PEAK DOWNTURN UPSWING TROUGH RECOVERY

Transcription

1 MARKET OUTLOOK

2 PROPERTY CYCLE

3

4 UPSWING PEAK TROUGH DOWNTURN RECOVERY

5 TEN CYCLES SINCE 1880 AVERAGE 8 YEARS 5 YEARS 11% pa 3 YEARS - 5% pa PAST CYCLES AVG 8.5% PA

6 PROPERTY CYCLE? 1. LIQUIDITY EASE & COST OF FUNDS 2. ECONOMY PROFITS & EMPLOYMENT 3. DEMAND HOUSEHOLD FORMATION; SALE VOLUMES & TIME TAKEN TO SELL 4. RETURNS CAPITAL GROWTH/YIELDS 5. SCARCITY SUPPLY V. DEMAND & FOR SALE/RENT 6. CONFIDENCE GREED/CAUTION 7. FACTOR X SMSF; CHINA; FIRB & AUSSIE $

7 NEXT PROPERTY CYCLE AVG 5% PA

8 WHY, SAY, 5% PA 1. LIQUIDITY LOW INTEREST RATES 2. ECONOMY STRUCTURAL ISSUES & BUDGET DEFICIT 3. DEMAND CHANGING DEMOGRAPHICS 4. RETURNS LOW AFFORDABILITY 5. SCARCITY SPARE CAPACITY; CHANGING DEMAND 6. CONFIDENCE MORE REACTIONARY INTERNET/CELEBRITY 7. FACTOR X CHINA; COSTS & NEW URBAN FORMS

9 PROPERTY CLOCK

10

11 PEAK 12 UPSWING 9 DOWNTURN 3 RECOVERY 6 TROUGH

12 HIGH ENQUIRY RAMPED UP APPROVALS FAST SALES STRONG PRICE GROWTH RENTS PEAKING SELLER S MARKET UPSWING 9 PEAK 12 ENQUIRY DECLINING ABANDONED PROJECTS FALLING SALES FALLING PRICES FALLING RENTS VERY cautious MARKET DOWNTURN 3 RECOVERY ENQUIRY INCREASING RISE IN BUILDING ACTIVITY RISING SALES RETURN PRICE GROWTH IMPROVING RENTS MORE EQUAL MARKET 6 TROUGH STAGNATE ENQUIRY SLOW BUILDING ACTIVITY FLAT SALE VOLUMES STEADY/FALLING PRICES STABLE RENTS BUYER S MARKET

13 DARWIN PERTH 9 SYDNEY MELBOURNE BRISBANE 12 6 CANBERRA 3 HOBART ADELAIDE

14 MARKET INDICATORS

15 TOTAL EMPLOYMENT GROWTH BRISBANE CITY MATUSIK ANALYSIS SOURCE: ABS FEBRUARY 2014.

16 TOP 10 URBAN AREAS IN AUSTRALIA 3 RANK BASED ON TOTAL POPULATION BRISBANE 2.3M 45,000 TOTAL POPULATION AS AT MID-2104 ANNUAL CHANGE LAST YEAR SUNSHINE COAST 297K 11, BRISBANE 2.3M 45,000 NEWCASTLE 431K 10, GOLD COAST 615K 23,000 PERTH 2.0M 65,000 CANBERRA 389K 14, SYDNEY 4.8M 64,000 ADELAIDE 1.3M 14, WOLLONGONG 286K 3, MELBOURNE 4.4M 79,000

17 BRISBANE CITY TOTAL RESIDENTIAL SALES

18 BRISBANE CITY RESIDENTIAL PRICES $ MATUSIK ANALYSIS SOURCE: RPDATA & QLD GOVERNMENT. QUARTERS. MATUSIK ESTIMATE IN RED.

19 ENTERING MARKET RECOVERY POPULATION GROWTH POSITIVE OPINION & COMMENTARY SOUTHERN INVESTOR FOCUS ENQUIRY & SALES INCREASING JOB CREATION PRICE & RENTAL GROWTH EXPECTATIONS BUT LIMITS TO GROWTH & DEMAND

20 HOUSING DEMOGRAPHICS

21 BRISBANE CITY HOUSING DEMO STATISTICS 60% NO CHILDREN AT HOME 25% COUPLES ONLY 25% LIVE ALONE

22 BRISBANE CITY HOUSING DEMO STATISTICS 60% NO CHILDREN AT HOME 25% COUPLES ONLY 25% LIVE ALONE 70% DETACHED HOUSES 20% APARTMENTS 10% ATTACHED DWELLINGS

23 BRISBANE CITY HOUSING DEMO STATISTICS 60% NO CHILDREN AT HOME 25% COUPLES ONLY 25% LIVE ALONE 70% DETACHED HOUSES 20% APARTMENTS 10% ATTACHED DWELLINGS 50% 4+ BED HOUSES 30% 3+ BED APARTMENTS 60% 3+ BED ATTACHED

24 AFFORDABILITY DETACHED HOUSE $550,000 $495 WEEK RATIO 6.9 TO DIS. INCOME 38% INCOME

25 AFFORDABILITY DETACHED HOUSE $550,000 RATIO 6.9 TO DIS. INCOME $495 WEEK 38% INCOME ATTACHED DWELLINGS $410,000 RATIO 5.1 TO DIS. INCOME $395 WEEK 30% INCOME

26 AFFORDABILITY DETACHED HOUSE $550,000 RATIO 6.9 TO DIS. INCOME $495 WEEK 38% INCOME ATTACHED DWELLINGS $410,000 RATIO 5.1 TO DIS. INCOME $395 WEEK 30% INCOME A FORCED SHIFT IN DEMAND

27 MARKET DIRECTION

28 GROSS RENTAL YIELDS - LONG TERM TENANCIES TRADITIONAL ATTACHED PRODUCT/ HOUSES SMALL-LOT HOMES SYDNEY 3.9% 4.7% MELBOURNE 3.4% 4.2% BRISBANE 4.2% 5.5% ADELAIDE 4.3% 4.9% PERTH 4.2% 4.8% CAPITALS 3.9% 4.7%

29 MEDIAN DWELLING PRICES AS AT JAN 2014 SYDNEY $660, % PA MELBOURNE $553, % BRISBANE $462, % ADELAIDE $390, % PERTH $525, % CAPITALS $534, %

30 DARWIN PERTH 9 SYDNEY MELBOURNE BRISBANE 12 6 CANBERRA 3 HOBART ADELAIDE

31 BETTER APARTMENT BUYING

32 LOCATION EMPLOYMENT INFRASTRUCTURE PULSE POINT SUPPLY V. DEMAND

33 EVERTON PARK AREA UNDERLYING DEMAND 375pa RECENT SUPPLY 390pa BALANCED INNER NORTH UNDERLYING DEMAND 750pa RECENT SUPPLY 1,500pa OVERSUPPLIED INNER WEST UNDERLYING DEMAND 425pa RECENT SUPPLY 250pa UNDERSUPPLIED INNER SOUTH UNDERLYING DEMAND 675pa RECENT SUPPLY 725pa STILL BALANCED

34 SITE OVERALL SIZE NO. OF DWELLINGS OUTLOOK ORIENTATION ELEVATION

35 DESIGN PRODUCT SIZE FLOOR PLATE LAYOUT LIGHT + PRECEPTION OF SPACE LIFT TO APARTMENT RATIO SHARING ENSUITES, EQUAL BEDROOMS STORAGE OWNER-RESIDENT RESALE APPEAL

36 FOUR F S FIXTURES FINISHES FITTINGS FACILITIES BODY CORP. FEES

37 MATUSIK.COM.AU FOCUS REPORT BRISBANE RENTAL MARKET

38 MATUSIK.COM.AU FOCUS REPORT BRISBANE RENTAL MARKET

39 THIS MATUSIK PRESENTATION IS OPINION & NOT ADVICE. THE AUDIENCE SHOULD SEEK THEIR OWN PROFESSIONAL ADVICE ON THE SUBJECT BEING DISCUSSED.

40 END NOTES

41 RESIDENTIAL CYCLE MARKET RECOVERY COMING CYCLE/S LESS OVERALL GAINS BRISBANE CITY MARKET IN RECOVERY LIMITS TO CAPITAL GROWTH DRIVE RENTAL RETURNS ALTERNATE HOUSING BETTER INVESTMENTS