOOL

ESTATES AND SUBSEQUENT HIGHER LOT SUPPLY. MELTON

While lot sales activity in the Western growth corridor continues to outperform other regions, annual gross

sales declined by 63%, equating to 1,341 fewer lot sales.

The contraction in new lot releases and gross lot sales has been more pronounced in Wyndham compared to Melton.

Lot supply and lot sales volumes in March quarter 2019 are comparable to respective volumes 6 years ago in

WYNDHAM

March quarter 2013 in Wyndham, and 3 years earlier in March quarter 2016 in Melton.

Both Wyndham and Moorabool were the only Greater

Melbourne growth areas to record a quarterly decline in PORT PHILLIP BAY

lot prices this quarter. This is on the back of Wyndham being the only growth area that saw median lot prices continually rise through 2018 and peak in December quarter, before edging down during early 2019.

22

R P M R E A L E S TAT E G R O U P

PETER GRANT

DIRECTOR, COMMUNITIES

peterg@rpmrealestate.com.au +61 411 494 499

WYNDHAM Wyndham recorded 348 lot sales in March quarter 2019,

Developers have slowed lot releases in response to the significant decrease in lot absorption. As a result, the

attributed to a 2.9% fall in the median lot size to

400sqm, hence per sqm lot prices still increased.

Moreover, Wyndham’s median lot price has also increased by 1.6% over the year to March 2019.

500

MAR 16

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

414 412

MEDIAN LOT PRICE �$�

410

250,000

408 406

200,000

404

150,000

402 400

100,000

398

50,000 0

Median Lot Size

0

Gross Lot Sales

300,000

total of 34 active estates.

correction within Greater Melbourne. This is partly

10

350,000

increasing by 8 over the 12 months to March 2019 to a

previous quarter, which was also the biggest quarterly

1,000

15

Active Estates

2018. This is despite the number of active estates

quarter 2019 was 1.5% below its peak value in the

1,500

20

0

reflected commensurate declines of 39% from the

Wyndham’s median lot price of $328,000 in March

25

5

371 new lot releases in Wyndham during the quarter previous quarter and 65% from the same quarter in

2,000

30

GROSS LOT SALES

terms across all Greater Melbourne growth areas.

NUMBER OF ESTATES

the largest contraction in both absolute and percentage

35

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

quarter and 66% from the same quarter a year ago was

2,500

40

However, this 35% decline in lot sales from the previous

MEDIAN LOT SIZE �SQM�

which was the second highest among all growth areas.

396 MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

394

Source: RPM

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

23

WESTERN GROWTH CORRIDOR

MELTON The number of active estates in Melton increased by 7 over March quarter 2019 to a total of 42 - the highest

Atkinson Precinct Structure Plans in late 2017/early 2018.

New lot releases, however, fell significantly during the second half of 2018, only beginning to turn around in March quarter 2019 to 570, which saw a 15%

NUMBER OF ESTATES

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

following the approval of the Plumpton, Kororoit and Mt

improvement in new lot supply from the previous quarter.

45

1,600

40

1,400

35

Gross sales of 389 lots in Melton during the March

quarter was the highest among all growth areas, despite

previous quarter and a solid 8.3% from the same quarter a year ago. While this increase is partly attributed to

the median lot size edging higher over both periods to 400sqm, per sqm lot prices have also risen.

24

R P M R E A L E S TAT E G R O U P

MEDIAN LOT PRICE �$�

reflecting an annual decline of 61%. With new supply

value for Melton increasing 3.2% to $306,500 from the

600

15

400

10

Active Estates

Nevertheless, lot prices are holding, with the median lot

800

20

0

the same quarter in 2018.

unsold lots is almost triple the number of quarterly sales.

1,000

25

200

5

This still reflected a sizeable 38% decrease compared to

thoroughly outpacing lot absorption, the volume of

1,200

30

MAR 16

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

0

Gross Lot Sales

400,000

460

350,000

450 440

300,000

430

250,000

420

200,000

410

150,000

400

100,000

390

50,000 0

Median Lot Size

MEDIAN LOT SIZE �SQM�

22. Most of these new estates came onto the market

GROSS LOT SALES

among all growth areas - lifting the annual gain to

380

MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

370

Source: RPM

ROD ANDERSON

DIRECTOR, COMMUNITIES rod@rpmrealestate.com.au +61 417 595 859

onto the market across 4 active estates. A total of 39 lots were sold.

Although Moorabool is the most affordable new

broader property market.

and the highest annual growth rate across Greater Melbourne’s growth areas.

Moorabool’s median lot size is also the equal largest at 448sqm.

120

5

100

4

80

3

60

2

Active Estates

40 20 MAR 16

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

0

Gross Lot Sales

530

250,000

510 200,000

MEDIAN LOT PRICE �$�

the corresponding value in the same quarter in 2018

140

6

0

The median lot price decreased marginally in March quarter 2019 to $224,000, which is still 10% above

160

1

housing market in Greater Melbourne, it is not

immune from weaker buyer sentiment impacting the

180

7

490 470

150,000

450 430

100,000

410 390

50,000

MEDIAN LOT SIZE �SQM�

March quarter 2019, with just 36 new lots coming

NUMBER OF ESTATES

new lot releases (57%) and gross lot sales (59%) in

200

8

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

Moorabool recorded considerable annual falls for

9

GROSS LOT SALES

MOORABOOL

370 0

Median Lot Size

MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

350

Source: RPM

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

25

NORTHERN GROWTH CORRIDOR

THE NORTHERN GROWTH CORRIDOR RECORDED

New lot supply in the Northern growth corridor

2019, WHICH WAS 55% BELOW SALES VOLUMES

numbers remain static in Hume, while the frequency

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

497 GROSS LOT SALES IN MARCH QUARTER

ACHIEVED IN THE CORRESPONDING QUARTER IN

2018. NEVERTHELESS, THE PROPORTION OF TOTAL LOT SALES INCREASED FROM 23% TO 26% GIVEN THE SMALLER OVERALL DECLINE COMPARED TO OTHER GROWTH CORRIDORS.

Hume and Whittlesea were the only Greater

and size of new lot releases across estates along

Craigieburn Road in Wollert and Donnybrook Road in Donnybrook diminish as these estates focus on delivery of sold lots. Consequently, the Northern

growth corridor had the fewest new releases totaling 370 lots in the March quarter.

Melbourne growth areas to record an increase in

The correction in median lot prices has also been

10 lots or 6% in Whittlesea. This growth, however,

In both Hume and Whittlesea, the median lot price in

gross lot sales, rising by 40 lots or 17% in Hume and came off a long term low in quarterly sales volumes in both growth areas in December quarter 2018. In

addition, while the uptick in sales activity is positive, it needs to be sustained for a recovery to emerge.

26

continues to struggle for momentum. Active estate

R P M R E A L E S TAT E G R O U P

more apparent compared to other growth corridors.

March quarter 2019 was 6.9% below corresponding

peak values in June quarter 2018 and March quarter 2018 respectively. Mitchellâ&#x20AC;&#x2122;s median lot price also

decreased by 4% from its peak value a year earlier.

LUKE KELLY

DIRECTOR, COMMUNITIES luke@rpmrealestate.com.au +61 400 688 520

HUME

25

353 lots from March quarter 2018.

Active estates in Hume increased by just 1 to a

total of 15 over the 12 months to March 2019. The

0

new supply, with 215 recorded lot releases in

Active Estates

compared to the same quarter in 2018. As a result,

areas within Greater Melbourne.

This has offset some of the downward pressure in lot prices from weaker purchaser sentiment. The

median lot price of $326,000 in March quarter 2019

remained unchanged from the previous quarter and increased by 1% annually. Moreover, the median lot size shrank by 6.5% annually, resulting in stronger per sqm lot price growth.

MEDIAN LOT PRICE �$�

the volume of unsold lots has remained steady in Hume, unlike recorded increases in other growth

600 10

400

5

relatively low number of active estates has impeded March quarter 2019 representing a 68% decrease

800

15

200

MAR 16

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

0

Gross Lot Sales

400,000

460

350,000

450 440

300,000

430

250,000

420

200,000

410

150,000

400

100,000

390

50,000 0

Median Lot Size

GROSS LOT SALES

growth areas, gross sales were still down by 56% or

1,000

20

NUMBER OF ESTATES

largest quarterly increase in sales activity among all

1,200

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

273 lot sales in March quarter 2019. While this was the

MEDIAN LOT SIZE �SQM�

Gross sales in Hume increased by 40 lots to a total of

380

MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

370

Source: RPM

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

27

NORTHERN GROWTH CORRIDOR

MITCHELL

8

with continued falling sales activity. Gross sales

declined for the fifth consecutive quarter to 54 lots or 16% in March quarter 2019 – less than half the

prices actually decreased. Furthermore, the median lot price in Mitchell remains 4% below its peak value in March quarter 2018.

2

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

0

Gross Lot Sales

550 530 510

250,000

490 470

200,000

450

150,000

430 410

100,000

390

50,000

Median Lot Size

R P M R E A L E S TAT E G R O U P

MAR 16

300,000

0

28

50

350,000

MEDIAN LOT PRICE �$�

median lot size to 448sqm, which meant per sqm lot

100

3

Active Estates

unsold lots has not diminished significantly to lead

prices was primarily attributed to 14% growth in the

4

0

lot releases in March quarter 2019, the volume of

to upward pressure on lot prices. The increase in lot

150

5

1

corresponding figure in the same quarter in 2018.

Subsequently, although there were virtually no new

6

GROSS LOT SALES

compared to the previous quarter, which contrasts

200

7

MEDIAN LOT SIZE �SQM�

largest rise in both absolute and percentage terms

NUMBER OF ESTATES

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

Mitchell’s median lot price increased by 10% to

$291,000 over March quarter 2019. This was the

250

9

370 MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

350

Source: RPM

PETER GRANT

DIRECTOR, COMMUNITIES

peterg@rpmrealestate.com.au +61 411 494 499

WHITTLESEA 25

In March quarter 2019, active estate numbers in

recorded lot releases in March quarter 2019 down by

Active Estates

per sqm lot price growth was greater given the

median lot size diminished by 7% to 373 sqm - the lowest of all growth areas.

MAR 16

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

420 410

250,000

400

200,000

390

150,000

380

100,000

370

50,000 0

Median Lot Size

0

Gross Lot Sales

300,000

MEDIAN LOT PRICE �$�

170, while the median lot price rose 2%. Additionally,

200

350,000

all growth areas. However, compared to December

there was a 6% increase in gross lot sales, totaling

300

100

lot price to $307,250 was the highest fall among

and lot price has emerged. In March quarter 2019,

400

10

0

From March quarter 2018 to March quarter 2019, lot

quarter 2018, a small turnaround in both sales activity

500

5

30% quarterly and 60% annually.

sales declined by 54%, while a 7% drop in the median

600

15

GROSS LOT SALES

not translated into growth for new supply, with 154

700

MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

MEDIAN LOT SIZE �SQM�

highest among all growth areas. However, this has

NUMBER OF ESTATES

and 9 from the same quarter in 2018 - the second

800 20

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

Whittlesea increased by 2 from the previous quarter

900

350

Source: RPM

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

29

SOUTH EAST GROWTH CORRIDOR

THE SOUTH EAST GROWTH CORRIDOR RECORDED 377 LOT SALES IN MARCH QUARTER 2019, Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

WHICH WAS 56% BELOW SALES VOLUMES IN THE PREVIOUS CORRESPONDING QUARTER.

NEVERTHELESS, THE PROPORTION OF TOTAL LOT SALES ACROSS THE 4 MAJOR GROWTH

CORRIDORS INCREASED FROM 17% TO 19% IN THE CURRENT QUARTER.

THE DIFFERENCE IN NEW LOT SUPPLY AND LOT ABSORPTION IN THE SOUTH EAST GROWTH CORRIDOR IS CLOSER TO EQUILIBRIUM COMPARED TO OTHER GROWTH CORRIDORS, UNDERPINNING RELATIVELY EXPENSIVE LOT PRICES.

Both Casey and Cardinia experienced a moderate

rise in active estate numbers over the last 12 months, albeit with differing impacts on new lot supply. In

March quarter 2019, Cardinia recorded a 42% annual increase in lot releases while Casey experienced a 68% decline. New supply remains low in Cardinia,

and with the collapse in Casey, both growth areas

recorded long term lows in quarterly sales volumes.

PORT PHILLIP BAY

30

R P M R E A L E S TAT E G R O U P

ROD ANDERSON

DIRECTOR, COMMUNITIES rod@rpmrealestate.com.au +61 417 595 859

IN MARCH QUARTER 2019 Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

42%

CARDINIA RECORDED A 42% ANNUAL INCREASE IN LOT RELEASES

68%

CASEY EXPERIENCED A 68% DECLINE CARDINIA

IN LOT RELEASES

CASEY

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

31

SOUTH EAST GROWTH CORRIDOR

35 30

However, declines of 42% or 255 new lot releases and

28% or 298 gross lot sales in March quarter 2019 from the previous quarter represent long term lows. This is despite

2019 remains the most expensive across all growth

400

10

0

Active Estates

400,000

200

Maintaining a relatively expensive median lot price in the

300,000

MAR 16

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

460 450

MEDIAN LOT PRICE �$�

440 430

250,000

420 410

200,000

400

150,000

390

100,000

380

50,000 0

Median Lot Size

32

R P M R E A L E S TAT E G R O U P

0

Gross Lot Sales

350,000

and a marginal 1% increase from the same quarter in 2018.

the median lot size of 400 sqm is one of the smallest.

600

15

corridors, despite no change from the previous quarter

face of weakening demand was particularly notable given

800

20

5

a 5 year high in active estate numbers of 30.

Casey’s median lot price of $360,000 in March quarter

1,000

25

GROSS LOT SALES

quarter 2019 are in line with most other growth areas.

NUMBER OF ESTATES

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

The substantial annual contraction in both new lot

releases (68%) and gross lot sales (61%) in Casey in March

1,200

MEDIAN LOT SIZE �SQM�

CASEY

370 MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

360

Source: RPM

LUKE KELLY

DIRECTOR, COMMUNITIES luke@rpmrealestate.com.au +61 400 688 520

and 75% for the quarter with 133 lot releases.

However, gross lot sales still decreased by 10% from

the same quarter in 2018, falling to a long term low of

sale has eased.

Significantly, this returned the median lot price to its

former peak a year earlier, despite the median lot size reducing by 10% from March quarter 2018.

300

10

250

8

200

6

150

4

100

2

50 MAR 16

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

0

Gross Lot Sales

400,000

550

350,000

MEDIAN LOT PRICE �$�

a 5.9% increase in the median lot price to $349,500.

350

12

Active Estates

The median lot size increased by 10% for the March quarter from the previous quarter, which supported

400

14

0

just 79 lot sales. With supply outpacing absorption,

upward price pressure from low availability of lots for

450

16

500

300,000 250,000

450

200,000 400

150,000 100,000

350

50,000 0

Median Lot Size

GROSS LOT SALES

underpinned a 42% annual increase in new lot supply

NUMBER OF ESTATES

doubled over the 12 months to March 2019. This has

500

18

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

The number of active estates in Cardinia almost

20

MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

MEDIAN LOT SIZE �SQM�

CARDINIA

300

Source: RPM

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

33

GREATER GEELONG GROWTH CORRIDOR

THE GREATER GEELONG GROWTH CORRIDOR

The Greater Geelong growth corridor also benefitted

MARCH QUARTER 2019, BELOW A SHARE OF

the area during the first half of 2018 which coincided

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

CONTRIBUTED 15% OF TOTAL LOT SALES IN 17% IN THE SAME QUARTER IN 2018. THIS WAS IN RESPONSE TO GROSS LOT SALES

FALLING BY 65% TO 296 LOTS, WHICH WAS THE HIGHEST CONTRACTION IN SALES ACTIVITY IN PERCENTAGE TERMS ACROSS THE 4 MAJOR

Melbourne growth areas. However, the 55% annual decline in new lot supply also contributed to the contraction in lot sales.

Affordability concerns continue to emerge in the

Notably, sales activity in March quarter 2018 was

2019, the median lot price contracted in the growth

First Home Owners Grant for new dwellings from

July 2017. The ‘pull forward’ effect of this demand is likely to have created a vacuum in current first home buyer demand.

GREATER GEELONG

PORT PHILLIP BAY

R P M R E A L E S TAT E G R O U P

with lot prices peaking across many Greater

GROWTH CORRIDORS.

likely still inflated from the doubling of the Regional

34

from a significant shift in new housing demand into

Greater Geelong growth corridor. In March quarter

areas of Armstrong Creek and Geelong compared to

the previous quarter and rose only marginally in Lara.

Overall, the Greater Geelong growth corridor median lot price remained static from the previous quarter.

PETER GRANT

DIRECTOR, COMMUNITIES

peterg@rpmrealestate.com.au +61 411 494 499

7

in 2018, down by 168 lots or 51%. This fall was

attributed to the larger 62% annual decline in new

quarterly correction in the median lot price of

100

MAR 16

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

460 450

250,000

440 430

200,000

420

150,000

410 400

100,000

390

50,000 0

Median Lot Size

0

Gross Lot Sales

300,000

MEDIAN LOT PRICE �$�

diminished by 2.2% from the previous quarter.

200

2

Active Estates

most affordable new housing market within the the smallest median lot size of 400sqm, which

3

0

3.2% to $265,000, making Armstrong Creek the Greater Geelong growth corridor. It also contains

300

4

1

releases to 120 lots.

Consequently, lower demand has led to a

400

5

GROSS LOT SALES

were considerably lower than the same quarter

NUMBER OF ESTATES

areas within Greater Geelong. However, sales rates

500

6

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

Sales of 160 lots in Armstrong Creek in March

quarter 2019 was the highest among all growth

600

8

MEDIAN LOT SIZE �SQM�

ARMSTRONG CREEK

380

MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

370

Source: RPM

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

35

GREATER GEELONG GROWTH CORRIDOR

quarter 2019 compared to the previous quarter.

However, both new lot releases and gross lot sales

deteriorated, falling by 25% to 71 lots and 34% to 52 lots respectively.

Geelong growth corridor, increasing by 7% from the

350

12

300

10

250

8

200

6

150

4

0

Active Estates

100 50

MAR 16

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

was underpinned by a 2.3% rise in the median lot

550 530

MEDIAN LOT PRICE �$�

300,000

510

250,000

490 470

200,000

450

150,000

430 410

100,000

390

50,000 0

Median Lot Size

36

R P M R E A L E S TAT E G R O U P

0

Gross Lot Sales

350,000

previous quarter to $287,475. Some of this growth size to 466sqm.

400

2

Still, Bellarine Peninsula’s median lot price achieved the highest quarterly growth within the Greater

450

14

GROSS LOT SALES

saw overall active estates increase by 1 in March

NUMBER OF ESTATES

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

Bellarine Peninsula added 2 new estates and

16

MEDIAN LOT SIZE �SQM�

BELLARINE PENINSULA

370 MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

350

Source: RPM

ROD ANDERSON

DIRECTOR, COMMUNITIES rod@rpmrealestate.com.au +61 417 595 859

9

however, with gross sales down by 13% annually to 42 lots in the current quarter.

previous quarter to $332,450, which suggests lot

80

5 4

60

3

40

2

20

1 0

Median lot price growth was still a sizeable 19% from the same quarter in 2018 but fell by 1% from the

100

6

MAR 16 Active Estates

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

0

Gross Lot Sales

prices may have reached their peak. Furthermore,

400,000

750

350,000

700

increasing by 16.1% to 671sqm, which is also

300,000

650

250,000

600

200,000

550

150,000

500

100,000

450

50,000

400

significantly bigger than the median lot size in other growth areas within the Greater Geelong growth corridor.

MEDIAN LOT PRICE �$�

this decline occurred despite the median lot size

0 MAR 16 Median Lot Size

GROSS LOT SALES

a total of 53 lots. This did not boost sales activity,

NUMBER OF ESTATES

an annual increase in March quarter 2019, lifting to

120

7

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

Active estates in Geelong decreased by 1 over the

year to March 2019. However, new supply recorded

140

8

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

MEDIAN LOT SIZE �SQM�

GEELONG

350

Source: RPM

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

37

GREATER GEELONG GROWTH CORRIDOR

annual decline of 44% and a quarterly fall of 23%.

However, new lot supply has recovered, with 52 lot

releases in March quarter 2019 - more than double

0

quarter in 2018.

Active Estates

quarter, which has now overtaken the corresponding

20

MAR 16

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

0

MAR 19

Gross Lot Sales

530 510

250,000

MEDIAN LOT PRICE �$�

The median lot size of 448 sqm remained unchanged.

40

300,000

$270,000 in March quarter 2019 from the previous value for Armstrong Creek.

60 2

1

the previous quarter - and 24% above the same

The median lot price in Lara edged higher to

80

3

490 470

200,000

450

150,000

430 410

100,000

390

50,000 0

Median Lot Size

38

R P M R E A L E S TAT E G R O U P

GROSS LOT SALES

of a calendar year since 2015. This represented an

100

4

NUMBER OF ESTATES

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

Lara recorded just 33 lot sales in March quarter 2019, the lowest number of gross sales for the first quarter

120

5

MEDIAN LOT SIZE �SQM�

LARA

370

MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

350

Source: RPM

LUKE KELLY

DIRECTOR, COMMUNITIES luke@rpmrealestate.com.au +61 400 688 520

5

price and size need to be viewed with caution given the small volume of sales.

120 100

3

80 2

60 40

1

20

Torquay’s median lot price of $431,500 was the most

0

expensive among Greater Geelong growth corridors, almost $100,000 annually.

Active Estates

JUN 16

New Estates

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

600

450,000

500

400,000 350,000

400

300,000

300

250,000 200,000

200

150,000 100,000

100

50,000 0

Median Lot Size

0

Gross Lot Sales

500,000

MEDIAN LOT PRICE �$�

escalating by 4.2% from the previous quarter and by

MAR 16

MAR 16

JUN 16 Median Lot Price

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

MEDIAN LOT SIZE �SQM�

quarterly and annual changes to both the median lot

NUMBER OF ESTATES

Torquay during the March quarter. Consequently,

140

4

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

Sales activity remained negligible at just 9 lots in

160

GROSS LOT SALES

TORQUAY

0

Source: RPM

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

39

OUTLOOK

The downturn in the vacant land market will likely

The key positive is the economic fundamentals

This demand – while good for developers in the

confidence improves, particularly among owner

growth, significant infrastructure spending and

and increase affordability concerns. This is why

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

remain for at least the next 12 months until buyer occupiers impacted by tighter lending criteria. Price

falls in the established housing market have also made this type of property increasingly attractive for first home buyers who comprise more than 50% of land market purchasers.

In response, developers are acting in a responsible manner with current releases by not significantly

reducing prices which would jeopardise sales from 12

or so months ago as they come through to settlement.

employment growth – are all well above long term averages, and interest rates are at record lows.

There is also the likelihood of an interest rate cut in

either June or July following anaemic growth in the

short term – will ultimately create another upturn the Planning Minister approved an additional 12

new suburbs in February totaling 50,000 dwellings required to help meet housing demand based on

100,000+ people migrating to Victoria each year.

inflation rate in the first quarter of 2019. There have also been discussions between the RBA and APRA

about lowering the mortgage assessment rate from 7.25% to 6.75%, which would assist buyers entering

the market while still providing a comfortable buffer for regulators.

NEW SUBURBS IN FEBRUARY

hence the land market remains in a state of flux.

The current strict assessment lending rate remains a

TOTALING

Although we have already seen prices ease by up to 5%

growth, along with falling sales in both the land

This, however, means the current land price remains overvalued compared to established house values,

through incentives and rebates, we believe prices will

ease over the next 6-12 months by a further 5%. While

this does not bring the price of land back to ‘fair value’, it will allow the market to somewhat recalibrate after

record growth in both sales and price in recent years.

40

that drive the property market – strong population

R P M R E A L E S TAT E G R O U P

stumbling block haltering buyer activity. Population market and established housing market and acute vacancy rates suggest there is a growing level of underlying demand.

50,000

DWELLINGS REQUIRED TO HELP MEET HOUSING

DEMAND BASED ON 100,000+ PEOPLE MIGRATING TO VICTORIA EACH YEAR.

Beveridge $280k

Mickleham $344k

$351k

Thornhill

South

$255k

Aintree

$320k

$318k

Strathtulloh

Frasers Rise

Tarneit $320k

Wyndham

Craigieburn $378k

Donnybrook $295k

Wollert $337k

$340k

Deanside $364k

$267k

$331k

WHAT DOES A 400SQM LOT COST?

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

$266k

Park

Melton

$397k

Brook

$250k

Weir Views

Greenvale

Bonnie

Kurunjang

Kalkallo

3 months to March 2019

Truganina $365k

Vale

$328k

Mambourin $289k

Point Cook Werribee

Lara

$467k

$309k

Berwick

$258k

$430k

Geelong Armstrong Creek

$252k

Cranbourne

$240k

Bellarine $230k

South

$355k

Clyde

Botanic Ridge

$370k

$345k

Officer $340k

Pakenham $310k

Officer South

$330k

41

Q 1 MCAORMK M ET U NOI V TE I ER SV I E W

COMMUNITIES BUYER SURVEY DATA

WHILE ACCESS TO MORTGAGE LENDING HAS

they are sitting tight and subsequently not entering

Not surprisingly, given tighter credit conditions

MONTHS, OUR QUARTERLY SURVEY RESULTS

upgraders who are unable to borrow as much as they

intended to spend under $250,000 on construction

TIGHTENED SIGNIFICANTLY OVER THE PAST 12 SUGGEST IT HAS IMPACTED NON-FIRST HOME

OWNERS MORE HEAVILY THAN FIRST HOME BUYERS. In March 2019, first home buyers comprised 73% of all

initially thought they could, and downsizers, who

have in mind a higher level of equity remaining after the sale and subsequent purchase.

owner occupiers - up from 57% in the corresponding

Given the higher share of first home buyers in the

non-first home buyers has fallen over these 2 periods.

age profile than the same quarter 12 months ago.

quarter a year earlier. Subsequently, the number of This highlights the tighter line banks are currently

taking with upgraders; restricting the level of exposure home owners are allowed to take.

market, the March quarter recorded a slightly younger These purchasers aged between 18 and 34 accounted for 66% of all buyers in the March quarter 2019

compared to 56% from the March quarter 2018.

Access to bridging loans has also been reduced,

Interestingly, there is not a large variation in household

current dwelling before providing finance for the

increasing household income of first home buyers – a

meaning lenders often require the sale of a

next purchase. It’s worth noting the state of the

established market and the unwillingness among

homeowners to accept current offers. As a result,

42

the greenfield market. This is the case for both

R P M R E A L E S TAT E G R O U P

income between the 2 periods which highlights the

result of this cohort buying later in life and at a more advanced stage of their career.

a slightly higher percentage of buyers (50%)

compared to 47% for the corresponding period a year earlier.

THIS LOWER CONSTRUCTION SPEND ALIGNS WITH BUYERS LOOKING AT BUILDING A SMALLER HOME, WITH 75% OF BUYERS INTENDING ON BUILDING UNDER 25SQS COMPARED TO 61% FROM THE SAME QUARTER LAST YEAR.

March Quarter 2018 Other

1% 9%

1st Home

57%

2nd Home

60>

1st Home

73%

2nd Home

60>

20%

1%

9% 25%

18-24

8%

18-24

14%

48%

$120k>

14%

$80-$100k

25%

$60-$80k

$40-$60k

<$40k

3%

14%

21-25sq

<15sq

20%

$60-$80k

30sq>

16-20sq

$80-$100k

24%

$150-$200k <$150k

26-30sq

19%

23%

11%

26% 36% 22% 3%

52%

$120k>

$101-$120k

2% 1% 9% 13% 28% 34% 12% 1%

$250-$300k $200-$250k

25-34

$40-$60k

<$40k

20% 24% 15% 2%

$150-$200k <$150k

2% 4% 13% 7% 25% 32% 18% 0%

30sq>

12%

$450k>

$400-$450k $350-$400k

$300-$350k $250-$300k $200-$250k

26-30sq 21-25sq

16-20sq <15sq

Q 1 MCAORMK M ET U NOI V T EI ER SV I E W

25-34

$300-$350k

Source: RPM

0% 4%

35-49

$450k>

SIZE OF HOME PLANNING TO BUILD

3rd Home

35-49

$400-$450k $350-$400k

BUDGET FOR NEW HOME CONSTRUCTION

2%

3%

50-59

$101-$120k

HOUSEHOLD INCOME

32%

Other

4th Home

7% 34%

50-59

COMBINED AGE

2%

3rd Home

4th Home

OWNER OCCUPIER TYPE

March Quarter 2019

14% 38% 35% 2%

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

43

OVERVIEW

THE COMBINATION OF THE FINANCIAL SERVICES ROYAL COMMISSION, APRA MEASURES TO

APARTMENTS &TOWNHOUSES

RAISE STAMP DUTY AND TAXES FOR OFFSHORE PURCHASERS, STRICTER CHINESE CAPITAL

CONTROLS, AND THE REMOVAL OF CONCESSIONS FOR LOCAL INVESTORS HAVE HALTERED BUYER

ACTIVITY, WITH SENTIMENT AT LONG TERM LOWS. This slowdown in demand has heavily impacted

the speed of pre-sales, which has subsequently caused developments to either be pushed back in delivery or put on hold. This has exacerbated

weaker confidence and uncertainty in the market among potential purchasers.

In addition, the apartment market has been working through a considerable level of supply and in some suburbs an oversupply. New stock coming to

market also - which is all taking longer to move - has consequently impacted on the pipeline of activity.

44

R P M R E A L E S TAT E G R O U P

LUKE KELLY

DIRECTOR, PROJECT MARKETING luke@rpmrealestate.com.au +61 400 688 520

OTHER DWELLING APPROVALS After holding up well through the first 9 months of

volume of apartment dwellings have seen remaining

months have revealed the extent of the downturn in

in the middle ring that have a higher than average

stock sit on the market for an extended period. This has resulted in some developers offering higher

calendar 2018, approval numbers over the last 6 the current lending environment.

commissions to agents – in some cases more than

Other dwelling approvals (apartments and

rental deals for buyers are also on offer such as a 5%

11.8% to 5,246 approvals from the previous quarter –

10% according to recent reports. In addition, lucrative rental guarantee over 5 years.

Further still, developers are also holding back

stock and releasing it to the rental market where

vacancy rates remain acute. This is largely the case with sub 50sq apartments as buyers struggle to

townhouses) over the March quarter 2019 were down the lowest recorded level since March quarter 2014.

More pronounced is the comparison to March quarter 2018 which shows a 41% fall in approvals. Across the previous 12 months the market has fallen 28.9% to record 24,655 other dwellings.

MORE SIGNIFICANT IS THE RESULT WHEN COMPARED TO THE SAME QUARTER A YEAR EARLIER WHICH SHOWS APARTMENT APPROVALS FALLING BY 51%. IN ADDITION, OVER THE PAST 12 MONTHS 12,620 APPROVALS WERE RECORDED WHICH REFLECTS A 40.5% REDUCTION FROM THE SAME 12 MONTH PERIOD A YEAR EARLIER.

obtain finance, and any significant reduction in the

The apartment market in particular has suffered

This reduction is all part of the cycle. However,

jeopardise apartments in the development that have

a reduction in local buyer appetite over an extended

lack of demand initially given population growth

retail price on these dwellings by the developer will already been sold.

Nevertheless, the fundamentals that drive the

property sector – strong population growth, record

spending on infrastructure and robust employment growth – are all well above trend.

severely from the exodus of overseas investors and period. Nevertheless, over the March quarter 2,917

apartment approvals were recorded. This is positive as it reflects an increase of 4.5% from December quarter 2018 which was the lowest quarter since

A P AQR1T M E AN R TK SE T/ O TO VW E RN VH IOE UWS E S

The overly represented inner ring and some suburbs

the market downturn has not been driven by a

is at record numbers, but tighter lending criteria coupled with cautious purchasers who suspect prices will fall further.

June 2017.

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

45

OTHER DWELLING APPROVALS

A P AQR1T M E AN R TK SE T/ O TO VW E RN VH IOE UWS E S

While apartment approvals have struggled over

increased year-on-year since 2012 peaking in the year to March 2018 with 13,455 approvals. This

extended upturn reflects an increase of 131% and highlights the increasing popularity of townhouse

developments. While approvals fell by 11% to 12,035 over the year to March quarter 2019, it is still in line

with the average that was recorded over the boom 2

TOWNHOUSE APPROVALS

the past couple of years, townhouse activity has

year period of 2017 and 2018 (12,365 approvals).

Until now townhouse activity has held up well and

hampered by difficulties obtaining finance â&#x20AC;&#x201C; for both buyers and small to medium sized developers â&#x20AC;&#x201C; as a result of tighter lending standards. This can also

be seen in the change from the same quarter a year earlier, with approvals falling by 21%.

12 mths to Mar-15

12 mths to Mar-17

19%

12 mths to Mar-18

11%

12 mths to Mar-19

18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000

50%

12 mths to Mar-15

Source: ABS R P M R E A L E S TAT E G R O U P

12 mths to Mar-16

9%

20,000

0

46

13%

22,000

APARTMENT APPROVALS

quarter reflects a market that is void of confidence,

16%

24,000

is coming off a record high. A 26% drop in activity in March quarter 2019 compared to the previous

15,000 14,000 13,000 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0

3%

12 mths to Mar-16

7%

12 mths to Mar-17

6%

12 mths to Mar-18

41%

12 mths to Mar-19

KEY MEDIUM DENSITY BUILDING DATA

March qtr. 2019

% change from previous qtr.

TOTAL TOWNHOUSES

TOTAL APARTMENTS

2,329

2,917

-26.2%

4.5%

TOTAL 5,246

-11.8%

% change from previous yr

-20.8%

-51.0%

-41.0%

% change 12 months earlier

-10.6%

-40.5%

-28.9%

12 months to March qtr. 2019

COMMENCEMENTS Dec qtr. 2018

% change from previous qtr.

12,035

OTHER DWELLINGS 5,189

-21.9%

% change from previous yr

-28.0%

% change 12 months earlier

11.1%

12 months to Dec qtr. 2018

TOTAL APARTMENT & UNIT PRICES

33,313

MEDIAN PRICE

March qtr. 2019

$586,500

March qtr. 2018

$601,000

Dec qtr. 2018

$589,500

NOTE: Approvals will be the current quarter (March). Commencements and completions are delayed by a quarter (Dec).

12,620

COMPLETIONS

A P AQR1T M E AN R TK SE T/ O TO VW E RN VH IOE UWS E S

APPROVALS

24,655

OTHER DWELLINGS

Dec qtr. 2018

% change from previous qtr.

6,407 5.6%

% change from previous yr

-16.9%

% change 12 months earlier

-18.3%

12 months to Dec qtr. 2018

CHANGE FROM QTR.

0.5%

25,597

CHANGE FROM PREV. YR

2.4% Source: ABS, REIV Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

47

A P AQR1T M E AN R TK SE T/ O TO VW E RN VH IOE UWS E S

THE PROSPECTIVE GOOD NEWS FOR HOMEOWNERS IS A POSSIBLE LOWERING OF THE MORTGAGE ASSESSMENT RATE WHICH WOULD INCREASE BORROWING CAPACITY.

48

R P M R E A L E S TAT E G R O U P

OUTLOOK

LUKE KELLY

DIRECTOR, PROJECT MARKETING luke@rpmrealestate.com.au +61 400 688 520

This is unlikely as the major concern for the market

The reality is a constant flow of people at historically

postponed pipeline projects move through to enter

provides). Rather, the main hurdle is obtaining the

who require housing. This can either be through home

for the remainder of the year before some of the

the market and underlying demand converts to real

demand as lending conditions ease. This could come

in the form of action being taken by the RBA regarding a cut in the cash rate or APRA lowering serviceability requirements, or both.

A change in the cash rate is now increasingly likely

to occur mid-year rather than the end of 2019 given

inflation remains low. However, a cut to the cash rate

this time around might not be the panacea it has been previously.

After the 2008 GFC and slump in prices in 2011/12, it

took 4 to 5 months after the initial rate cut to kickstart sales. If a rate cut was applied in June, we would

expect a recovery by at least the end of this year.

is not obtaining cheaper finance (which a rate cut

necessary level of loan to be able to buy. This can only be resolved by APRA decreasing the loan buffer of

7.25% and, to a lesser extent, the rigid approach major banks are taking when assessing household income.

The prospective good news for homeowners is the

high levels have moved to Victoria in recent years

ownership or renting; either way, construction needs to take place. This activity, however, wonâ&#x20AC;&#x2122;t start until developers are confident there are loan-approved

buyers ready to purchase, hence the growing level of underlying demand.

discourse between the RBA and APRA regarding

With the Coalition government retaining power, we

assessment threshold being lowered to 6.75%. This

recovery from recent downturns. This may be assisted

the best course of action, which could result in the would allow buyers to borrow more and stimulate activity to begin the next cycle of development.

A P AQR1T M E AN R TK SE T/ O TO VW E RN VH IOE UWS E S

Subdued market conditions are likely to continue

would expect the market to take a similar path to

by the recently announced First Home Loan Deposit

scheme, which will see eligible first-home buyers with at least a 5% deposit for a home, qualify for a loan.

Theyâ&#x20AC;&#x2122;ll also save around $10,000 by not having to pay mortgage insurance to lenders. The scheme will be capped at 10,000 loans per year.

As with all new policies, however, the intended (and

unintended) effects may not be known for some time.

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

49

50 R P M R E A L E S TAT E G R O U P

A P AQR1T M E AN R TK SE T/ O TO VW E RN VH IOE UWS E S

LUKE KELLY

DIRECTOR, PROJECT MARKETING luke@rpmrealestate.com.au +61 400 688 520

PROJECT IN FOCUS The boutique development is situated in a premium

A RANGE OF ARCHITECTURAL TOWNHOMES

station, 5-minute drive to Tarneit medical centre,

A BOUTIQUE COMMUNITY, ORCHARD ROW, WITHIN THE NEW MASTER PLANNED

DEVELOPMENT OF ORCHARD ESTATE, TARNEIT, LOCATED 27KM FROM MELBOURNE’S CBD.

location; only a 7-minute drive from Tarneit train

13-minute drive from Werribee Pacific shopping centre and easy access to Princes Freeway via Doherty’s or Leakes Road.

Developed by established developers Dahua in

Future amenities in Orchard estate include the

community comprises 2-, 3- and 4-bedroom

walking distance, as well as Tarneit West train station,

conjunction with builder SOHO Living, the new

townhomes, which maximise style, convenience and comfort.

Stage 1 features 3-bedroom, 2.5 bathroom, single or double garage homes priced from

$374,950 to $449,950. Each home comes with

high-end inclusions as standard and as complete turnkey packages.

A P AQR1T M E AN R TK SE T/ O TO VW E RN VH IOE UWS E S

RPM RECENTLY LAUNCHED STAGE ONE OF

1-hectare Orchard Park and a shopping centre within located less than 1km from Orchard Row. The estate is also located within walking distance to a future

non-government school and public primary school

and is currently within 1km of P-9 Tarneit College, a Catholic primary school and daycare centre.

Increasing investment and development in Tarneit underscores growing interest in townhome

properties throughout Melbourne’s outer ring.

Orchard Row, a range of architectural townhomes within the new master planned development of Orchard Estate, Tarneit

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

51

OVERVIEW

IN VICTORIA, FOREIGN BUYERS ACCOUNTED

FOR 4.8% OF PURCHASES FOR BOTH NEW AND

ESTABLISHED DWELLINGS IN MARCH QUARTER

INTERNATIONAL

2019. THIS PROPORTION OF NEW DWELLINGS

REPRESENTS A LONG TERM LOW, AND WAS ALSO

RELATIVELY LOW FOR ESTABLISHED DWELLINGS, WITH ONLY A SLIGHT IMPROVEMENT ON THE PREVIOUS QUARTER.

Policy changes in China restricting foreign investment outflows, onerous Australian foreign buyer taxes

and tighter lending conditions in Australia combined to result in a gradual retreat of foreign buyers from Victoriaâ&#x20AC;&#x2122;s residential market since the second half

of 2017. This exodus has been exacerbated over the

quarter by the decline in property prices and growing sentiment that the market will take longer to recover and be more gradual.

52

R P M R E A L E S TAT E G R O U P

JINYIN ZHANG

DIRECTOR, RPM INTERNATIONAL jinyin@rpmrealestate.com.au +61 451 898 886

26%

Q 1 IMNAT RE KR ENTA TO IVOENRAVLI E W

% OF FOREIGN PURCHASES BY DWELLING TYPE

24% 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%

■ New

■ Established

MAR 16

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MAR 19

11%

22%

15%

19%

14%

21%

14%

14%

12%

12%

13%

8%

5%

7%

10%

9%

11%

7%

9%

8%

9%

8%

6%

6%

4%

5%

Source: NAB Quarterly Residential Property Survey

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

53

AUSTRALIAN ECONOMIC OUTLOOK

The Australian economy performed solidly

The contraction has led to a growing belief that the

Product (GDP) increasing by 2.8%. However,

rate in either June or July, rather than later in the year.

Q 1 IMNAT RE KR ENTA TO IVOENRAVLI E W

over calendar year 2018, with Gross Domestic economic conditions are projected to weaken through 2019, partly attributed to the current property market downturn.

This is particularly the case given the Consumer Price Index (CPI) is sitting at the lower end of the RBAâ&#x20AC;&#x2122;s inflation target of 2-3%.

Private consumption is expected to slow, as high

However, another key determinant of any cash

impact personal wealth and consumer confidence.

wage growth. While unemployment is forecast

household debt and declining property prices In addition, dwelling investment is anticipated

to contract due to weakened sentiment towards

residential property, diminishing turnover activity in

established dwellings and discouraging purchasers of new dwellings.

54

Reserve Bank of Australia (RBA) will reduce the cash

R P M R E A L E S TAT E G R O U P

rate reduction will be the unemployment rate and to edge higher over 2019, it will still be relatively

low, exemplifying tight labour market conditions.

Subsequently, average earnings growth is

projected to escalate, although it has remained benign to start 2019.

AUSTRALIAN ECONOMY Economic indicators (% change)

2018 a 2019 f

GDP

2.80

2.10

Employment

2.70

1.80

Unemployment Rate

5.00

5.10

Average Earnings

1.60

2.20

Inflation

1.80

2.30

RBA Cash Rate

1.50

1.00

$A/US cents

0.71

0.75

a = actual f = forecast

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

Q 1 IMNAT RE KR ENTA TO IVOENRAVLI E W

POLICY CHANGES IN CHINA RESTRICTING FOREIGN INVESTMENT OUTFLOWS, ONEROUS AUSTRALIAN FOREIGN BUYER TAXES AND TIGHTER LENDING CONDITIONS IN AUSTRALIA COMBINED TO RESULT IN A GRADUAL RETREAT OF FOREIGN BUYERS FROM VICTORIAâ&#x20AC;&#x2122;S RESIDENTIAL MARKET SINCE THE SECOND HALF OF 2017

55

OVERVIEW

WHILE DWELLING PRICES HAVE SLIGHTLY DECLINED, DEMAND FOR RENTAL

RESIDENTIAL INVESTMENT

ACCOMMODATION HAS NOT EASED, WITH TOTAL MELBOURNE VACANCY RATE SITTING AT 2.2% -

THE SAME AS THE PREVIOUS QUARTER - BUT STILL BELOW THE ACCEPTABLE 3% TARGET.

Relatively low vacancy rates have resulted in modest annual gains in rents across most of

the defined areas in both established houses,

apartments and units over the past 2 years. Fourbedroom houses in the middle ring recorded the largest average annual rental gain with a 7.7%

increase, followed closely by 3-bedroom houses

in the inner ring with gains of 7.6%. This increase is on the back of weekly rent growth over the past 12 months of $30 and $90 respectively.

56

R P M R E A L E S TAT E G R O U P

MEDIAN RENTS House Bedrooms INNER

and apartments. This suggests the desire to reside

in more affordable areas is becoming more prevalent in comparison to the previous quarter, where the

Additionally, there has been robust rental increases in the outer ring of Melbourne and Geelong. This is not

demand in the area.

Melbourneâ&#x20AC;&#x2122;s outer ring has seen a significant 14.2% increase in average annual rent gains over the past

past 12 months.

4

$895

$895

$800

3

$430

$420

$440

$653 $370

$720

$378

$550

$560

3

$380

$385

2

$300

4

$410

2 4

GEELONG

3

$351

$430

$350 $428

$320

$743

$380 $580

Change from previous year

2 Year Average Annual Gain

$90

7.6%

$10

-$95

0.2%

$10

4.7%

$10

$30

1.3% 7.7%

$341

-$11

2.4%

$430

$0

1.0%

$380

$0

1.4%

$320

$20

$423

$13

2.8%

Change from previous year

2 Year Average Annual Gain

$5

2.6%

-$10

1.6%

$350

$360

$360

Bedrooms

Mar-18

Dec-18

Mar-19

1

$370

$380

$380

$680

$670

-$30

$400

$403

$8

$268

$300

$395

$400

$400

$300

$300

$420

2.8%

$10

5.5%

2.9%

Units & Apartments

INNER

MIDDLE

OUTER

two years for 1-bedroom units and apartments,

reflecting a weekly rental increase of $45 over the

$560

4

OUTER

surprising for Geelong given the significant increase in development in recent years, contributing to

$550

2

be noted that houses in the inner ring are sparse and resulting in excessive fluctuation.

$550

3

inner ring had the biggest rental increases. It should as such constitute low levels of rental properties,

Mar-19

R E QS 1I DME AN RT KI A E LT IONVVEERSVTI M EW ENT

the middle ring for houses, and the outer ring for units

Dec-18

2

MIDDLE In general, rental increases were most prominent in

Mar-18

GEELONG

2

$490

1

$330

3

$500

2

$340

1

$220

3 2 1 3 2 3

$700

$395 $255

$370

$480 $320 $510

$340 $220

$393

$495 $320

$503 $350 $220 $310

$398

$10

$3

$45 $10 $5

$0

$10

$28

1.3%

3.5% 1.6%

0.2%

14.2% 4.6% 1.9%

4.9%

4.3% 2.6%

Source: REIV Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

57

OVERVIEW

R E QS 1I DME AN RT KI A E LT IONVVEERSVTI M EE WN T

14.2%

MELBOURNEâ&#x20AC;&#x2122;S OUTER RING HAS SEEN A

SIGNIFICANT 14.2% INCREASE IN AVERAGE ANNUAL RENTAL GAINS FOR 1 BEDROOM UNITS AND APARTMENTS.

4.29%

UNITS IN THE INNER RING ALSO CONTINUE TO ACHIEVE HIGH YIELDS WITH AN AVERAGE OF 4.29% OVER THE PAST 12 MONTHS.

In Geelong, 2-bedroom houses had the largest

VACANCY RATES & YIELDS:

a $20 increase in weekly rent over the past year.

While vacancy rates have only modestly changed

average annual increase, with rental gains of 4.9%,

most areas in the region, they all remain below the

average annual rental gain of 5.5%, which represents Three-bedroom houses had the second largest

reflecting a weekly increase of $10 over the past 12 months. Over the past 2 years, Geelong has

averaged rental gains across all dwelling types of between 2.6% and 5.5%, while the outer ring of

Melbourne has averaged gains of between 1.0%

ring, with a vacancy rate of 3.6%. Consistently low

vacancy rates reinforce the consensus that there is no oversupply of stock in the market.

This being the case, rental growth has remained,

Overall, across all regions, other dwellings (units

investing in detached housing in the outer and

and apartments) performed slightly better when compared to the growth recorded in detached

houses on a rolling 2-month average. Interestingly, there was a significant reduction in 4-bedroom

houses in the inner ring. This could reflect renters instead opting for a newer, bigger and cheaper rental properties in the outer ring.

R P M R E A L E S TAT E G R O U P

acceptable level of 3%. The exception is the middle

and 14.2%.

deciding they were not willing to pay more and

58

with either slight increases or decreases across

providing appealing yields for investors. For those regional areas, land value appreciation tends to be

the driving force in the earlier stages. However, with vacancy rates at acute levels, and what seems to

be a movement from the middle to the outer ring for

renters, rental yields for detached houses, units and apartments in outer and regional areas top the list.

DAVID YANG

MANAGER, PROPERTY MANAGEMENT d.yang@rpmrealestate.com.au +61 402 446 058

Due to significant capital gains seen in both detached

picked up over the past 2 quarters with more modest

Regional areas of Victoria continue to achieve the

rental yields have been below long-term levels.

months, rental yields for all dwelling types across

with robust rental prices given regional areas are

overall gains in the March quarter. Over the past 12

Rental growth cannot compare to the increases in

all regions have continued to increase, resulting in

capital gains. Nevertheless, with prices moderating

robust returns.

– particularly in other dwellings – rental yields have

Inner Total

Inner (0-4km)

Inner (4-10k m)

Mar-18 1.8 2.1

Source: REIV

1.5

1.4

1.7

1.5

2.2

2.2

1.6

Geelong

Mar-19

2.1

2.3

Outer (20+km exc. Mornington Peninsula) Melbourne Total

Dec-18

1.8

3.0

Outer (Mornington Peninsula)

in the inner ring also continue to achieve high yields

YIELDS

Middle (10-20km) Outer Total

traditionally tightly held. It’s important to note, units with an average of 4.29% over the past 12 months.

VACANCY RATE Melbourne

highest yields due to lower purchase prices, coupled

R E QS 1I DME AN RT KI A E LT IONVVEERSVTI M EW ENT

houses and other dwellings over the past 5 years,

2.1

1.4

2.0 2.1

2 Year Average

Houses

1.8

Middle

2.0 2.0

3.1

3.6

2.9

1.4

1.5

1.6

2.2 1.9

1.6

2.3 2.2 1.6

1.7

2.3 2.1

1.9

Inner

Mar-18 2.17%

2.02%

Dec-18 2.42%

2.45%

Mar-19 2.88% 2.51%

Outer

2.84%

3.03%

3.09%

Regional

3.87%

3.96%

4.17%

Units

Mar-18

Dec-18

Mar-19

Middle

3.03%

3.19%

3.28%

Metro

3.68%

3.80%

3.99%

Metro

Inner

Outer

Regional

2.46%

4.10%

3.23% 4.43%

2.71%

4.32% 3.42% 4.17%

2.82%

4.45%

3.63% 4.54%

Source: REIV, RPM

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

59

R E QS 1I DME AN RT KI A E LT IONVVEERSVTI M EE WN T

OUTLOOK

Tighter lending criteria for first home buyers -

With supply generally sitting well below demand

In addition, renters will be in a more favourable

difficult to secure finance during 2019, forcing

increase. These positives provide key incentives

regulations coming into play, which heavily restrict

and buyers in general - has made it increasingly them to continue to rent. Coupled with continuing high population growth, vacancy rates have

remained at low levels â&#x20AC;&#x201C; particularly in suburbs with strong infrastructure and amenities.

60

R P M R E A L E S TAT E G R O U P

levels, weekly rental prices and yields continue to for investors to enter the market, albeit in the face of lending headwinds.

position come the 1st of July 2020 with new rental landlords. As a result, once implemented, these

changes could discourage some investors from entering the market.

R E QS 1I DME AN RT KI A E LT IONVVEERSVTI M EW ENT

THE FEDERAL ELECTION RESULT WILL LIFT UNCERTAINTY ABOUT NEGATIVE GEARING AND CAPITAL GAINS TAX, PROVIDING A MORE POSITIVE OUTCOME FOR INVESTORS.

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

61

RESIDENTIAL INVESTMENT BUYER SURVEY DATA

CREDIT TIGHTENING BY BANKS TO INVESTORS -

Furthermore, while access to lending has been

The March quarter data also revealed an increasing

RECENTLY TO LOCAL INVESTORS - HAS RESULTED

investment come from a vast range of household

intending on building a single storey home compared

R E QS 1I DME AN RT KI A E LT IONVVEERSVTI M EE WN T

FIRSTLY TOWARDS OVERSEAS BUYERS AND MORE IN THE SHARE OF INVESTORS IN THE GREENFIELD MARKET FALLING FROM 29% IN THE MARCH

QUARTER 2018 TO 23% IN THE CURRENT QUARTER. This is no more evident than the drop in Chinese investors (largely foreign investors) and recently

migrated domestic investors. In the March quarter 2018, investors from China, India, and Sri Lanka

income levels. In the current quarter, 37% of

households indicated a household income above

$100,000 compared to 60% from the March quarter a year earlier. This suggests that if a buyer has

the required deposit and the ability to finance the

repayments (with no other outstanding debts), then they can obtain the necessary finance.

accounted for 64% of all investors. These same three

It also potentially highlights first home buyers may

only 12% (with no Indian buyers).

an owner occupier. In addition, households with a

nationalities in the March quarter 2019 accounted for

Conversely, Australian born investors increased from 24% in the March quarter 2018 to 78% in the March quarter this year. The drop in Indian and Sri Lankan

investors could be due to the fact that the property

cycle is bottoming out and they may be sitting it out and waiting for the market to improve.

62

curtailed, those that can obtain finance for

R P M R E A L E S TAT E G R O U P

be buying an investment property before buying as

share of investors (82%) indicated they were

to 68% in the same quarter 12 months ago. Moreover, 90% indicated they planned to build a home on a

smaller footprint (25 sqs or less) compared to 70% in the March quarter last year.

This corresponds with a desire (driven by the banks) to have a more manageable overall house and land

budget. In the March quarter 2019, 77% of investors

indicated an overall package price of under $500,000 compared to 44% in the March quarter 2018.

higher net income might have multiple investment

Also worth noting is â&#x20AC;&#x2DC;investmentâ&#x20AC;&#x2122; still ranks highly

environment, are finding it increasingly difficult to

affordability also increasingly important.

properties already and, in the current lending

secure additional finance as they may be considered too highly leveraged.

amongst purchasers as a key estate feature, with

March 2018

Investor

OWNER OCCUPIER VS INVESTOR

41%

$80-$100k

17%

Croatia

Vietnam

Sri Lanka China

Australia

$101-$120k

$60-$80k $40-$60k

<$40k

Undecided Single

30sq>

6%

26-30sq 21-25sq

SIZE OF HOME PLANNING TO BUILD

16-20sq <15sq

16%

$80-$100k

16%

-

Pakistan

Italy

Sri Lanka

New Zealand China

$60-$80k

18%

25% 43% 25% 2%

Owner Occupier

$120k>

-

17% 1%

77%

Australia

-

$101-$120k

5%

23%

0% 0% 0% 0% 2% 2% 5% 5% 7% 78%

-

19%

13% 68%

Double

Investor

$40-$60k

<$40k

Undecided

21%

32% 16% 0%

5%

Single

14% 82%

30sq>

5%

Double

21-25sq

5% 32%

<15sq

11%

26-30sq

16-20sq

R E QS 1I DME AN RT KI A E LT IONVVEERSVTI M EW ENT

$120k>

Bangladesh

Afghanistan

NUMBER OF STOREYS

Owner Occupier

India

Italy

HOUSEHOLD INCOME

71%

2% 2% 2% 2% 2% 3% 11% 19% 24% 34%

Malaysia

COUNTRY OF PERSON 1&2 TOP 10

29%

March 2019

47%

Q1 R E S I D E N T I A L M A R K E T R E V I E W | M A R C H Q U A R T E R 2 019

63

RESIDENTIAL INVESTMENT BUYER SURVEY DATA

March 2018 $600k>

14%

$500-$550k

20%

$550-$600k $450-$500k

BUDGET FOR HOME AND LAND PACKAGE

$400-$450k

$350-$400k

$300-$350k

R E QS 1I DME AN RT KI A E LT IONVVEERSVTI M EE WN T

<$300k

Shops

Presentation Parks/Water Proximity

Affordability

Location/Area

9%

$450-$500k

14%

$400-$450k

1%

$300-$350k

9% 1%

7%

Lot Size

$500-$550k

19%

Investment Schools

9%

$550-$600k

4%

Design

$600k>

22%

Facilities

Community

TOP 3 BEST FEATURES OF ESTATE

March 2019

$350-$400k <$300k

Facilities

2%

Community

1%

Design

Investment

3%

Schools

3%

Lot Size

4%

3%

8%

10% 19%

33%

Shops

Presentation Parks/Water Proximity

Affordability

Location/Area

5%

27%

36% 14% 0% 0% 2% 2%

11% 0% 2%

0% 0% 7% 5%

11%

27%

32%

RPM surveys every buyer on its clientsâ&#x20AC;&#x2122; estates in the greenfield market. 23% of all buyers indicated they were investors. The above illustrates demographic and purchase intent changes amongst this cohort based on surveys from the March quarter 2019 compared to the same quarter in 2018.

64

R P M R E A L E S TAT E G R O U P

OUR TEAM ERIC DICK

JINYIN ZHANG

eric@rpmrealestate.com.au

jinyin@rpmrealestate.com.au

EXECUTIVE CHAIRMAN

DIRECTOR, RPM INTERNATIONAL

+61 418 349 267

+61 451 898 886

CHRISTIAN RANIERI

KEVIN BROWN

CHIEF EXECUTIVE OFFICER

DIRECTOR, TRANSACTIONS & ADVISORY

+61 418 397 577

+61 416 445 078

christian@rpmrealestate.com.au

kevin@rpmrealestate.com.au

LUKE KELLY

MICHAEL STAEDLER

luke@rpmrealestate.com.au

m.staedler@rpmrealestate.com.au

DIRECTOR

RESEARCH MANAGER

+61 400 688 520

+61 434 619 280

PETER GRANT

DAVID YANG

peterg@rpmrealestate.com.au

d.yang@rpmrealestate.com.au

MANAGER, PROPERTY MANAGEMENT

DIRECTOR, COMMUNITIES

+61 402 446 058

+61 411 494 499

ROD ANDERSON

DIRECTOR, COMMUNITIES rod@rpmrealestate.com.au +61 417 595 859

DELENA BAJADA-GARDNER

ASSOCIATE DIRECTOR, COMMUNITIES delena@rpmrealestate.com.au +61 487 888 556

66

R P M R E A L E S TAT E G R O U P

DISCLAIMER Although all reasonable care has been taken in the preparation of this document, RPM Real Estate Group Pty Ltd takes no responsibility for the accuracy of the information

contained herein. It is recommended that all the information be verified if it is to be used for commercial purposes.

T +61 3 9862 9555

Level 5, 52 York Street

South Melbourne VIC 3205 rpmrealestate.com.au