RPM Quarterly Report - Q4 2018

D E C E M B E R

2 0 1 8

MARKET REVIEW

Q U A R T E R

RESIDENTIAL

Q4 MARKET OVERVIEW

RPM REAL ESTATE GROUP IS VICTORIA’S MOST SUCCESSFUL RESIDENTIAL DEVELOPMENT SALES, MARKETING AND ADVISORY AGENCY. WE SPECIALISE IN SALES WITHIN MASTER-

PLANNED COMMUNITIES, MEDIUM AND HIGH-DENSITY DEVELOPMENTS, GREENFIELD AND INFILL DEVELOPMENT SITES AND INTERNATIONAL INVESTMENT SALES. WE ADVISE OUR CLIENTS ON

ALL ASPECTS OF THE SALES PROCESS FROM SITE DUE DILIGENCE, ACQUISITION, PLANNING AND RISK MITIGATION THROUGH TO PRODUCT MIX, PRICING, LAUNCH, SALES AND SETTLEMENT. OUR RESEARCH-BACKED STRATEGIES DELIVER HIGHER REVENUES AND SALES RATES, AND BETTER RETURNS FOR OUR CLIENTS.

INSIDE

FROM OUR CEO

10

FEATURE STORY: INDUSTRY LEADERS INSIGHTS

DEVELOPMENT SITES

COMMUNITIES

16 20 44

FEATURE STORY: RESALE LAND MARKET: AN ANALYSIS

58

APARTMENTS / TOWNHOUSES

68

INTERNATIONAL

72

RESIDENTIAL INVESTMENT

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Q4 MARKET OVERVIEW

LEAD INDICATORS

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FROM OUR CEO

WELCOME TO THE LATEST EDITION OF RPM

obtain finance to complete construction. Some

REVIEW. IN THIS Q4 2018 ISSUE, WE UNPACK THE

the significant price growth over the past 2

Q4 MARKET OVERVIEW

REAL ESTATE GROUP’S RESIDENTIAL MARKET

KEY DRIVERS AND TRENDS ACROSS MELBOURNE AND GEELONG’S NEW HOUSING MARKET

BASED ON OUR RESEARCH-DRIVEN INSIGHTS AND EXPERTISE.

Over the December quarter, regulatory and credit-

That said, the reduction in lot sales will enable developers to catch up with lot construction.

market downturn.

$325,000 from the previous quarter.

the median lot price held steady, increasing 1.1% to

In the vacant land market, a 42% decline in

During a downturn, an efficient market knows how

58% from the same quarter a year ago) was

reducing their pricing margins, introducing value

compounded by a resale market that RPM

analysis reveals to be around 39% of total stock on the market. Over half of these resale lots

have since settled suggesting the majority are investors or owner occupiers now unable to

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

6 months given looming settlement periods.

Unlike housing values in the established market,

sales compared to the previous quarter (and

4

years and are being forced to sell within the next

induced headwinds, combined with the traditionally slower holiday period, underpinned a steepening KEVIN BROWN CHIEF EXECUTIVE OFFICER RPM REAL ESTATE GROUP

are also speculators who sought to cash in on

to adapt. Developers are responding by slightly add incentives and providing greater choice

regarding lot size and product to meet creditconstrained buyer budgets.

In the apartment and townhouse market, apartment

It’s worth reminding ourselves the current

MICHAEL STAEDLER

period a year ago, and townhouses – which up

period of exceptional growth that was

m.staedler@rpmrealestate.com.au

approvals plunged 71% compared to the same

Investors remain in retreat given continued tax and surcharge impositions, despite the recent removal of interest-only lending restrictions.

While the overall residential market will take time to recover throughout 2019, some sub-markets, such as vacant land, will likely recover more quickly as

first home buyers come back in larger numbers and access to credit improves.

We should start to see higher levels of activity

towards the second half of the year following the

Federal election once there is more certainty around proposed changes to negative gearing and capital gains tax and the market adjusts to ‘normalised’ lending levels.

never sustainable, and the overall market’s underlying fundamentals remain sound.

THE ‘SILVER LINING’ IS THAT FOR THE FIRST TIME IN SOME YEARS MORE FIRST HOME BUYERS CAN GET A FOOT ON THE PROPERTY LADDER GIVEN MODERATING LAND PRICES AND RECENTLYAPPROVED PSPS THAT WILL BOOST SUPPLY IN THE NORTH AND SOUTH EAST GROWTH CORRIDORS.

RESEARCH MANAGER

Q4 MARKET OVERVIEW

until recently have held up well – fell almost 16%.

market correction has followed a prolonged

+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.

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ECONOMIC ACTIVITY GROSS DOMESTIC PRODUCT (GDP)

VIC POPULATION

STATE FINAL DEMAND (SFD) - VIC

2.82% 2.82% 4.45% 3.89% 12 month change to Sept qtr 2018

5 year average

CONSUMER PRICE INDEX (CPI) Q 4L E M AA DR KI N ET D I OC VA ET RO VR ISE W

1.89% 1.83%

Sep-18

Source: ABS

Same month year earlier

12 month change to Sept qtr 2018

5 year average

RETAIL TURNOVER - VIC

5.15% 5.20% Dec-18

Same month year earlier

NATURAL INCREASE

10,502 Jun-18

9,395

Same qtr. year earlier

CASH RATE

1.50% Dec-18

1.50% Sep-18

1.50% Dec-17

Source: RBA

6

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

VARIABLE RATE

% change - 12 months earlier OVERSEAS MIGRATION

14,952 Jun-18

15,826

Same qtr. year earlier

5.34% Dec-18

5.31% Sep-18

5.22% Dec-17

4.65% 4.07% Dec-18

Dec-18

4.62% 4.11% Sep-18

4.51% Dec-17

Sep-18

4.12%

Dec-17

84,143

12 months to Jun-18 5.5%

% change - 12 months earlier

7.8%

3,018

3 YEAR FIXED RATE

1.8%

% change - same qtr. last year

Jun-18

DISCOUNTED RATE

11.8%

% change - same qtr. last year

NET INTERSTATE MIGRATION

BORROWING RATES

39,700

12 months to Jun-18

3,801

Same qtr. year earlier

14,316

12 months to Jun-18

% change - same qtr. last year

20.6%

% change - 12 months earlier

21.3%

NATIONAL TOTAL CHANGE

VIC TOTAL CHANGE

390,509

138,159

1.59%

2.19%

change from Jun-17 to Jun-18 % change - same qtr. last year VIC share

35%

■ Negative change ■ Positive change

TOTAL POPULATION

AUS 24,992,369 VIC 6,459,765

Source: ABS

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

FULL TIME Sep-18 to Dec-18 Last 12 months PART TIME Sep-18 to Dec-18 Last 12 months

6.69 88.54 33.73 31.99

1.2% 3.7% 0.3% 4.1% 3.2% 3.0%

47.8% 44.9% 26% 55% 57% 30%

$1,607 $1,581 $1,563 Nov-17

1.6% Source: ABS

4.2% 4.5% 6.1% Dec-18

Source: ABS

Sep-18

Same time last year

CONSUMER SENTIMENT

104.4 Dec-18

103.3 Dec-17

Source: Westpac-Melb institute

BUSINESS SENTIMENT

0.2

Dec-18

Source: RBA/NAB

13.5 Dec-17

The Westpac-Melbourne Institute Consumer

WAGES

May-18

UNEMPLOYMENT RATE

Q 4L E M AA DR KI N ET D I OC VA ET RO VR ISE W

Last 12 months

40.43 120.53

% Change

Vic contribution to AUS

May-17

Sentiment 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.

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VIC FINANCE NO. OF FHBS FINANCED

8,855 Dec-18

9,892

Same qtr. year earlier

NO. OF NON-FHBS FINANCED

21,999 25,159 Q 4L E M AA DR KI N ET D I OC VA ET RO VR ISE W

Dec-18

Same qtr. year earlier

FINANCE FOR NEW DWELLINGS

7,725 Dec-18

8,839

Same qtr. year earlier

VALUE OF LOANS - OWNER OCCUPIERS

$12.62B $14.39B Dec-18

Same qtr. year earlier

10% 13% 13% 12%

AVERAGE LOAN SIZE (FHBS)

$356,444 $341,976 Dec-18

Same qtr. year earlier

AVERAGE LOAN SIZE (NON-FHBS)

$430,366 $437,676 Dec-18

Same qtr. year earlier

FINANCE FOR ESTABLISHED DWELLINGS

23,129 Dec-18

26,212

Same qtr. year earlier

VALUE OF LOANS - INVESTORS

$4.57B Dec-18

$6.05B

Same qtr. year earlier

4% SHARE OF FHB LOANS

2% 12% 24%

28.7% 28.2% Dec-18

Same qtr. year earlier

Source: ABS

MELBOURNE PROPERTY MEDIAN HOUSE PRICE

$796,500 Previous qtr.

$819,000

Same qtr. year earlier Source: REIV

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

MEDIAN LAND PRICE

Dec-18

Dec-18

$589,000

Dec-18

$827,000

MEDIAN UNIT PRICE

3.7% 2.7%

$599,000 Previous qtr.

$593,000

Same qtr. year earlier

AUCTIONS HELD

$325,000

1.7% 0.7%

$321,000 Previous qtr.

$302,300

Same qtr. year earlier

3,118

CLEARANCE

Dec-18 1.2% 7.5%

3,398 Sep-18

4,449

Same month year earlier

45% 58% 66%

VIC BUILDING DETACHED HOUSE APPROVALS 9,655 Dec-18 9,566 Same qtr. year earlier 39,639 Last 12 months

0.9% 7.0%

HOUSE COMMENCEMENTS

55.4% 14.3

0.4% 7.44%

6,239 Sep-18 8,653 Same qtr. year earlier 34,922 Last 12 months

7.4%

Dec-18

22,653 31.6%

Same qtr. year earlier

15,752

27.9% 13.4%

67,824 3.0%

Last 12 months

Sep-18

18,201 13.5%

Same qtr. year earlier

73,466 10.2%

Last 12 months

TOTAL COMPLETIONS

OTHER COMPLETIONS

12.4%

15,486

TOTAL COMMENCEMENTS

OTHER COMMENCEMENTS

HOUSE COMPLETIONS 11,242 Sep-18 10,005 Same qtr. year earlier 37,812 Last 12 months

5,831 Dec-18 13,087 Same qtr. year earlier 28,185 Last 12 months

Q 4L E M AA DR KI N ET D I OC VA ET RO VR ISE W

9,513 Sep-18 9,548 Same qtr. year earlier 38,544 Last 12 months

TOTAL DWELLING APPROVALS

OTHER DWELLING APPROVALS

6,493 Sep-18 8,256 Same qtr. year earlier 27,325 Last 12 months

17,735

21.4% 19.6%

Sep-18

18,261 2.9%

Same qtr. year earlier

65,137 5.9%

Last 12 months

Source: ABS

MELBOURNE PROPERTY VACANCY RATE - MELB

2.2% 2.2% Dec-18

Dec-17

AVERAGE DAYS ON MARKET - METRO MELB

42

Dec-18

32

Dec-17

MEDIAN METRO HOUSE RENT

$450 Dec-18

$440 Dec-17

2.3%

MEDIAN METRO OTHER DWELLING RENT

$420 Dec-18

$400 Dec-17

5.0%

Source: REIV

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FEATURE STORY:

INDUSTRY LEADERS INSIGHTS

KEVIN BROWN

CRESSIDA WALL

RPM REAL ESTATE GROUP

PROPERTY COUNCIL OF AUSTRALIA

RPM SOUGHT SOME EXPERT VIEWS FROM KEY

What does the Andrews government re-election

MS: The Andrews government has a strong track

DRIVERS OF MELBOURNE’S NEW HOUSING MARKET

industry and property market in 2019?

and involvement of local business, and we expect

Q4 MARKET OVERVIEW

INDUSTRY LEADERS ON PREDICTIONS AND KEY IN THE YEAR AHEAD. THESE PERSPECTIVES

CHIEF EXECUTIVE OFFICER

and policy platform mean for the development

ARE FROM CRESSIDA WALL (CW), VICTORIAN

CW: First, a government with a clear majority is a

COUNCIL OF AUSTRALIA, MARK STONE (MS), CHIEF

Victoria, and this is especially true for the property

EXECUTIVE DIRECTOR FROM THE PROPERTY

EXECUTIVE OF THE VICTORIAN CHAMBER OF

COMMERCE AND INDUSTRY (VCCI), CRAIG JAMES (CJ), COMMSEC CHIEF ECONOMIST AND KEVIN

BROWN (KB), CEO OF RPM REAL ESTATE GROUP.

this to continue into 2019.

Over the past four years the government has

industry.

and employment as well as the implementation of

Voters responded to a positive plan for investment in a growing city through the major infrastructure projects now underway which are reshaping

overseen significant growth in Victoria’s economy an ambitious infrastructure agenda. While this is a credit to the government, it also reflects the hard work and innovation of Victoria’s 590,000 private sector businesses.

rates and electoral swings demonstrates that six out

The government has a continued commitment to

Labor above the state average swing of 4.7%.

forecast to increase over the next decade, this is

of 10 of the highest growth suburbs had swings to

Projects like the Suburban Rail Loop have the

potential to transform the city as we know it. We will be working with the government to ensure

that opportunities for development around that

sound financial management and, while debt is

not expected to compromise Victoria’s AAA credit rating. International credit agency Moody’s re-

confirmed the State’s AAA credit rating and stable outlook following the election.

project are maximised to link health, education and

Victoria’s economy has been supported by strong

housing to meet the needs of the community.

levels of overseas and interstate migration. This

employment hubs, and to ensure a strong supply of R P M R E A L E S TAT E G R O U P

record on economic management, project delivery

good thing for business confidence and certainty in

Melbourne – in fact, comparing population growth

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VICTORIAN EXECUTIVE DIRECTOR

population growth in recent years, driven by high

MARK STONE

CRAIG JAMES

VICTORIAN CHAMBER OF COMMERCE AND INDUSTRY

COMMSEC

CHIEF EXECUTIVE

CHIEF ECONOMIST

KB: The Andrews government deserved their

is expected to moderate slightly over the next four

the required infrastructure to support a growing

live and work. While Victoria’s population growth

years, it should remain at relatively high levels and continue to support both consumer spending and demand for housing.

A key driver of economic and employment

landslide win as they have been getting on with and prosperous Melbourne and Victoria. They

have a clear mandate to invest in an $80 billion

infrastructure pipeline to accommodate and sustain Victoria’s population growth, which is welcome.

activity in 2019 will be the progression of major

With a looming Federal election, what policies and

government. Among these are the commencement

industry and economic growth?

infrastructure commitments made by the Andrews of construction on the North East Link, business

political outcomes will affect the development

case, design, and pre-construction works on the

CW: It’s vital that federal policy settings work to

regional rail to Geelong and Ballarat.

industry which is Australia’s largest employer and

Suburban Rail Loop, and an airport rail link with fast

2019 provides the Andrews government with the

sustain and promote confidence in the property contributes around 13% of GDP.

opportunity to keep Victoria strong and growing.

There are a range of issues which could impact

to increasing the payroll tax threshold, enhancing

at the state level, through to tighter credit markets,

We are keen to see the new government commit

innovation and exporting, reducing energy costs and delivering key infrastructure projects.

confidence, ranging from ad hoc planning decisions

THE ANDREWS GOVERNMENT HAS A STRONG TRACK RECORD ON ECONOMIC MANAGEMENT, PROJECT DELIVERY AND INVOLVEMENT OF LOCAL BUSINESS, AND WE EXPECT THIS TO CONTINUE INTO 2019.

Q4 MARKET OVERVIEW

reflects Victoria’s strong credentials as a place to

final recommendations from the banking royal

commission and increases in taxes and charges for property.

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FEATURE STORY: INDUSTRY LEADERS INSIGHTS

Against this backdrop, it’s essential we don’t make

On the workplace relations front, Labor has

as negative gearing and capital gains tax which could

employment costs, reduce flexibility for employers

changes to important policy settings in areas such

have wider impacts across the property industry and the rest of the economy.

We also need a sensible approach to managing the

Q4 MARKET OVERVIEW

VICTORIA’S ECONOMIC FUNDAMENTALS ARE STRONG. VICTORIA IS LEADING THE NATION WITH AN ECONOMIC GROWTH RATE OF 3.5% IN 2017/18, THE STRONGEST INCREASE AMONG ALL THE STATES. WHILE THIS STRONG PERFORMANCE SHOULD MODERATE SLIGHTLY IN 2019, WE EXPECT THE VICTORIAN ECONOMY TO CONTINUE TO PERFORM WELL. MARK STONE

challenges of population growth in our major cities.

Our own research shows an overwhelming majority

of Australians think population growth can be a good thing if we plan for it accordingly. The opportunity

action. These include the introduction of sector wide bargaining and restrictions on labour hire,

independent contracting and casual employment. In the lead up to the federal election we will be calling

for a simpler workplace relations system that helps business to grow.

Energy security, reliability and affordability

short term and ad hoc cuts to the migration program.

members want energy costs down, reliability up

to support our growing cities, rather than resort to

MS: Five key areas of federal policy that will impact

the Victorian economy are infrastructure, workplace relations, energy, export support and taxation.

Victorian business will be looking to the 2019

federal budget to build on the solid infrastructure

remain key priorities for Victorian business. Our and for many, cleaner energy. While the National Energy Guarantee has been discontinued, we

remain committed to the development of a national emissions reduction mechanism to encourage investment in new generation and help take pressure off energy prices.

allocation provided to the state in this year’s budget

Support for exporting is also an important issue for

rail link, the North East Link, a rail connection to

businesses currently exporting, far too many

which included funding for a Melbourne Airport

ease urban congestion. The Victorian Chamber is

urging the major parties to ensure investment in job creating, city-shaping and productivity enhancing

infrastructure projects remain a priority in the lead up to the 2019 federal election.

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

and potentially result in increased levels of industrial

for the government is to plan and invest properly

the Monash employment precinct and monies to

12

committed to a range of reforms that would increase

Victorian business. With less than 3% of Victorian businesses are missing out on the opportunity to reach growing overseas markets. Exporting needs to be more accessible for small and

medium businesses which is why we are calling for policies and programs that get more businesses internationally engaged.

Tax policy will also be an important issue in the

election with changes to company tax, personal income tax, negative gearing, capital gains tax, R&D tax offsets and franking credits all under consideration.

KB: The property industry will be closely monitoring further developments regarding Labor’s policies

on negative gearing, halving the capital gains tax

gains tax discount from the current 50% to 25%, and removing franking credit refunds.

The current detail around these policy platforms is not yet clear but any changes may have a

detrimental short term effect on investor sentiment.

changed to stimulate demand?

conditions and the imposition of foreign purchaser

taxes. What we are now seeing is the slowing of the apartment sector.

the federal government’s annual immigration

intake, is sensible. Notwithstanding, any cuts to the permanent migration intake need to be carefully considered.

level and extra stamp duty charges at state level also require renewed consideration.

The recent decision by APRA to remove interest-only residential lending restrictions is welcome but may

not have a significant effect on stimulating investor

What policy makers neglected to consider when

they introduced these changes is that the investor market underpins the viability of apartment

projects. Without those projects being developed,

there is less stock available for owner-occupiers or for renters. That hurts affordability.

property market. This began in late 2017 and,

planning and workforce requirements to inform

costs associated with FIRB approval at a federal

change was implemented at a time of tighter lending

plan floated at the last Council of Australian

states and territories regarding infrastructure,

bring back investors. In addition, FIRB rules and the

off-the-plan developments were removed. This

KB: APRA’s intervention into the banks’ lending

Government’s meeting involving more input from

need to review off-the-plan regulatory settings to

CW: In July 2017, stamp duty concessions on

For decades, strong population growth has

been good for the Victorian economy. A national

Therefore, both the federal and state governments

Q4 MARKET OVERVIEW

rules around negative gearing, halving the capital

What regulatory settings need to be created or

activity given tighter lending standards around serviceability.

What are your key predictions in terms of how the

property market and economy will perform in 2019?

CW: The Victorian Pre-Election Budget Update

suggested that Treasury views the issues affecting

standards has had a significant effect on the

residential markets at the moment as a short-term correction, with the projected downturn to last 12

combined with increased prices, began to

dramatically slow the market around mid-2018. The

impact has been felt especially by first home buyers and investors.

months. Our members are concerned that challenges

will be more pronounced and last longer – although of course we hope the Treasurer is right.

Melbourne’s commercial market remains particularly

Changes to the FIRB rules at a federal level and

increased stamp duty for foreign investors at a state level has seen the investor market all but disappear

which, over time, will have a very negative impact on rental availability, which is already at acute levels.

strong, with decade-low vacancy rates in the CBD.

This is great for now, but we’ve seen a near shutdown of the development pipeline since the introduction of C270 planning controls in November of 2016.

Commercial stock coming to market between now

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FEATURE STORY: INDUSTRY LEADERS INSIGHTS

and 2020 is heavily pre-committed and, with the

Professional service exports are also growing

in 2017 of 25,000+ lots which was unsustainable.

expected to rise.

management consulting, engineering and

the peak was speculators who are disrupting current

pipeline beyond then non-existent, rents could be

MS: Victoria’s economic fundamentals are strong.

The significant pipeline of new infrastructure

increase of all the states. While this strong

to many other Victorian businesses in industries

performance should moderate slightly in 2019,

we expect the Victorian economy to continue to

Q4 MARKET OVERVIEW

architectural services.

Victoria is leading the nation with an economic growth rate of 3.5% in 2017/18; the strongest

perform well.

Victoria is experiencing robust jobs growth with unemployment at a 7-year low. Labour market

conditions are expected to remain solid, with further falls in the Victorian unemployment rate expected.

While there is some uncertainty regarding the short-

Supply is lifting to meet the previous strong

transport, manufacturing and engineering.

A key focus of the Victorian Chamber in 2019 will be to ensure the Andrews government’s Local

growth prospects in 2019. For example, Victorian

tourism is experiencing significant growth arising

property in 2016-2017, especially compared with other states and regional areas.

to compete for both large and small government

painful for the broader economy. But it is important

contracts across the state.

see an increase in sales as buyers who have been start coming back into the market. This will be

be reduced if the adjustment process became too to stress that the adjustment is for Sydney and Melbourne. In fact Victorian regional areas like

Geelong still have healthy housing markets with rising prices. Low unemployment rates will also support the adjustment process.

dependent on developers understanding that they

What are the key issues?

given the substantial price growth in recent years

CW: The Property Council’s election platform

need to adjust prices to meet market expectations and buyers’ reduced borrowing capacity.

We will see a slow recovery towards the second half

international travel.

to a normalised level, which is 30% below the peak

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

demand. Exposed are the high prices paid for

The good news is that interest rates are low and can

size enterprises with a full and fair opportunity

from the growth of the Asian middle class and

increasing levels of disposable income available for

in the Sydney and Melbourne housing markets.

Jobs First policy provides small and medium

waiting to see if prices have bottomed will slowly

performing strongly and we are confident about

market.

as diverse as construction, training, finance, ICT,

support underlying demand for housing over the

Across the wider economy, Victorian business is

sales as they attempt to offload land lots in today’s

CJ: Our view is that 2019 will be a time of adjustment

KB: Post Australia Day will be the earliest we may

medium term.

One of the other key contributors in the buildup to

projects underway or planned will provide a boost

term outlook for the residential property market, continued solid population growth should help

14

steadily, especially in legal, accounting,

of 2019. We predict the land market will come back

called for greater housing supply and choice,

improvements to our planning system, an evidenceled infrastructure pipeline, support for Melbourne’s

CBD and a tax environment to welcome investment.

Perhaps the most immediate issue that is necessary

KB: Continued investor roadblocks regarding stamp

controls which has now been announced by the

buyer cohort in the shadows, which will continue to

is an immediate review of the C270 city planning

Minister for Planning. These inflexible controls are

a blunt tool and, since they were introduced over 2

years ago, only two residential and two commercial developments have been approved against them.

duty surcharges for foreign investors will keep this

What does the property and development industry need to do to succeed in a challenging market?

impact rental availability.

CW: Our industry works incredibly hard to provide

While it is early days, Build to Rent will be an

and even in difficult economic times, a quality

outcomes for customers and the community

emerging opportunity, with developers seeking

development will attract end-consumers. But we also know some people in the industry have not

previously faced economic conditions like the ones Q4 MARKET OVERVIEW

we are currently experiencing and it is not always easy to get the finance and approvals that are

RESEARCH COMMISSIONED BY THE PROPERTY COUNCIL SHOWS THAT IN LESS THAN TWO DECADES, BY 2036, THE CBD WILL NEED AT LEAST A 50 PER CENT INCREASE IN CBD FLOORSPACE OF 9.1 MILLION SQM – INCLUDING AN ADDITIONAL 4.4 MILLION SQM OF OFFICE FLOORSPACE - TO ACCOMMODATE FUTURE WORKFORCE PROJECTIONS.

required to make a project a success.

We, as the body representing our industry, look forward to advocating strongly to government

for the industry’s needs to make sure that policy settings are right to respond to the current

conditions. We know the ‘old hands’ in our industry have lots of wisdom about how to face these

conditions effectively and as times change, we The research found that without changes to the C270 regime, the annual economic output of the state

could be reduced by as much as $7 billion per annum.

We continue to call for the immediate introduction of interim CBD planning controls to increase flexibility and support employment growth, and for the

Government to prepare an economic strategy for the

to lobby the government for assistance from a tax perspective to make it work financially.

Despite moderating market conditions, pent up

responsive to the communities in which it operates.

KB: Developers need to consider adjusting

price growth over the last few years has continued to impact affordability for many buyers.

also know that our industry needs to continue to be

pricing to an affordable level given current market

conditions and continue to offer a diversity of high

quality housing that buyers can afford and aspire to live in.

CBD to ensure it remains a key economic hub.

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OVERVIEW

THE DEVELOPMENT SITE MARKET IS UNDERGOING SIGNIFICANT CHANGE AND HAS OFFICIALLY

DEVELOPMENT SITES

RESET ITSELF. DEVELOPERS IN BOTH THE INFILL AND GREENFIELD SEGMENTS ARE NAVIGATING THE MARKET DOWNTURN AND IN SOME

INSTANCES LOWERING THEIR RISK PROFILES. NOTWITHSTANDING, THERE IS STILL SOLID

DEMAND FOR QUALITY DEVELOPMENT ASSETS IN BOTH THE GREENFIELD AND INFILL SPACE.

We are seeing a shift from developers to alternate asset classes to capitalise on gaps in the market which have been created amid softening market conditions. Some developers are recognising

opportunities where traditional players can no longer participate or are bringing projects to

market in a different way. The Assembly residential development in North Melbourne, for example, is enabling tenants to rent their unit for a few years

before purchasing. Innovative solutions such as this will lead to increased development site activity as

they address market issues early on when securing opportunities.

16

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

Land Strategy, Moreland City Council has recently

offer security, solid yields and low planning risk.

government panel. The council’s rezoning strategy

into commercial and industrial assets which Boutique office developments in city fringe

locations in particular are an attractive market due to competitive rents relative to the CBD, access to

parking and staff retention. Industrial developments are at a 10-year high as REITS and institutions seek long term, secure assets that drive up land values

deferred development applications to a state

was originally designed to facilitate high quality medium density developments. However, with

uncertainty surrounding the proposed outcomes

and approval timeframes, developers are unable to commit to future projects.

for well-located industrial land.

With strong fundamentals underpinning the

We are also seeing developers shift capital into

in the medium to long term land market and

interstate markets including Queensland and South

Australia where the effects of the downturn are less pronounced, and the volume of capital required

is substantially less than in Australia’s two major markets, New South Wales and Victoria.

This movement of capital has also been driven by

planning risks and uncertainty from councils around the decision making process for development

approvals, with authorities pushed to capacity over

the last three years. For example, under its Industrial

economic climate, there is still confidence

strong appetite for approved, de-risked quality landholdings.

BOUTIQUE OFFICE DEVELOPMENTS IN CITY FRINGE LOCATIONS IN PARTICULAR ARE AN ATTRACTIVE MARKET DUE TO COMPETITIVE RENTS RELATIVE TO THE CBD, ACCESS TO PARKING AND STAFF RETENTION.

DEVELOPMENT SITES

Other developers are broadening their portfolios

To this end, 3 large-scale development site

transactions in Melbourne’s growth corridors with a

combined yield of more than 2,000 lots are slated to

come to market with RPM Real Estate’s Transactions & Advisory division in the first quarter of 2019.

These opportunities are located in Strathtulloh,

Wollert and Sunbury, with strong interest expected.

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

17

QD4E V M EA LROK PE M T EONVT E S R IVTI EE SW

OUTLOOK The market is still adjusting to the short term

In addition, the movement of developers between

for the next 6 months. Nevertheless, strong

into each segment and further strengthen those

impacts of the downturn and will remain subdued fundamentals continue to instill confidence in the englobo market and the strong supply of capital will support continued activity and demand for development sites.

different asset classes will bring new players markets.

Large segments of the market believe we are

entering a period where it is right to buy and we are seeing this sentiment from many developers and

investors who are actively pursuing opportunities.

18

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

QD4E V M EA LROK PE M T EONVT E S R IVTI EE SW

THREE LARGE-SCALE DEVELOPMENT SITE TRANSACTIONS IN MELBOURNE’S GROWTH CORRIDORS WITH A COMBINED YIELD OF MORE THAN 2,000 LOTS ARE SLATED FOR SALE BY RPM FOR THE FIRST QUARTER IN 2019 WITH STRONG INTEREST EXPECTED.

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

19

OVERVIEW

THE DOWNTURN ACROSS MELBOURNE AND GEELONG’S LAND MARKET SHARPENED IN

DECEMBER QUARTER 2018, UNDERPINNED

BY RESTRICTIVE CREDIT CONDITIONS WHICH CONTINUE TO WEAKEN BUYER CONFIDENCE.

THE TRADITIONAL HOLIDAY SLOWDOWN ALSO

COMMUNITIES

CONTRIBUTED TO CONTRACTING LOT SALES.

A secondary resale market – which RPM analysis

reveals is around 2,400 lots or 39% of total stock on the market – that emerged in the lead up to the peak in March 2018 has also impacted developer sales

rates and pricing margins (see resale market feature story on page 44).

The growth corridors of Melbourne and Geelong

contained 37 more active estates from the start of

2018, with new estates coming online and previous estates coming back onto the market. However, in

December quarter 2018, total lot sales declined 58% to 2,401 lots, and new lot releases fell 50% to 2,634 compared to the same quarter 12 months ago.

Despite lot releases outpacing lot sales, developers are willing to accept slower sales rates given the 18 month delay in title timeframes to reduce valuation 20

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 MELBOURNE GROWTH CORRIDORS maintaining, if not slightly reducing, their pricing

margins by between 5%-7% and introducing value-

followed the slowdown in the established dwelling market, the same can’t be said for prices. In

December quarter 2018, Melbourne’s median house

5,000

100

4,500

80

4,000 3,500

60

3,000

40

2,500

20

price declined 3.7% to $796,500 from the previous quarter and 2.7% from the same quarter in 2017.

0

Comparatively, the median lot price for Melbourne’s growth corridors increased by 1.1% to $325,000

5,500

120

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

While sales activity in the new housing market has

6,000

140

NUMBER OF ESTATES

add incentives.

6,500

160

GROSS LOT SALES

risk and catch up with lot construction. They are also

2,000 DEC 15

Active Estates

MAR 16

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

1,500

DEC 18

Gross Lot Sales

New Estates

from the previous quarter and 7.5% from the same

2018 remained unchanged from the previous

quarter, resulting in an increase in the per sqm median lot price.

Although there was a slight increase of 1.1% over the quarter we are seeing ‘below & above the

line’ incentives and or discounts being offered

representing 5%-7% or $15,000 to $20,000 off the gross price of $325,000.

435 430

300,000

425 420

250,000

415

200,000

410 405

150,000

400

100,000

395 390

50,000 0

MEDIAN LOT SIZE �SQM�

At 400 sqm, the median lot size in December quarter

350,000

MEDIAN LOT PRICE �$�

quarter a year earlier.

385 DEC 15

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

380

Source: RPM

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

21

OVERVIEW

MELBOURNE GROWTH CORRIDORS

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

49%

% CONTRIBUTION TO TOTAL GROSS LOT SALES

36%

325K>

% OF TOTAL GROSS LOT SALES

7%

13%

301K 325K

15% 6%

14%

275K 300K

15%

17%

HUME MITCHELL

10% 3%

CARDINIA

10% 3%

HUME MITCHELL

14% 3%

4%

WHITTLESEA 7%

WHITTLESEA 6%

10%

11%

251K 275K

11%

MELTON

MELTON

20%

21%

15%

13%

23%

<250K

61% 0%

10%

Dec Qtr 2018

20%

30%

Dec Qtr 2017

Source: RPM

22

CASEY

CASEY CARDINIA

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

40%

50%

Dec Qtr 2016

60%

70%

WYNDHAM 19% MOORABOOL 3%

WYNDHAM 23% MOORABOOL 2%

GREATER GEELONG

15%

DEC QUARTER 2018

DEC QUARTER 2017

GREATER GEELONG

20%

WESTERN

NORTHERN

GREATER GEELONG

SOUTH EAST

$311,000

$302,000

$355,000

$275,000

% Change from Dec quarter ‘17

6.9%

-2.6%

1.4%

26.2%

$ Change from Dec quarter ‘17

$20,000

-$8,000

$5,000

$57,100

Dec quarter ‘18 median lot size

400.0

398.0

397.0

448.0

% Change from Dec quarter ‘17

0.0%

-5.2%

-11.4%

0.0%

Change from Dec quarter ‘17

0.0

-22.0

-51.0

0.0

Dec quarter ‘18 gross lot sales

1,084

445

517

355

% Change from Dec quarter ‘17

-57.2%

-67.5%

-29.3%

-68.6%

Change from Dec quarter ‘17

-1,448

-924

-214

-777

Dec quarter ‘18 sales contribution

45.1%

18.5%

21.5%

14.8%

Dec quarter ‘18 active estates

71

42

38

28

Dec quarter ‘18 lot releases

1,111

520

497

506

% Change from Dec quarter ‘17

-51.4%

-59.6%

-37.2%

-42.9%

Dec quarter ‘17 sales contribution Change from Dec quarter ‘17

Change from Dec quarter ‘17

43.1% 20 -1,175

27.5% 9

-767

6.4% 8

-294

23.1% 0

-380

Dec quarter ‘18 no. of trading days

128

225

159

173

% Change from Dec quarter ‘17

510.3%

1250.2%

258.8%

435.2%

Change from Dec quarter ‘17

107

208

115

IN DECEMBER QUARTER 2018

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Dec quarter ‘18 median lot price

141

TOTAL LOT SALES DECLINED 58% TO 2,401 LOTS THE MEDIAN LOT PRICE INCREASED BY 1.1% TO $325,000 FROM THE PREVIOUS QUARTER AND 7.5% FROM THE SAME QUARTER A YEAR EARLIER

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

23

WESTERN GROWTH CORRIDOR

THE WESTERN GROWTH CORRIDOR CONTRIBUTED 45% OF TOTAL LOT SALES ACROSS ALL GROWTH Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

CORRIDORS IN DECEMBER QUARTER 2018,

RECORDING 1,084 LOT SALES. THIS DOMINANT

MOORABOOL

SHARE IS DUE TO THE GREATER NUMBER OF

ACTIVE ESTATES AND SUBSEQUENT HIGHER LOT SUPPLY. HOWEVER, COMPARED TO DECEMBER

MELTON

QUARTER 2017, GROSS LOT SALES DECLINED BY 57%, EQUATING TO 1,448 FEWER LOT SALES.

Notably, only the relatively affordable corridors of

Melton and Moorabool achieved an increase in the

median lot price (albeit only 1%) from September to December quarter amongst the Greater Melbourne growth areas. The relatively more expensive

WYNDHAM

Wyndham corridor recorded flat median lot prices.

Lot sales activity in the Western growth corridor

will continue to outperform other regions as higher

lot supply and a greater variety of lot size, price and PORT PHILLIP BAY

location offers a mix of new housing choices for first home buyers and upgraders. Prospects for lot price

growth remain subdued, with median lot prices likely to remain steady.

24

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

the weakest sales result since March quarter 2014.

falling proportion of lot sales occurring in the more expensive suburb of Point Cook. In December

quarter 2018, the median lot price remained static at $331,000 while the median lot size diminished slightly to 402 sqm from the previous quarter.

500

DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

407 406 405

250,000

404 403

200,000

402

150,000

401 400

100,000

399

50,000 0

Median Lot Size

0

Gross Lot Sales

300,000

MEDIAN LOT PRICE �$�

new house demand, rising overhang stock, and a

10

350,000

33 active estates.

has remained resilient in the face of weakening

1,000

15

Active Estates

active estates increasing by 6 over 2018 to a total of

Nevertheless, the median lot price in Wyndham

1,500

20

0

responsible for the contraction in lot sales given

December quarter. This was despite the number of

25

5

Deteriorating new supply was somewhat

new releases declined by 39% annually to 596 lots in

2,000

30

GROSS LOT SALES

lot sales recorded for the same quarter in 2017 and

NUMBER OF ESTATES

corridors. However, this was less than half of gross

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

35

Wyndham recorded 547 lot sales in the December quarter, which was the highest among all growth

2,500

40

MEDIAN LOT SIZE �SQM�

WYNDHAM

398 DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

397

Source: RPM

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

25

to rise during December quarter 2018, increasing

by 5 and a total of 14 over calendar year 2018. Many of these boutique new estates are located in Fraser Rise and Deanside, containing a smaller lot yield

compared to most estates throughout Rockbank

NUMBER OF ESTATES

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

The number of active estates in Melton continued

and Melton South.

Nevertheless, this did not boost lot supply, with new releases declining 56% to 487 lots in December

Melton’s median lot price edged 0.7% higher to $297,000 from the previous quarter. With the

median lot size shrinking to 392sqm, lot prices per sqm also marginally increased.

26

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

MEDIAN LOT PRICE �$�

line with late 2015/early 2016 levels.

1,400

30

1,200

25

1,000

20

800

15

600

10

400

5

200

Active Estates

same quarter in 2017. Consequently, gross sales

quarter to 479 lots. This has brought sales rates in

1,600

35

0

quarter 2018 from the previous quarter and the

fell a commensurate 61% annually in the December

40

DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

0

Gross Lot Sales

350,000

480

300,000

460

250,000

440

200,000

420

150,000

400

100,000

380

50,000

360

0

Median Lot Size

DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MEDIAN LOT SIZE �SQM�

MELTON

GROSS LOT SALES

WESTERN GROWTH CORRIDOR

340

Source: RPM

ROD ANDERSON

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

coming onto market across 3 active estates and 58 lots sold.

The doubling of the First Home Owner’s Grant to

There is now a vacuum of first home buyer demand

growth rate across all Melbourne growth corridors.

100

4

80

3

60

2

40 20 DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

0

Gross Lot Sales

530

250,000

510 200,000

MEDIAN LOT PRICE �$�

the same quarter in 2017. This is the highest annual

120

5

Active Estates

market at any given time.

December quarter 2018, but still 18% higher than for

140

6

0

given the finite number of these purchasers in the

The median lot price remained steady at $226,500 in

160

1

$20,000 for new dwellings in regional Victoria from 1st July 2017 pulled forward demand into 2017/18.

180

7

490 470

150,000

450 430

100,000

410 390

50,000

MEDIAN LOT SIZE �SQM�

(69%) in the December quarter, with just 28 new lots

NUMBER OF ESTATES

both new lot releases (84%) and gross lot sales

200

8

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Moorabool recorded substantial annual falls for

9

GROSS LOT SALES

MOORABOOL

370

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

0

Median Lot Size

DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

350

Source: RPM

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

27

NORTHERN GROWTH CORRIDOR THE NORTHERN GROWTH CORRIDOR RECORDED A LONG TERM LOW OF 445 GROSS LOT SALES FOR THE DECEMBER QUARTER, WHICH WAS A SUBSTANTIAL 67% BELOW SALES VOLUMES ACHIEVED IN THE SAME QUARTER 2017.

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

CONSEQUENTLY, THE PROPORTION OF TOTAL LOT SALES DECREASED FROM 24% TO 19%.

Both Hume and Whittlesea added no new estates

during the quarter, while new lot releases on existing estates also contracted. Total new lot supply levels in both municipalities is similar to the height of the previous downturn in the new housing market in

late 2012/early 2013. Activity has not fallen away as significantly in Mitchell (albeit from a lower base),

with new lot releases and gross lot sales around late 2015/early 2016 levels.

The correction in median lot prices has also been

more apparent within the Northern region compared to other growth corridors. In December quarter 2018, the median lot price was down by 8.6%

in Mitchell, 5.7% in Whittlesea and 3% in Hume compared to the previous quarter.

28

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

HUME Hume is the only growth corridor in Melbourne

25

decreased considerably in the December quarter,

falling by 41% and 70% respectively from the same quarter a year ago. Consequently, the 229 lot sales

recorded in Hume was the lowest total since March

NUMBER OF ESTATES

sentiment, both new lot releases and gross lot sales

prices, with the median lot price falling 6.8% to

800

15

600 10

400

5

quarter 2013.

Receding demand in Hume has led to declining lot

1,000

20

0

Active Estates

200

DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

0

Gross Lot Sales

$326,000 in December quarter 2018 from the peak

400,000

460

350,000

450

median lot size has also diminished by 10.7% over the

300,000

two periods to 400 sqm in December quarter 2018, resulting in per sqm lot prices still improving.

MEDIAN LOT PRICE �$�

of $350,000 in June quarter 2018. However, the

440 430

250,000

420

200,000

410

150,000

400

100,000

390

50,000 0

Median Lot Size

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

estates. Combined with overall weaker buyer

1,200

GROSS LOT SALES

calendar year 2018, dropping by 2 to 15 active

MEDIAN LOT SIZE �SQM�

that experienced a reduction in active estates over

380

DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

370

Source: RPM

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

29

NORTHERN GROWTH CORRIDOR

MITCHELL

8

activity continued to slide, falling by 62% annually to 64 lots – the same volume of sales recorded in

December quarter 2015. New supply was also down

to a significant 12.5% fall in the median lot size to 392sqm.

2

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

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

DEC 15

300,000

0

30

50

350,000

MEDIAN LOT PRICE �$�

previous quarter. However, this was in response

100

3

Active Estates

decreased by $25,000 (or 8.6%) to $265,000 - the

terms across all growth corridors compared to the

4

0

For the quarter Mitchell’s median lot price

largest correction in both absolute and percentage

150

5

1

by 24% from a year ago, with 90 lot releases in the December quarter.

6

GROSS LOT SALES

than half of total active estates. However, sales

200

7

MEDIAN LOT SIZE �SQM�

in active estates to 5, which constituted more

NUMBER OF ESTATES

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

The addition of 2 new estates in Mitchell in

December quarter 2018 lifted the annual increase

250

9

370 DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

350

Source: RPM

PETER GRANT

DIRECTOR, COMMUNITIES

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

WHITTLESEA

demand has collapsed, with 152 recorded lot sales over the quarter hitting a long term low. Sales

volumes were also 62% below the corresponding figure in the same quarter in 2017, which is larger releases in the December quarter.

price over 2018, contracting 6% to $300,000 in

December quarter 2018. This resulted in a similar

decline in the per sqm lot price given the median lot size remained static at 400sqm.

400

8

300

6 4

200

2

100

DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

430

300,000

420

250,000

410

200,000

400

150,000

390

100,000

380

50,000 0

Median Lot Size

0

Gross Lot Sales

350,000

MEDIAN LOT PRICE �$�

experience an annual correction in the median lot

500

10

Active Estates

Further highlighting the slump in demand,

Whittlesea was the only growth corridor to

600

12

0

than the 53% annual fall in new supply to 203 lot

700

14

GROSS LOT SALES

increase in new lot releases and lot sales. Purchaser

800

DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MEDIAN LOT SIZE �SQM�

period 12 months ago did not translate to an

900

18 16

NUMBER OF ESTATES

December quarter 2018 compared to the same

20

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

An increase of 6 active estates in Whittlesea in

370

Source: RPM

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

31

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

WITH DEMAND ABSORBING NEW SUPPLY, RELATIVELY EXPENSIVE LOT PRICES IN THE SOUTH EAST GROWTH CORRIDOR PERSIST.

32

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

SOUTH EAST GROWTH CORRIDOR

ROD ANDERSON

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

THE SOUTH EAST GROWTH CORRIDOR RECORDED 517 LOT SALES IN THE DECEMBER QUARTER, 29% BELOW LOT SALES IN THE PREVIOUS

CORRESPONDING QUARTER. HOWEVER, THE

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

PROPORTION OF TOTAL LOT SALES ACROSS ALL

GROWTH CORRIDORS GREW FROM 13% TO 21% IN THE CURRENT QUARTER.

The decline in sales activity has been less

pronounced in the South East, with gross lot sales in December quarter 2018 decreasing annually by

51 lots in Cardinia and 163 lots in Casey. Moreover, supply and demand are more evenly matched, with lot sales outpacing new lot supply in Cardinia in

December quarter 2018, while new lot supply was only marginally higher in Casey.

With demand absorbing new supply, relatively expensive lot prices in the South East growth corridor persist. At $360,000 in Casey and

$330,000 in Cardinia, the median lot price remained unchanged from the previous quarter, despite

median lot sizes shrinking by 8sqm and 48sqm respectively.

PORT PHILLIP BAY

CARDINIA

CASEY

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

33

SOUTH EAST GROWTH CORRIDOR

35 30

lots. However, gross lot sales were still a considerable 28% lower than in the same quarter in 2017, with new

releases falling by 31% annually to 421 lots in December

and a marginal rise of less than 1% over 2018. The

median lot size diminished by 9% over 2018 to 392sqm, the equal smallest throughout all growth corridors.

MEDIAN LOT PRICE �$�

despite recording no change from the previous quarter

DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

0

Gross Lot Sales

460

350,000

450 440

300,000

430

250,000

420

200,000

410

150,000

400

100,000

390

50,000

Median Lot Size

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

200

400,000

0

34

400

10

Active Estates

At $360,000, Casey’s median lot price remains the

most expensive across all Melbourne growth corridors,

600

15

0

throughout 2018, with the overall total of 29 active since late 2014.

800

20

5

quarter 2018. This masks the increase in active estates

estates in Casey in the current quarter being the highest

1,000

25

GROSS LOT SALES

with sales falling by just 10 lots (or 2.3%) to a total of 416

NUMBER OF ESTATES

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Casey experienced the smallest decline in gross lot

sales in the December quarter from the previous quarter,

1,200

MEDIAN LOT SIZE �SQM�

CASEY

380

DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

370

Source: RPM

LUKE KELLY

DIRECTOR, COMMUNITIES

luke@rpmrealestate.com.au +61 400 688 520

CARDINIA

25

compared to 76 new lot releases. This has further

250 10

Active Estates

400,000

to $330,000. This growth was achieved despite

300,000

MEDIAN LOT PRICE �$�

pricing.

DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

0

Gross Lot Sales

550

350,000

previous quarter and increased by 4.4% annually

same quarter in 2017, resulting in higher per sqm lot

100 50

The median lot price remained static from the

from the previous quarter and 112sqm from the

200 150

0

for sale in Cardinia, and subsequently maintained lot

the median lot size of 400sqm shrinking by 48sqm

300

5

tightened the already low availability of lots available prices at relatively expensive levels.

350 15

GROSS LOT SALES

supply over the quarter, with 101 gross lot sales

400

500

250,000

450

200,000 400

150,000 100,000

350

50,000 0

Median Lot Size

DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MEDIAN LOT SIZE �SQM�

growth corridors, lot absorption outpaced new

NUMBER OF ESTATES

Cardinia in the December quarter. Unlike most

20

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

450

Sizeable annual declines of 57% for new lot releases and 34% for gross lot sales were recorded in

500

300

Source: RPM

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

35

GREATER GEELONG GROWTH CORRIDOR

THE GREATER GEELONG GROWTH CORRIDOR CONTRIBUTED 15% OF TOTAL LOT SALES IN

DECEMBER QUARTER 2018, SOMEWHAT BELOW ITS 20% SHARE IN THE SAME QUARTER 12 MONTHS Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

AGO. THIS WAS IN RESPONSE TO GROSS LOT SALES FALLING 69% TO 355 LOTS.

Notably, sales activity in the second half of 2017 was likely inflated by the doubling of the Regional First

Home Owners Grant to $20,000 for new dwellings.

With a finite number of first home buyers, the ‘pull

forward’ effect of this demand has most likely lost

momentum. However, the 43% annual decline in new lot supply also contributed to the contraction in lot sales.

Affordability concerns are starting to emerge in the Greater Geelong growth corridor. While median lot

price growth from September to December quarter

GREATER GEELONG

2018 was solid at 8% in the sub–market of Geelong, PORT PHILLIP BAY

growth was more marginal in the other 3 sub–

markets of Armstrong Creek, Bellarine, and Lara.

Torquay’s median lot price declined from $435,000 to $414,000.

36

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

However, sales rates were considerably lower

than for the same quarter in 2017, down 61% from 314 lots.

a significant 24%. The region also contains the

500

8

400

6

300

4

200

2

100

0

Consequently, quarterly price growth stalled to

$273,700, although annual price growth was still

10

Active Estates

DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

by 2.3% from the previous quarter.

460 450

MEDIAN LOT PRICE �$�

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

smallest median lot size of 409sqm, which increased

GROSS LOT SALES

within the Greater Geelong growth corridor.

NUMBER OF ESTATES

quarter 2018 was the highest among all regions

600

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Sales of 202 lots in Armstrong Creek in December

12

MEDIAN LOT SIZE �SQM�

ARMSTRONG CREEK

380

DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

370

Source: RPM

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

37

GREATER GEELONG GROWTH CORRIDOR

previous corresponding quarter. However, both

new lot releases and gross lot sales deteriorated by approximately 77% annually to 95 lots and 79 lots respectively.

quarter was the highest within the Greater Geelong

400 350

12

300

10

250

8

200

6

150

4

100

2 0

Nevertheless, a 43% annual increase in the median lot price to $268,500 recorded in the current

450

14

Active Estates

50

DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

550 530

455sqm.

MEDIAN LOT PRICE �$�

250,000

The median lot size diminished over the year to

510 490

200,000

470

150,000

450 430

100,000

410 390

50,000 0

Median Lot Size

38

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

0

Gross Lot Sales

300,000

growth corridor.

GROSS LOT SALES

of active estates in December quarter 2018 as the

NUMBER OF ESTATES

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Bellarine Peninsula contained the same number

16

MEDIAN LOT SIZE �SQM�

BELLARINE PENINSULA

370 DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

350

Source: RPM

ROD ANDERSON

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

9

27 lots in the current quarter.

4

60

3

40

2

20

0

quarter and 26% from the same quarter in 2017,

the median lot size was 40sqm smaller over 2018 to

80

5

1

Lot price growth increased 8% from the previous lifting the median lot value to $335,000. Conversely,

100

6

DEC 15 Active Estates

MEDIAN LOT PRICE �$�

578sqm.

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

0

Gross Lot Sales

400,000

750

350,000

700

300,000

650

250,000

600

200,000

550

150,000

500

100,000

450

50,000

400

0 DEC 15 Median Lot Size

GROSS LOT SALES

activity, with gross sales down 77% annually to just

NUMBER OF ESTATES

quarter 2018 to 93 lots. This did not boost sales

120

7

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Active estates in Geelong decreased by 2 over 2018, however new supply edged higher in December

140

8

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MEDIAN LOT SIZE �SQM�

GEELONG

350

Source: RPM

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

39

GREATER GEELONG GROWTH CORRIDOR

supply also halving over the year to 22 lots.

With the median lot price edging only marginally

0

contained the most affordable median lot price

448sqm, the median lot size remained unchanged.

60 2

40

1

higher from the previous quarter to $264,250, Lara among Greater Geelong’s growth corridors. At

80

3

Active Estates

20

DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

550 530

MEDIAN LOT PRICE �$�

250,000

510 490

200,000

470

150,000

450 430

100,000

410 390

50,000

Median Lot Size

40

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

0

Gross Lot Sales

300,000

0

GROSS LOT SALES

represented an annual decline of 54%, with new

100

4

NUMBER OF ESTATES

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Lot volumes in Lara were the lowest in 2.5 years, with 36 lot sales for the December quarter. This

120

5

MEDIAN LOT SIZE �SQM�

LARA

370 DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

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.

Torquay’s median lot price of $414,000 remains the

120 100

3

80 2

60 40

1

20

most expensive, despite falling by 4.8% from the

0

previous quarter.

Active Estates

DEC 15

MAR 16

New Estates

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

Gross Lot Sales

600

500,000 450,000

500

MEDIAN LOT PRICE �$�

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

DEC 15

MAR 16 Median Lot Price

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

MEDIAN LOT SIZE �SQM�

quarterly and annual changes to both the median lot

NUMBER OF ESTATES

just 11 lots during the December quarter. Hence,

140

4

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Sales activity in Torquay remained negligible at

160

GROSS LOT SALES

TORQUAY

0

Source: RPM

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

41

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

OUTLOOK

We expect the land market to remain

While the lending crackdown has impacted both

conditions improve to bring back buyer

final report of the Royal Commission provides

subdued for another 6 months before market confidence and drive an uptick in sales

volumes towards the second half of the year.

Developers have started to modify prices

capacity to borrow and buyer sentiment, the

no directive for banks to further tighten lending practices. Hence buyers will adjust their

expectations in the new lending climate.

through value add incentives and subtle price reductions which will continue over the next 2 quarters to boost sales rates.

The impact of the resale or speculator

market on developers’ lot sales should start to ‘washout’ by the end of the year given we

believe speculators stopped purchasing land

in the first half of 2018 when prices started to moderate and will have to on-sell by around September this year.

42

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

OVERALL, UNDERLYING DEMAND REMAINS RELATIVELY STRONG, PARTICULARLY AMONG FIRST HOME BUYERS. NEW PSPS IN THE NORTH AND SOUTH EAST GROWTH CORRIDORS COMPRISING AFFORDABLE CHOICE IN LOT SIZE AND PRODUCT WILL ALSO UNDERPIN STRONG SALES RATES, ESPECIALLY AMONG NEWER DEVELOPERS OFFERING COMPETITIVE PRICE POINTS.

Wallan $230k

Sunbury

Diggers Rest

$294k

$302k

Kurunjang Bacchus Marsh

$217k

Harkness $260k

Thornhill Park

Strathtulloh $267k

Frasers Rise

$315k

Deanside $364k

Rockbank $317k

Tarneit Manor

Wyndham

$321k

Craigieburn $378k

Donnybrook $295k

Wollert $344k

$348k

Aintree

$307k

$410k

Kalkallo

$335k

WHAT DOES A 400 SQM LOT COST?

3 months to December 2018

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Weir Views Melton South $264k $236k

$345k

$337k

Greenvale

Bonnie Brook

$250k

Mickleham

Truganina $365k

Vale

Lakes

$305k

$288k

Mambourin $279k

Point Cook Werribee

Lara

$489k

$320k

Berwick

$259k

Armstrong Creek

$275k

$428k

Cranbourne South

$355k

Pakenham $310k

Clyde North Botanic Ridge

$353k

$360k

Clyde

$345k

43

FEATURE STORY:

MELBOURNE AND GEELONG’S RESALE LAND MARKET: AN ANALYSIS THERE’S BEEN CONSIDERABLE DISCUSSION

To accurately determine the number of single resale

From an LGA perspective, Wyndham recorded the

LAND MARKET AND THE IMPACT ON DEVELOPER

corridors, RPM conducted an in-depth analysis over

735 lots, followed by Hume with 20% or 480 lots.

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

AROUND THE CREATION OF A SECONDARY SALES RATES.

While many resales are genuine investors or owner occupiers who are unable to settle due largely to

tight credit conditions, some are speculators who sought to cash in on the significant price growth

over the last few years and are now attempting to

one week in mid-December last year. The analysis

involved an extensive search on realestate.com.au, excluding all developer listings or associated sales

and marketing agency, in essence capturing all single vacant lots being marketed for sale by local real estate agencies.

on-sell their lot.

The analysis revealed 2,415 lots were classified as

Tighter lending practices along with nomination

these lots, 42% were located in the Western growth

clauses in developer contracts specifying only

immediate family members as an alternative buyer has made it even harder for speculators to offload their lots.

44

lots through Melbourne and Geelong’s growth

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

resales across Melbourne and Greater Geelong. Of corridor and 34% in the Northern corridor.

The higher priced and tightly held South Eastern

corridor comprised 18% while Geelong and the Surf Coast recorded 6%.

largest share of resales on the market, with 30% or The smaller growth corridors of Mitchell, Cardinia

and Moorabool recorded a combined 5% of the total or 114 lots.

If the estimated 2,415 resale lots were sold over

the next 6 months, this would equate to a further

400 or so lots sold on a monthly basis through to

June. If, at the same time, the retail market records an average of 1,250 sales per month extrapolated out to the historical long term average of 15,000 annual lot sales, the combined total would be

around 17,500 lots over calendar year 2019. In

essence this reflects a relatively robust market,

and a 6% increase from the 16,400 lots sold over calendar 2018.

800

600

480

500 400

392 287

300

257

200

150

100 0

WYNDHAM

HUME

CASEY

WHITTLESEA

MELTON

GREATER GEELONG

52

47

MITCHELL

CARDINIA

■ WYNDHAM 30% ■ HUME 20% ■ CASEY 16% ■ WHITTLESEA 12%

15 MOORABOOL

WHILE MANY RESALES ARE GENUINE INVESTORS OR OWNER OCCUPIERS WHO ARE UNABLE TO SETTLE DUE LARGELY TO TIGHT CREDIT CONDITIONS, SOME ARE SPECULATORS WHO SOUGHT TO CASH IN ON THE SIGNIFICANT PRICE GROWTH OVER THE LAST FEW YEARS AND ARE NOW ATTEMPTING TO ON-SELL THEIR LOT.

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

COUNT OF LOTS

700

RESALE LOTS BY LGA

735

■ MELTON 11% ■ GREATER GEELONG 6% ■ MITCHELL 2% ■ CARDINIA 2% ■ MOORABOOL 1%

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

45

MELBOURNE AND GEELONG’S RESALE LAND MARKET: AN ANALYSIS

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

TOTAL STOCK ON THE MARKET (END OF DEC 2018) Further insights can be gleaned when combined

On an LGA basis, Wyndham recorded the highest

On a per corridor basis, the Western region

monthly basis.

1,142 lots. Not surprisingly, the smaller markets of

market, followed by the Northern corridor with 29%

with the current retail market that RPM tracks on a

count, with 1,459 lots followed by Casey with

Mitchell, Cardinia and Moorabool had the lowest level of lots available.

At the end of December 2018 after month end sales,

RPM recorded 4,196 lots of retail stock remaining on

recorded 2,528 lots or 38% of total stock on the

(1,918 lots) and the South East with 20% (1,341 lots).

Greater Geelong accounted for 15% or 824 lots on the market.

the market. Combined with resale lots, an estimated 6,611 lots were available for purchase.

1400

1459 1142

1200 1000

983

930

800

824

600

756

400

232

200 0

46

TOTAL STOCK ON MARKET AT END OF DEC QTR 2018

WYNDHAM

CASEY

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

MELTON

HUME

GREATER GEELONG

WHITTLESEA

MITCHELL

199 CARDINIA

86 MOORABOOL

TOTAL STOCK BY CORRIDOR

COUNT OF TOTAL STOCK

1600

■ WESTERN CORRIDOR 38% ■ NORTHERN CORRIDOR

29%

■ SOUTH EAST CORRIDOR 20% ■ GREATER GEELONG 13%

PROPORTION OF RESALES TO TOTAL STOCK Wyndham also recorded an even share of stock with

The conventional view is that resale stock usually

the market within each LGA.

other end of the spectrum, Moorabool only consists

market. However, our analysis paints a very different

resale lots contribute to the overall level of stock on

50% of the overhang attributed to resale lots. At the

undercuts retail stock, creating a two-tier pricing

of 15% overhang stock being resales. Overall, across

picture whereby retail stock is selling at a discount to

Metropolitan Melbourne, 39% of overhang stock

This will largely be dictated by how retail overhang

resale stock. This is due to developers increasingly

comprise resale lots.

stock will perform over the near term. For instance, in Hume, of the total stock on the market, 52% are

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

An interesting consideration is what proportion of

producing smaller lots throughout their estates, subsequently with lower price points to address

significant affordability concerns in recent years.

considered resale lots, meaning there is very much a secondary market open to buyers.

% SHARE OF RESALES TO TOTAL STOCK BY LGA 60% 50%

52%

50% 39%

40%

38%

30%

34% 26%

20%

24%

22%

CARDINIA

MITCHELL

18%

17%

GREATER GEELONG

MOORABOOL

10% 0

HUME

WYNDHAM

TOTAL MELBOURNE

WHITTLESEA

CASEY

MELTON

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

47

MELBOURNE AND GEELONG’S RESALE LAND MARKET: AN ANALYSIS

AVERAGE PRICE COMPARISON

AVERAGE PRICE COMPARISON

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

The average lot price of retail stock on Melbourne’s land

450,000

market at the end of December 2018 was $342,732. The discount – or $21,349 – for retail stock.

Interestingly, the December sales result recorded an

average lot price of $320,274 – discounted further still –

AVERAGE PRICE �$�

average resale price was $364,081, representing a 6%

400,000 350,000 300,000 250,000 200,000 150,000 50,000

but it’s important to note that price is largely dictated by

0

lot size (detailed further below).

CASEY

With a $45,063 (13%) price premium, Cardinia is the only price given the average lot size is 82 sqm bigger than an

Whittlesea recorded the largest variation at $38,129 and $38,028 respectively—reflecting a retail price

discount of 11%. Smaller price variations were seen in

Mitchell with less than 1% difference at $1,412, followed

by Melton and Hume at $2,142 and $3,272 respectively.

48

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

WHITTLESEA

MITCHELL

MELTON

MOORABOOL

WYNDHAM

TOTAL MELBOURNE

GREATER GEELONG

13%

15

PERCENTAGE DIFFERENCE �%�

Greater Geelong (including the Surf Coast) and

HUME

Current market average price

PRICE COMPARISON OF RETAIL STOCK COMPARED TO RESALE STOCK

LGA where retail stock sits above the average resale average 555sqm for resale stock.

CARDINIA

Resale stock average price

10 5 0 �5

-1%

-5%

-6%

�10 �15

0%

-1%

-11% CASEY

CARDINIA

HUME

WHITTLESEA

MITCHELL

MELTON

MOORABOOL

-7%

WYNDHAM

-6% -11% TOTAL MELBOURNE

GREATER GEELONG

AVERAGE SIZE COMPARISON

AVERAGE SIZE COMPARISON

The growing trend of smaller lots with lower price

resale and retail stock regarding lot size.

Across Melbourne’s growth corridors, the current

average lot size for retail stock is 434sqm while the

600

AVERAGE SIZE �SQM�

affordability explains the stark difference between

500 400 300 200 100

average resale size sits at 467sqm –33sqm or 7%

0

bigger than retail lots. These resale lots could date

CASEY

the movement towards smaller lot sizes.

Moorabool Shire recorded the largest variance,

with resale stock averaging 551sqm – a significant

121sqm more than retail lots currently on the market.

The average resale block in Mitchell is also 78sqm

larger than the average 462 sqm retail lots. For the

remaining LGAs, retail stock was between 17sqm and 74sqm (4% and 14%) smaller than resale stock.

HUME

WHITTLESEA

MITCHELL

MELTON

MOORABOOL

WYNDHAM

TOTAL MELBOURNE

Current market average size (stock)

GREATER GEELONG

LOT SIZE COMPARISON OF RETAIL STOCK COMPARED TO RESALE STOCK 20

PERCENTAGE DIFFERENCE �%�

smaller average retail lot sizes than resale stock.

CARDINIA

Resale stock average size

back to early 2017 which highlights in general terms

Besides Cardinia, all the other corridors recorded

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

points populating new housing estates to combat

700

15%

15 10 5 0 �5 �10

-4%

-6%

-10%

�15

-11%

�20 �25

CASEY

CARDINIA

HUME

WHITTLESEA

-14%

-14%

MITCHELL

MELTON

-7%

-9%

-22% MOORABOOL

WYNDHAM

TOTAL MELBOURNE

GREATER GEELONG

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

49

MELBOURNE AND GEELONG’S RESALE LAND MARKET: AN ANALYSIS

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

In general, while resale lots averaged a higher price

than retail stock at the end of December 2018, overall lot sizes were smaller. Subsequently from a sqm rate,

greater value is realised in retail stock in all but 3 LGAs as illustrated in the following charts.

At a total Melbourne level, the sqm rate for retail land lots is $790 - up $11 or 1% from resale stock. LGAs

AVERAGE LOT PER SQM RATE

AVERAGE LOT PRICE PER�SQM �$�

AVERAGE SQM RATE

comprising a lower sqm rate for retail stock include

900 800 700 600 500 400 300 200 100 0

CASEY

CARDINIA

Wyndham, which recorded a discount of $31 or -4% at $814sqm, Greater Geelong (-$16 or -3% at $611sqm) and Cardinia (-$12 or -2% at $629sqm). Conversely,

was $104 or 15% above resale value. Also recording

substantial sqm rate premiums were Moorabool (+$90 or 21%), Mitchell (+$85 or 15%) and Hume (+$77 or 11%).

MELTON

15%

15

0

WYNDHAM

TOTAL MELBOURNE

GREATER GEELONG

15%

11%

10 5

MOORABOOL

21%

2%

1%

1%

-2% CASEY

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

MITCHELL

20

�5

50

WHITTLESEA

Current market average cost per sqm

COMPARISON OF RETAIL STOCK COMPARED TO RESALE STOCK

25

PERCENTAGE DIFFERENCE �%�

Melton recorded a retail sqm rate of $779 which

HUME

Resale stock average cost per sqm

CARDINIA

HUME

WHITTLESEA

MITCHELL

MELTON

MOORABOOL

-4%

WYNDHAM

-3% TOTAL MELBOURNE

GREATER GEELONG

KEY TAKEOUTS That said, the average price of retail stock overhang

land price boom over the last few years. The

for sold lots and is on the market longer (an average

secondary land market as a result of the extended additional resale lots, when combined with retail lots, points to a relatively normalised market or

slightly above the long term historical average of approximately 15,000 lot sales per annum.

Hence it means more choice in more estates for

buyers â&#x20AC;&#x201C; if they can get a home loan given tighter

across Melbourne largely sits above the average

of 5.6 months) given itâ&#x20AC;&#x2122;s more expensive than the monthly stock sold.

OUR ANALYSIS QUANTIFIES THE PROMINENCE OF A SECONDARY LAND MARKET AS A RESULT OF THE EXTENDED LAND PRICE BOOM OVER THE LAST FEW YEARS.

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Our analysis quantifies the prominence of a

credit conditions. In addition, despite the impact on developer sales rates given increased competition, the stock that is selling is achieving higher per

square metre rates given retail lot sizes are smaller.

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

51

MELBOURNE AND GEELONGâ&#x20AC;&#x2122;S RESALE LAND MARKET: AN ANALYSIS

LGA

COUNT OF RESALES

CURRENT MARKET STOCK OVERHANG

TOTAL LOTS ON MARKET (RESALE+RETAIL)

392

750

1142

47

152

199

Hume

480

450

930

Whittlesea

287

469

756

Mitchell

52

180

232

Melton

257

726

983

Moorabool

15

71

86

Wyndham

735

724

1459

Greater Geelong

150

674

824

Total Melbourne

2265

3522

5787

Melbourne & Greater Geelong

2415

4196

6611

Casey

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

Cardinia

LGA

52

RESALES AVE PRICE

CURRENT MARKET AVE PRICE (STOCK)

Casey

$387,556

$369,462

Cardinia

$355,790

$400,853

Hume

$358,163

$354,891

Whittlesea

$360,724

$322,696

Mitchell

$295,012

$293,600

Melton

$326,192

$324,050

Moorabool

$239,364

$225,564

Wyndham

$378,175

$350,520

Greater Geelong

$349,838

$311,709

Total Melbourne

$364,081

$342,732

Melbourne & Greater Geelong

$363,151

$337,672

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

LGA

CURRENT MARKET AVE SIZE (STOCK)

Casey

460

432

Cardinia

555

637

Hume

499

446

Whittlesea

431

383

Mitchell

536

462

Melton

483

416

Moorabool

551

431

Wyndham

448

431

Greater Geelong

558

510

Total Melbourne

467

434

Melbourne & Greater Geelong

473

446

RESALES AVE COST/SQM

CURRENT MARKET AVE COST/SQM (STOCK)

Casey

$842

$855

Cardinia

$641

$629

Hume

$718

$795

Whittlesea

$837

$843

Mitchell

$550

$635

Melton

$675

$779

Moorabool

$434

$524

Wyndham

$845

$814

Greater Geelong

$627

$611

Total Melbourne

$779

$790

Melbourne & Greater Geelong

$768

$757

LGA

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

AVE TOTAL RESALE SIZE

53

REALISING FAST-TRACKED PSPS IN MARCH 2017, THE VICTORIAN GOVERNMENT

Therefore, the recently announced approvals of

ACROSS 17 RESIDENTIAL PRECINCT STRUCTURE

McPherson) in the South East along with the PSPs

ANNOUNCED A PLAN TO REZONE 100,000 LOTS

PLANS (PSPS) BY THE END OF 2018. EVEN THOUGH ONLY 7 OF THESE PSPS MET THE DEADLINE, IT

WAS ANNOUNCED IN JANUARY THAT 5 MORE HAVE BEEN APPROVED AND ARE WAITING TO Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

BE GAZETTED.

The PSPs completed earlier in the Western growth

corridor (Mt Atkinson, Plumpton, Tarneit Plains and

The PSPs of Lancefield and Cardinia Creek South

welcome relief for first home buyers and budget-

developers – the best of the 5 PSPs. This is critically

Central in the Northern corridor should provide conscious buyers.

ADDITIONAL STOCK OF THE MOST RECENTLY APPROVED PSPS

While the approval of new PSPs is a positive for

demand pressures and subsequent price growth.

it is important to understand what portion of land

However, this was short lived due to the significant level of pent up demand that was created in the

preceding years – particularly through Plumpton and Wollert.

Although current market conditions point to a lack of underlying demand, this is not the case. The

market slowdown is largely a result of a tightening in prudential policy. The recent relaxation of

are currently held by developers*.

of Lancefield Road, Sunbury South and Beveridge

Koroit), along with Donnybrook, Woodstock and

Wollert PSPs in the Northern corridor, alleviated

potential buyers looking to build their dream home, within these PSPs is developer held and what is

not. If a parcel of land is developer owned, it can

be brought to market as a subdivision land estate

immediately as opposed to a parcel of land which is

approved for subdivision but is privately owned. This private owner might have no intention of selling to a developer or even to develop it themselves, as the

land might be operating as a business or being kept

have over two-thirds of all lots currently being held by important for the land-starved South East, with the Casey corridor recording a median of $360,000 in December quarter 2018. Similarly, Hume and

Whittlesea corridors have seen robust price growth over the past 18 months. As a result, first home

buyers require alternatives such as Sunbury’s newly

approved PSPs. With an estimated 18,300 developer

held lots, significant supply to buyers in the Northern corridor will become available through these PSPs. This should take the pressure off estates along

Donnybrook Road and the more established areas of Craigieburn and Greenvale.

Despite the current downturn, having available supply to match demand when the market recovers is vital.

as inheritance, for example.

The current situation plays out well for first home

investor loan growth is a step in the right direction

As a consequence, it is important to look beneath

the December quarter (up a marginal 1%), along

increase in Victoria’s population over the 12 months

for. The map overleaf illustrates this. When the 5

restrictions on interest-only lending and a cap on and may assist to satisfy the 138,159 person

to June 2018 (of which 98,459 people came from overseas or interstate).

54

Minta Farm and Cardinia Creek South (formerly

of this amount, 20,417 lots or 42% of all potential lots

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

the headline number of what each PSP can cater

recently approved PSPs are combined at current

yields, a total of 34,920 lots are achieved. However,

buyers. With the land price overall pausing during with significant land coming online in the first half

of calendar 2019, first home buyers should be in a

more favorable position in terms of price and choice that they haven’t been in for some years.

*The determination of whether or not a parcel of land is developer or privately owned is determined by ongoing title searches. RPM’s best efforts are made to be accurate with the classification, however at times when a title is run the parcel of land could be going through an off market sale.

MELBOURNE’S NEW SUBURBS - RECENTLY APPROVED PSP’S

Beveridge North West

Donnybrook/ Woodstock

Beveridge Central

VPA Status Completed Nov 2017

VPA Status Approved

Shenstone Park

Developer Held - 5,737 Lots (76%) Privately Held - 1,792 Lots (24%) Total - 7,527 Lots

VPA Status Council Led

VPA Status Approved

Sunbury South

Developer Held - 5,893 Lots (55%) Privately Held - 4,908 Lots (45%) Total - 10,801 Lots

VPA Status Approved

Lindum Vale VPA Status Submitted for Appoval

Wollert

VPA Status Completed Feb 2017

Pre-Planning

Council and Stage agency consultation

PSP Commenced

Community engagement and exhibition

Public Consultation

- Review of submissions - Planning panel - Structure plan finalisation - Submitted for approval

Post Consultation

- Approved - Completed

Approved & Completed

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

VPA Status Completed Feb 2018

Draft structure plan preparation

Developer Held - 846 Lots (23%) Privately Held - 2,790 Lots (77%) Total - 3,857 Lots

Lancefield Road

Plumpton

PSP PLANNING PROCESS

VPA Status Council & State Agency Consult

■ Approved ■ Completed ■ Non Approved

Kororoit

VPA Status Completed Feb 2018

Mt Atkinson VPA Status Completed Sep 2017

Mt Atkinson VPA Status Completed Sep 2017

DEVELOPER HELD 20,417 LOTS (58%)

PRIVATELY HELD

14,503 LOTS (42%)

COMBINED TOTAL 34,920 LOTS

Quandong VPA Status Review of Submission

Minta Farm

Developer Held - 1,300 Lots (46%) Privately Held - 1,150 Lots (54%) Total - 2,850 Lots

VPA Status Approved

Source: VPA

Cardinia Creek South

Pakenham East (Deep Creek) VPA Status Submitted for Approval

Developer Held - 6,597 Lots (66%) Privately Held - 3,414 Lots (34%) Total - 10,011 Lots

VPA Status Approved

55

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

COMMUNITIES BUYER SURVEY DATA

purchases increased to 23% - up from 16% the

THE GROWING DESIRE TO BUILD A SINGLE STOREY HOME PROVIDES FURTHER EVIDENCE OF AN INCREASING SHARE OF DOWNSIZERS CHOOSING A SINGLE STOREY DWELLING FOR PRACTICAL REASONS.

14% in the December quarter 2018. This is due

In addition, 72% of surveyed buyers in the

The size of homes buyers are intending to build

and if they do require funding they usually have

intending on building a single storey home. This

of 25sqs or smaller in December quarter 2018

RESTRICTIVE LENDING PRACTICES INTRODUCED

The increase in downsizers is further supported

INVESTORS BUT ALSO OWNER OCCUPIERS

themselves as couple households, with 39%

BY BANKS IN 2018 HAVE NOT ONLY IMPACTED – PARTICULARLY FIRST HOME BUYERS AND, TO A LESSER EXTENT, UPGRADERS. OVER THE DECEMBER QUARTER 2018, BUYERS

BETWEEN THE AGES OF 18-34 (LARGELY FIRST HOME BUYERS) MADE UP 54% OF ALL OWNER

OCCUPIER PURCHASES – DOWN FROM 60% IN THE SAME PERIOD A YEAR EARLIER.

With first home buyers retracting, downsizers

(usually within the 50-59 age cohort) have doubled their share from 7% in December quarter 2017 to to downsizers being less reliant on bank finance, substantial equity to assist in securing a smaller loan amount.

56

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

by the growing share of buyers identifying

recorded in December quarter 2018 – up from 29% in the same quarter a year earlier. This is likely

underpinned by children who have left home, and hence the desire for a smaller home.

Another driver is the increasing share of house and land purchases as opposed to land only.

Over the December quarter 2018, house and land same quarter a year earlier.

December quarter 2018 indicated they were

is up from 58% in the December quarter 2017 and

can be attributed to a fall in double storey houses.

also decreased, with 63% indicating a dwelling

compared to 57% for the previous corresponding period.

December 2017

December 2018 4%

60>

COMBINED AGE

35-49

7% 30%

35-49

14% 31%

18-24

8%

18-24

7%

52%

25-34

1%

Group

Couple

PURCHASE TYPE

Undecided

SIZE OF HOME PLANNING TO BUILD Source: RPM

77%

House and land

Land only

House and land

Land only

19%

16%

16-20sq <15sq

49%

Family

23%

30sq>

21-25sq

11% 39%

Couple

84%

Single

26-30sq

1%

Group

Single

16%

23% 58%

Double

NUMBER OF STOREYS TO CONSIDER

55%

Family

47%

25-34

27% 34% 19% 4%

Undecided

12%

Single

16% 72%

30sq>

13%

Double

26-30sq

21-25sq

16-20sq <15sq

Q 4 MCAORMK M EU T NOI V TE I ER SV I E W

15% 29%

Single

HOUSEHOLD TYPE

2%

60>

50-59

50-59

24% 39% 21% 3%

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

57

OVERVIEW

THE KEY DRIVERS UNDERSCORING THE SLOWDOWN IN THE APARTMENT AND TOWNHOUSE MARKET

APARTMENTS / TOWNHOUSES

CONTINUES TO BE REGULATORY-DRIVEN CREDIT

RESTRICTIONS FOR BOTH INVESTORS AND OWNER OCCUPIERS, WHICH, TOGETHER WITH FALLING

PRICES, HAS ADVERSELY IMPACTED PURCHASER FINANCING TO COMPLETE OFF-THE-PLAN ACQUISITIONS.

Foreign purchasers, who are key to getting

apartment developments off the ground, have been

disincentivised by increased stamp duty surcharges.

Local investors have also been adversely affected with the removal of stamp duty concessions.

The uncertainty is not just limited to potential buyers but also among credit teams who are nervous about approving loan applications in a tighter lending environment. Mark Bouris, Chairman of wealth

management company Yellow Brick Road, reinforced this view recently when he commented that 40% of loan applications were being rejected â&#x20AC;&#x201C; higher than during the GFC. 58

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

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

15%

12 mths to Dec-14

19%

12 mths to Dec-15

6%

12 mths to Dec-16

23%

12 mths to Dec-17

6%

12 mths to Dec-18

26,000

APARTMENT APPROVALS

24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000

DEVELOPERS KEEN TO COMPLETE THEIR PROJECTS SOONER TO MITIGATE POTENTIALLY WORSENING CONDITIONS ARE ALSO FINDING IT INCREASINGLY DIFFICULT TO OBTAIN FINANCE. IN ADDITION, FALLING PRICES MAY ALSO LEAD TO DELAYS IN LAUNCHING NEW PROJECTS WHICH WILL AFFECT DWELLING NUMBERS IN A FEW YEARSâ&#x20AC;&#x2122; TIME.

A P AQR4T M EA NR TK SE T/ O TO VW E RN VH IOE UWS E S

TOWNHOUSE APPROVALS

+61 400 688 520

8,000 6,000 4,000 2,000 0

35%

12 mths to Dec-14

21%

12 mths to Dec-15

15%

12 mths to Dec-16

2%

12 mths to Dec-17

20%

12 mths to Dec-18

Source: ABS

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

59

A P AQR4T M EA NR TK SE T/ O TO VW E RN VH IOE UWS E S

OVERVIEW

What is also striking about the current downturn

AFTER SHOWING ROBUST ACTIVITY IN THE

Despite townhouses approvals picking up 5.6%

it is still well above long term average trends. This

OTHER DWELLINGS HAVE FINALLY SUCCUMBED

quarter, approvals in apartments fell 19.3%.

is while the economy has come off its recent high, underscores the fact that the fall in new housing

activity and price is a direct result of tighter lending practices.

Over the course of 2018, the apartment market

has been impacted the most from easing prices— particularly for larger developments that have

longer timescales which magnifies the risks of settlement issues at completion stage.

The townhouse market, which is far less reliant on investors, also declined over the course of 2018

as both owner occupiers and small and mid-sized developers were squeezed by tighter access to

credit. Nevertheless, the slight fall in townhouse

approvals comes after 3 significant years of growth.

60

OTHER DWELLING APPROVALS

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

FACE OF SIGNIFICANT HEADWINDS, TOTAL

TO CURRENT MARKET CONDITIONS. OTHER

over the December quarter from the previous

DWELLING APPROVALS (APARTMENTS AND

More significant are the results when compared

2018 WERE DOWN 7.6% TO RECORD 5,831

shows townhouse approvals falling 15.8%

TOWNHOUSES) OVER DECEMBER QUARTER

APPROVALS FROM THE PREVIOUS QUARTER –

THE LOWEST LEVEL SINCE JUNE QUARTER 2017.

More stark was the comparison to the same

period a year ago which reveals a 55% fall in

approvals. This highlights the different stage of

the property cycle the market is in compared to

the peak in December 2017. Across the previous

to the same quarter a year earlier, which

and apartments falling by a staggering 71.2%.

While approval numbers tend to be lumpy from quarter to quarter, conclusions can be drawn

when comparing 12 month rolling figures. In this

instance, townhouses reflect a 5.5% reduction to

12,551 approvals, while apartments have fallen by 20.3% to 15,634 approvals.

12 months the market has fallen by 14.3% to

The significant fall in apartment approvals over

reduction coming in the back half of calendar

the numbers held up far longer than many

record 28,185 other dwellings, with much of this 2018. This result is in line with the 12 months to December 2013.

the past year is not overly surprising. If anything commentators expected, which supports the state’s sound economic fundamentals.

KEY MEDIUM DENSITY BUILDING DATA

Dec qtr 2018

change from previous qtr

TOTAL TOWNHOUSES 3,134

-19.3%

12,551

15,634

-15.8%

% change 12 months earlier COMMENCEMENTS Sep qtr 2018

change from previous qtr change from previous yr

12 months to Sep qtr 2018

% change 12 months earlier TOTAL APARTMENT & UNIT PRICES

TOTAL 5,831

-7.6%

-71.2%

-55.4%

-5.5%

-20.3%

-14.3%

OTHER DWELLINGS

COMPLETIONS

OTHER DWELLINGS

6,239

Sep qtr 2018

6,493

28,185

-29%

change from previous qtr

-22%

34,922

-28%

change from previous yr

-21%

13.4%

12 months to Sep qtr 2018

% change 12 months earlier

27,325

MEDIAN PRICE

CHANGE FROM QTR

CHANGE FROM PREV. YR

Dec qtr 2018

$589,000

Dec qtr 2017

$593,000

Sep qtr 2018

2,697

5.6%

change from previous yr

12 months to Dec qtr 2018

TOTAL APARTMENTS

$599,000

1.7%

A P AQR4T M EA NR TK SE T/ O TO VW E RN VH IOE UWS E S

APPROVALS

-20%

0.7%

Source: ABS, REIV

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

61

MEDIUM DENSITY PIPELINE ACTIVITY DESPITE CURRENT WEAKER BUYER SENTIMENT, DEVELOPER PIPELINE ACTIVITY FOR BOTH

APARTMENTS AND TOWNHOUSES REMAIN A P AQR4T M EA NR TK SE T/ O TO VW E RN VH IOE UWS E S

purchasers, particularly in the pre-sales stage.

The apartment pipeline follows a similar path, with 1,096 projects or 67% of the total pipeline in the

planned or approval stages. When combined, these

SURPRISINGLY STRONG AS INDICATED BY THE

This buyer group was the ‘missing ingredient’

PLANNING AND APPROVAL STAGES.

announced the removal of interest only lending

These numbers are substantial, particularly given

of the 10% loan growth rate from banks to investors

quarters.

NUMBER OF PROJECTS IDENTIFIED IN THE

Buoyant activity in the apartment pipeline is a

positive sign among developers that strong demand in recent years will continue to absorb recently

throughout 2018. In response, earlier this year APRA restrictions on the banks, which follows the removal early last year.

created additional supply and more so, the stock

These actions point to APRA’s concern about the

approvals had fallen over in the 2 years through

prices. However, banks have been well under the cap

that is in the pipeline. It should be noted that

to the end of calendar 2017 after hitting a peak in 2015. The market paused during this period from an approval perspective and allowed approved

developments to translate into stock, which is now

ongoing moderation in apartment activity and

for some time, which suggests other factors are in

play including stamp duty charges and falling buyer confidence.

being absorbed. This pause also enabled the market

Taking a snapshot at the end of December 2018,

suggest it will be the same through 2019.

77% of the total pipeline in the planned or approval

to avoid an oversupply in 2018 and all the indicators

While local and overseas investor activity has

slowed, first home buyers along with downsizers

seemed to have underpinned demand levels to avoid any major price reduction. Nevertheless, apartment sales are largely to investors (both local and 62

overseas) – with developers heavily reliant on these

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

the townhouse pipeline reflects 3,666 projects* or stage. If all of these projects come online under current plans, the market will realise more than

22,900 dwellings. This level of activity would then

join a further 1,123 projects planned to yield 9,202 dwellings that have already commenced.

projects could yield 77,931 apartments.

the easing in apartment price growth in recent

It is worth noting that a project in the pipeline

(particularly in the earlier stages) could always be shelved if developers believe buyer appetite and profit margins will be weak. Anecdotally this has

already occurred. Overall, the market self-regulates to prevent an oversupply.

Even so, as the approval numbers show, the

development sector remains positive over the near term, supported by developers and Government

working closely together to open-up development in Melbourne’s middle ring.

*Note: Additional information has been sourced in this quarter as opposed to previous quarters to clarify developments that were

previously excluded as the type of dwelling was not specified. A large percentage of these now fall into townhouses which means there is a substantial increase in the December result compared to the September quarter.

LUKE KELLY

DIRECTOR, PROJECT MARKETING luke@rpmrealestate.com.au

APARTMENT PIPELINE

TOWNHOUSE PIPELINE - DEC 2018 Stage

Count of Developments

% of total

Count of Townhouses

% of total

Location

Count of Developments

% of total

Count of Units

% of total

Planning

1,634

34%

10,061

31%

Inner Ring

33

1%

294

1%

Approved

2,032

42%

12,910

40%

Middle Ring

3,194

63%

18,944

56%

Commenced

1,123

23%

9,202

29%

Outer Ring

1,813

36%

14,369

43%

Total

4,789

100%

32,173

100%

Total

5,040

100%

33,607

100%

APARTMENT PIPELINE - DEC-2018 Stage

LOCATION - APARTMENT

Count of Developments

% of total

Count of Apartments

% of total

Location

Count of Developments

% of total

Count of Units

% of total

Planning

361

22%

32,723

27%

Inner Ring

166

10%

38,746

31%

Approved

735

45%

45,208

37%

Middle Ring

1,263

75%

71,915

58%

Commenced

552

33%

43,752

36%

Outer Ring

264

16%

12,742

10%

1,648

100%

121,683

100%

1,693

100%

123,403

100%

Total

ALL MEDIUM DENSITY

LOCATION - TOWNHOUSE

ALL MEDIUM DENSITY (COMBINED) - DEC 2018 Stage

A P AQR4T M EA NR TK SE T/ O TO VW E RN VH IOE UWS E S

TOWNHOUSE PIPELINE

+61 400 688 520

Total

LOCATION - ALL MEDIUM DENSITY (COMBINED)

Count of Developments

% of total

Count of Dwellings

% of total

Stage

Count of Developments

% of total

Count of Units

% of total

Planning

1,995

31%

42,784

28%

Inner Ring

199

3%

39,040

25%

Approved

2,767

43%

58,118

38%

Middle Ring

4,457

66%

90,859

58%

Commenced

1,675

26%

52,954

34%

Outer Ring

2,077

31%

27,111

17%

Total

6,437

100%

153,856

100%

Total

6,733

100%

157,010

100%

Source: Cordell Connect, RPM

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

63

OUTLOOK

MEDIUM DENSITY PIPELINE ACTIVITY

A P AQR4T M EA NR TK SE T/ O TO VW E RN VH IOE UWS E S

THE DOWNWARD TREND IN THE OVERALL

HOUSING MARKET IN 2018 SHOULD CONTINUE THROUGHOUT 2019. HOWEVER, SOME SUB-

MARKETS, SUCH AS VACANT LAND, WILL LIKELY Outer Ring 31%

RECOVER MORE QUICKLY AS FIRST HOME BUYERS COME BACK IN LARGER NUMBERS AND ACCESS TO FINANCE IMPROVES. TOWNHOUSES HAVE

HELD UP TO DATE AND WILL CONTINUE TO SHOW

PRICE GROWTH THROUGHOUT THE YEAR – ALBEIT

APARTMENT & TOWNHOUSE DEVELOPMENT SPLIT

BY LOCATION

MARGINAL GAINS. THE APARTMENT MARKET

WILL LIKELY BE THE LAST TO IMPROVE GIVEN THE IMPOSITIONS ON INVESTORS.

A key factor is the upcoming Federal election and Inner Ring 3%

Middle Ring 66%

how and when proposed new negative gearing rules come into play should Labor win.

While the grandfathering provisions in Labor’s

negative gearing and capital gains plans should

smooth out the transition to the new regime, any Source: Cordell Connect, RPM

extended delay in the implementation of the policy may encourage investors to purchase property

before the change - if they can obtain the necessary 64

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

prices to stabilise sooner than many expect.

In addition, at the conclusion of the Royal

Commission, the Hayne report did not make

any radical new changes to responsible lending requirements. Buyers will likely adjust their

WHILE UNCERTAINTY REMAINS, IT’S WORTH REINFORCING THE ORDERLY REDUCTION IN PRICE HAS FOLLOWED A PROLONGED PERIOD OF EXCEPTIONAL GROWTH THAT WAS NEVER SUSTAINABLE, AND THE OVERALL MARKET’S UNDERLYING FUNDAMENTALS REMAIN SOUND.

A P AQR4T M EA NR TK SE T/ O TO VW E RN VH IOE UWS E S

finance. This pull forward effect may actually cause

expectations in terms of the amount and timeframe to secure a loan. Hence lending should return to

more ‘normalised’ levels in the second half of 2019.

With investors still in retreat, a more diverse

pipeline of townhouse stock geared towards owner occupiers will continue to become more prevalent in the middle and outer rings of Melbourne and

Geelong as developers replenish their pipelines in

these areas given limited quality development sites in the inner ring.

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

65

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

A P AQR4T M EA NR 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

TOWNHOMES NEW HOT PROPERTY

A P AQR4T M EA NR TK SE T/ O TO VW E RN VH IOE UWS E S

THE EMERGENCE OF TOWNHOMES AS A

DESIRABLE HOUSING OPTION CONTINUES TO

GROW, WITH INCREASING NUMBERS OF BUYERS WILLING TO SACRIFICE LOT SIZE TO AFFORD

THEIR DREAM HOME IN AREAS WITH ACCESSIBLE

INFRASTRUCTURE AND AMENITIES. TOWNHOMES

PROVIDE A MORE AFFORDABLE HOUSING OPTION FOR BUYERS LOOKING FOR A HOME WITH A SIMILAR FOOTPRINT TO A HOUSE.

The share of medium density housing (particularly townhomes) in the outer ring of Melbourne has increased from 24% to 31% over the last 12

months. The growing pipeline of medium density

stock in the outer ring underpins demand for welldesigned, purpose-built dwellings for budgetconscious buyers.

Evidencing this trend, RPM recently launched Carter

The premium residences include a mix of 2, 3 and

and 19 double-storey homes in the picturesque

and $479,000, with house and land options between

Place, a development comprising 43 townhomes

Armstrong Creek in Melbourne’s South West. The

new estate, developed by APD and constructed by

Porter Davis, delivers townhomes with a high-quality Carter Place, a development in Armstrong Creek in Melbourne’s South West

finish, among a Hampton-Style streetscape and landscaping designed by Fleming’s.

4 bedroom townhomes ranging between $359,000 $495,000 and $529,000. Located adjacent to the Warralily Village shopping centre, a future child

and maternal health centre and only 10 minutes

from Geelong’s CBD, Carter Place underscores the

increasing popularity of townhomes in the outer ring.

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

67

OVERVIEW

IN VICTORIA, THE PROPORTION OF BOTH NEW DWELLINGS AND ESTABLISHED DWELLINGS

BOUGHT BY FOREIGN BUYERS DECLINED TO NEAR

INTERNATIONAL

7 YEAR LOWS IN DECEMBER QUARTER 2018.

OVER THE 3 MONTH PERIOD, FOREIGN BUYERS ACCOUNTED FOR 8.3% OF NEW DWELLING PURCHASES, AND 4.4% OF ESTABLISHED DWELLING PURCHASES.

Policy changes in China restricting foreign

investment outflows, onerous Australian foreign buyer taxes and tighter lending conditions in

Australia have combined to result in foreign buyers retreating from Victoriaâ&#x20AC;&#x2122;s residential market throughout 2018.

68

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

% OF FOREIGN PURCHASES BY DWELLING TYPE ■ New

Q 4 IMNAT RE KR ENTA TOI VOENRAVLI E W

THIS EXODUS WAS FURTHER AMPLIFIED IN THE DECEMBER QUARTER THROUGH THE DECLINE IN PROPERTY PRICES AND WEAK BUYER SENTIMENT 26% 24% 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%

■ Established

DEC 15

MAR 16

JUN 16

SEP 16

DEC 16

MAR 17

JUN 17

SEP 17

DEC 17

MAR 18

JUN 18

SEP 18

DEC 18

16%

11%

22%

15%

19%

14%

21%

14%

14%

12%

12%

13%

8%

9%

7%

10%

9%

11%

7%

9%

8%

9%

8%

6%

6%

4%

Source: NAB Quarterly Residential Property Survey

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

69

AUSTRALIAN ECONOMIC OUTLOOK

THE AUSTRALIAN ECONOMY PERFORMED SOLIDLY

This will confine growth in the Consumer Price

DOMESTIC PRODUCT (GDP) INCREASING BY AN

of Australia’s (RBA) inflation target of 2%-3%.

Q 4 IMNAT RE KR ENTA TOI VOENRAVLI E W

OVER CALENDAR YEAR 2018 WITH GROSS

ESTIMATED 2.9%. ECONOMIC CONDITIONS ARE

EXPECTED TO WEAKEN THROUGH 2019, LOWERING FORECAST GDP GROWTH TO 2.4%.

Index (CPI) to the lower end of the Reserve Bank Consequently, the RBA will have little impetus to

raise the cash rate, which is expected to remain at 1.5% through 2019.

Private consumption is expected to slow, as high

However, strong public infrastructure spending

impact personal wealth and consumer confidence.

anticipated to generate employment opportunities,

household debt and declining property prices

and improving private non–dwelling investment is resulting in unemployment rates falling to an

estimated 4.7% in 2019. The tighter labour market is also expected to induce higher wage growth.

70

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

AUSTRALIAN ECONOMY Economic indicators (% change)

2018 e 2019 f

GDP

2.90

2.40

Employment

2.70

2.20

Unemployment Rate

4.90

4.70

Average Earnings

1.50

2.20

Inflation

2.20

2.20

RBA Cash Rate

1.50

1.50

$A/US cents

0.71

0.75

Source: NAB. The Forward View

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

Q 4 IMNAT RE KR ENTA TOI VOENRAVLI E W

STRONG PUBLIC INFRASTRUCTURE SPENDING AND IMPROVING PRIVATE NONâ&#x20AC;&#x201C;DWELLING INVESTMENT IS ANTICIPATED TO GENERATE EMPLOYMENT OPPORTUNITIES, RESULTING IN UNEMPLOYMENT RATES FALLING TO AN ESTIMATED 4.7% IN 2019.

71

OVERVIEW

WHILE OVERALL DWELLING PRICES HAVE MODERATED, DEMAND FOR RENTAL

RESIDENTIAL INVESTMENT

ACCOMMODATION REMAINS ROBUST, WITH TOTAL

MELBOURNE SITTING AT 2.2% â&#x20AC;&#x201D; SLIGHTLY HIGHER THAN THE PREVIOUS QUARTER, THOUGH STILL BELOW THE ACCEPTABLE 3% TARGET.

Persisting low vacancy rates have resulted in

robust annual gains in rents across the bulk of the

defined areas in both houses and units over the past 2 years. Three bedroom houses in the inner ring

recorded the largest average annual rental gain with a 6.1% increase. In general, rental increases were most prominent in the inner ring for both houses and units, with 4 bedroom houses increasing by

$38 over the past 12 months and 1 and 2 bedroom

units increasing by $20 over the same period. This highlights the desire of many to be closer to the CBD, amenities and infrastructure. It should be

noted that houses in the inner ring are sparse and as such constitute low levels of rental properties, resulting in excessive fluctuation.

72

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

MEDIAN RENTS House Bedrooms

Dec-17

Sep-18

Dec-18

2

$550

$550

$550

$858

$838

$895

$38

0.3%

$430

$430

$420

-$10

2.5%

2

$350

$350

4

$430

INNER

3 4

MIDDLE In addition, solid rent increases have taken place in

3

4

OUTER

3

significant development in recent years. Demand in Geelong remains high, underpinned by renters who are either waiting for their house to be completed

GEELONG

2

INNER

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

houses on a rolling 2-month average. Interestingly, a

MIDDLE

slight reduction in asking rents for all bedroom sizes in houses occurred in the middle ring of Melbourne.

This could reflect renters deciding they are not

willing to pay more; realising they could get a newer,

bigger and cheaper rental property in the outer ring.

-$3

6.1%

2.3%

$560

-$10

2.2% 3.4%

$350

$0

4.6%

$375

$380

$385

$10

$295

$310

$320

$25

5.0% 2.5%

$420

$428

-$3

$350

$350

$360 $420

$20

Bedrooms

Dec-17

Sep-18

Dec-18

$360

$380

Change from previous year

2 Year Average Annual Gain

$20

2.2%

$0

3.2%

$420

$10

0.9% 2.9%

Units & Apartments

and 5.6%.

Overall, across all regions, other dwellings (units

$560

$378

$70

$400

Over the past 2 years Geelong has averaged rental of Melbourne has averaged gains of between 0.9%

$570

$390

$720

2.8%

4

3

or renting in the suburb they are looking to buy in.

gains of between 2.3% and 5%, while the outer ring

$380

$700

$0

2 Year Average Annual Gain

R E QS 4I DME A N RT K I AE LT IONVVEERSVTI M EE WN T

the outer ring, along with Geelong which has seen

2

$650

Change from previous year

OUTER

GEELONG

1 2

$460

1

$320

3 2

3 1

2

$675

$380

$490

$480

$320

$320

$625

$680

$20 $5

$400

$400

$250

$260

$268

$18

5.6% 1.3%

$333

$520

$350

$510

$340

$10 $8

3

$390

$395

$400

$10

2

$295

$300

$300

$5

1

3

2.7%

$395

$500

$5

2.7%

$210

$380

$220

$393

$220

$393

4.0% 4.2% 2.7%

$10

4.9%

$13

2.3%

2.6%

Source: REIV

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

73

OVERVIEW

While vacancy rates have either improved or

Despite this, rental growth has remained solid,

Due to significant capital gains seen in both

remain below 3%, reinforcing the consensus there is

investing in detached housing in the outer and

five years, rental yields have been below long term

R E QS 4I DME A N RT K I AE LT IONVVEERSVTI M EE WN T

remained unchanged across most regions, they all

providing appealing yields for investors. For those

no oversupply of stock in the market.

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

It is noted that new development areas in the

to be a movement from the middle to outer ring for

greenfields can experience short term oversupply

renters, rental yields for detached houses in the

due to the timing of settlement and construction.

detached houses and other dwellings over the last averages. Nevertheless, with prices moderating â&#x20AC;&#x201C; particularly in other dwellings â&#x20AC;&#x201C; rental yields have

picked up over the past 2 quarters with more robust gains in the December quarter.

outer and regional areas top the list.

VACANCY RATE

YIELDS

Melbourne

Dec-17

Sep-18

Dec-18

2 Year Average Gain

Houses

Dec-17

Sep-18

Dec-18

Inner (0-4Km)

2.2

1.4

1.5

2.0

Middle

2.10%

2.32%

2.41%

Inner Total

Inner (4-10Km)

Middle (10-20Km) Outer Total

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

Source: REIV

1.9

1.9 3.1

1.6

1.6 1.7

2.1 1.5

2.1

2.3 2.6 1.5

1.5

2.5 2.0

2.0

2.1

2.3 3.1

1.5 1.4

2.2

2.2 1.9

2.0

2.0

2.9

Inner

Outer

Metro

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

2.81%

2.53%

2.34%

2.91%

2.58%

2.71%

3.09%

2.77%

1.7

Regional

3.93%

4.15%

4.18%

2.3

Units

Dec-17

Sep-18

Dec-18

Middle

2.90%

3.12%

3.22%

1.6 2.1

2.0

Inner

Outer

Metro

Regional

74

2.20%

Source: REIV, RPM

4.00%

3.31%

3.51%

4.45%

4.02%

3.32%

3.65%

4.56%

4.24%

3.40%

3.88%

4.39%

OUTLOOK

MEGAN TAYLOR

MANAGER, PROPERTY MANAGEMENT megan@rpmrealestate.com.au +61 428 575 149

Regional areas of Victoria continue to achieve the with robust rental prices given regional areas are traditionally tightly held.

While first home buyers are still prominent in the land market, tighter lending criteria has made

it increasingly difficult for this cohort to enter

the market and therefore many continue to rent.

Coupled with continuing high population growth,

THE MOST IMPORTANT FACTOR FOR INVESTORS TO MONITOR IS THE FEDERAL ELECTION AND A POTENTIAL WIN FOR LABOR. SHOULD THIS OCCUR, CHANGES TO NEGATIVE GEARING POLICIES WILL HAVE AN EFFECT ON THE ESTABLISHED DWELLING MARKET. ANY REDUCTION IN INVESTOR STOCK ON THE MARKET COULD RESULT IN FEWER RENTAL PROPERTIES BECOMING AVAILABLE, PUSHING UP RENTS AND LOWERING VACANCY RATES. THIS ULTIMATELY HURTS RENTERS AND FURTHER EXACERBATES AFFORDABILITY CONCERNS.

vacancy rates have remained at acute levels –

In addition, renters will be in a more favourable

The common theory is that with softer investor

and amenities.

effect which heavily restrict landlords. As a result,

will then enable first home buyers and renters to

particularly in suburbs with strong infrastructure

With supply generally sitting well below demand levels, rents have continued to increase. These positives provide key incentives for investors

to enter the market, albeit in the face of lending headwinds.

position come mid 2020 with new rental laws taking these changes could discourage some investors from entering the market.

R E QS 4I DME A N RT K I AE LT IONVVEERSVTI M EE WN T

highest yields due to lower purchase prices coupled

demand, property prices will decline further. This purchase. The caveat with this theory, however, is

that the renter may not have a deposit saved or the

ability to service a mortgage. At Census 2016, 30%

of the population was in rental accommodation. Not all renters are on the cusp of home ownership (or even want to be home owners). Therefore, those

who aren’t will be hurt by having to pay higher rents

which will ultimately further delay saving for a home.

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

75

RESIDENTIAL INVESTMENT BUYER SURVEY DATA

Restrictive local lending practices, coupled with

While the traditional view that only wealthy family

These investors are taking advantage of

increasingly difficult for investors in the property

investment largely still holds, households with more

advertising sources as opposed to just 13% in

R E QS 4I DME A N RT K I AE LT IONVVEERSVTI M EE WN T

hurdles for overseas investors have made it

market, which is now permeating through Melbourne and Geelong’s greenfield market.

The tightening of credit by banks to both overseas

and local investors has seen the share of investors

households can invest in detached houses as an

modest incomes have become a more prominent investor cohort due to the robust growth of the

land market in recent years combined with above average yields achieved.

still be considered good value and a strong long-

term investment option. While prices in the middle and inner rings of Melbourne’s established market have fallen, the greenfield market has held up

significantly better. Moreover, the rental market remains acute.

76

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

purchasers increasing from 10% in the December

quarter 2017 to 26% in the same quarter a year later.

It also highlights the level of builder and land deals

were land only. This was due to the rapid price

quarter 2018. This is the lowest quarterly result

Despite the retreat by investors, the market can

is supported by the share of house and land

quarter 2017 whereby 90% of investor purchases

December quarter 2017 to 23% in the December

market .

the corresponding quarter a year earlier. This

currently in the market compared to the December

in the greenfield market fall from 33% in the

recorded by RPM and highlights the tough investor

builder referrals which comprised 22% of total

OVER THE DECEMBER QUARTER 2018, INVESTORS WITH A HOUSEHOLD INCOME OF BETWEEN $80,000 AND $120,000 ACCOUNTED FOR 56% OF ALL INVESTOR PURCHASERS – UP FROM 38% IN THE CORRESPONDING PREVIOUS QUARTER.

growth in recent years which created a ‘Fear Of

Missing Out’ mentality. Thus, investors purchased

land and considered what they were going to build at a later date.

RPM surveys every buyer on its clients’ estates in the greenfield market. 23% of all buyers indicated they were investors. The following illustrates demographic and purchase intent changes amongst this cohort based on surveys from the December quarter 2018 compared to the same quarter in 2017.

HOUSEHOLD INCOME

>$120,000 $101,000 - $120,000 $80,001 - $100,000 $60,001 - $80,000 $40,001 - $60,000 <$40,000 Other Builder Referral Family or Friend Herald Sun Home Mag

ADVERTISEMENT SOURCE

Newspaper - Metro Newspaper - Local TV Direct Mail Signage Radio Website - Other Mypackage.com Google Realestate.com Project Website

DECEMBER 2018

Investor

Owner-Occupier

Investor

Owner-Occupier

33%

67%

23%

77%

House and Land

Land Only

House and Land

10%

90%

26% 38% 13% 25% 13% 9% 1%

4%

13%

32%

>$120,000 $101,000 - $120,000 $80,001 - $100,000 $60,001 - $80,000 $40,001 - $60,000 <$40,000 Other Builder Referral Family or Friend

0%

Herald Sun Home Mag

0%

Newspaper - Local

0% 0%

Newspaper - Metro TV

0%

Direct Mail

0%

Radio

21% 0% 0%

12% 15% 2%

Signage Website - Other Mypackage.com Google Realestate.com Project Website

Land Only

74%

R E QS 4I DME A N RT K I AE LT IONVVEERSVTI M EE WN T

PURCHASE TYPE

OWNER OCCUPIER VS INVESTOR

DECEMBER 2017

33% 30%

26% 11% 0% 0%

15%

22%

22% 0% 0% 0% 0% 0%

15% 0% 0% 4%

11% 7% 4%

Q 4 R E S I D E N T I A L M A R K E T R E V I E W | D E C E M B E R Q U A R T E R 2 018

77

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

MEGAN TAYLOR

peterg@rpmrealestate.com.au

megan@rpmrealestate.com.au

MANAGER, PROPERTY MANAGEMENT

DIRECTOR, COMMUNITIES

+61 428 575 149

+61 411 494 499

ROD ANDERSON

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

DELENA BAJADA-GARDNER

ASSOCIATE DIRECTOR, COMMUNITIES delenag@rpmrealestate.com.au +61 487 888 556 78

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