residential Property MARKET OVERVIEW AND OUTLOOK
publication 3 / 2014
APRIL 2014
Residential Market Update
The Australian Residential Property Market recorded one of the strongest monthly growth rates on record, at 2.3%
The residential property market closed at the
The Australian Residential Property Market showed a resurgence in growth from the (RP Data
HIA and the ABS
change so far across the major capital
ABS on track with most expectations of the
The rising Australian dollar continued to create
The RBA
the state of the domestic and international end of the RBA seen the Property Council/ANZ Property Industry
Of key interest was the strong pickup in
Dwelling trenD year on year 16%
15.6%
Dwelling Trend YoY (%) National Average YoY (%)
14% 11.6%
12%
10%
8% 6% 5.0%
4.7%
4.6% 3.8%
4%
1.7%
2% 0
0.9%
Sydney ( NSW )
Melbourne ( VIC )
Brisbane ( QLD )
Perth ( WA )
Source: RP DATA
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FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – APRIL 2014
Adelaide ( SA )
Darwin ( NT )
Canberra ( ACT )
Hobart ( TAS )
Key statistics MarcH 2014
ECONOMIC GROWTH WORLDWIDE 2013 US, EUROPE & JAPAN 2013 AUSTRALIAN 2013 AUSTRALIAN 3rd quarter 2013
Consumer Sentiment Index
AUD BUYS 0.933 USD
3.0% 2.2% 2.8% 0.8%
Westpac - Melbourne institute
UPDATED 12:30PM
3.2% 20TH APRIL
99.7
0.3%
in mARCH
GDP growth
2013
Australian Employment UNEMPLOYMENT 6.0%
RBA STATS 0% 0.8%
PARTICIPATION
in 1 MONTH
132 pts
7.2%
2.3%
2.9%
15.8%
$ 27,644
monthly
10.6% adjusted value of total dwelling commitments
3.5%
Property Council/ ANZ Property Industry Confidence Index
housing finance
quarterly
Australia wide snapshot
HIA-COMMBANK HOUSING AFFORDABILITY INDEX
75.1
64.7%
in Q1 2004
annual
CASH RATE 2.50% INFLATION 2.70%
Difference from TROUGH Dwelling Value
Difference from Peak Dwelling Value
Dwelling Values
Median House Price
$ 535,000
Median Unit Price
$ 451,500
New Home Sales
0.5 %
Weekly House Rent $ 391 Rental Yield 3.8% Weekly Unit Rent $ 399 Rental Yield 4.6%
New Dwelling Approvals
-5.0%
Source: ABS, RP DATA, HIA, RBA, Westpac - Melbourne Institute, REIA
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – APRIL 2014
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Residential Market Update
Future estate capital city rating suMMary STATE
CAPITAL CITY
FUTURE ESTATE SCORE
OVERVIEW
NSW
VIC
Asking prices were lowered after a shift in
QLD
WA
SA excellent and discount rates were rated
ACT
the green showing “Good” or “Healthy” ratings
NT
TAS
Source: Future Estate Research
Change from Previous Peak and Trough (%)
cHange FroM preVious peaK anD trougH (%) 21.9 22% 18%
18.2
17.0
15.8
14.6
14%
Change (%)
The Australian market median values are now 7.2% over previous market peak and 15.8% over market trough; Sydney is a clear outlier at 15.8% over its previous market peak
10% 6%
9.2
8.0
6.9
6.1
4.7
Change from Previous Peak (%)
2.9 1.2
2% 0
-1.2
-5.1
-5.2
-7.9
Adelaide (SA)
Darwin (NT)
Brisbane (QLD)
Hobart (TAS)
Change from Previous Trough* (%)
-4% -8% Sydney (NSW)
4
Melbourne (VIC)
Perth (WA)
Canberra (ACT)
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – APRIL 2014
Source: RP DATA
auction clearance rates Auction clearance rates saw a change towards RP Data
Auction Clearance Rates property auction clearance rates: weeK enDing 12tH april 80%
78.1% 72.3%
70%
76%
74.8%
70% 64.4%
60% 50% 40%
Auction clearance rates remained resilient, even after minor pullback in the rates amid growing uncertainty regarding the policies in the short term
30% 20% 10% 0
Australian Property Monitors
RP Data
REIV/REINSW* Sydney
Melbourne
capital cities Residential property market in the Australian capital cities were calculated
growth rates are much higher than what has
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – APRIL 2014
5
Residential Market Update
quarterly capital city House anD unit price trenD As evident, the quarterly growth rate for Hobart’s units was a clear outlier in the general trend. Hobart’s dwelling values are seeing good median value growth performance in the improved and improving local economy
15.1%
15%
House Price Trend Over Quarter (%) Unit Price Trend Over Quarter (%)
13%
11%
9%
7% 5.8% 4.8%
5%
3.7%
3%
2.9%
2.5%
2.1%
2.0%
2.4% 1.0%
1% -0.1%
0 -1%
4.0%
3.7%
3.5%
Melbourne ( VIC )
Sydney ( NSW )
Hobart ( TAS )
Darwin ( NT )
0.0%
Brisbane ( QLD )
-1.0%
Canberra ( ACT )
Adelaide ( SA )
Perth ( WA )
Source: RP DATA
capital city House anD unit gross rental yielDs Sydney and Melbourne dwelling yields have been trending lower, as the local market sees a strong increase in median dwelling values. Darwin, given the property supply constraints, continued to perform well in yields
Gross Rental Yields 7% 6%
5.9%
6.2%
5.2%
5%
5.4% 4.9%
5.1% 4.7%
4.6% 4.3%
4.6%
4.2%
4.1% 3.8%
4%
3.3%
3% 2% 1% 0 Darwin ( NT )
Hobart ( TAS )
Brisbane ( QLD )
Adelaide ( SA )
Source: RP DATA
6
4.7% 4.3%
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – APRIL 2014
Canberra ( ACT )
Perth ( WA )
Sydney ( NSW ) House Gross Rental Yield (%)
Melbourne ( VIC ) Units Gross Rental Yield (%)
CAPITAL CITY hOUSE AND UNIT mEDIAN PRICES State
Capital City
median house Price ($)
median Unit Price ($)
Dwelling Trend YTD* (%)
Sydney
Queensland South Australia
Adelaide Perth
Tasmania
Source: RP DATA * Year to Date
KEY INVESTmENT ThEmES Theme
Summary
Future Estate View
Comments
Key growth opportunities capital growth
regional centres especially in Queensland emerging from the dip
market growth
play a role set to expansionary setting on record lows
growth phase
Key value opportunities market health new areas to demonstrate growth
Pockets of opportunities as lifestyle potential of growth
growth yield growth
Rental income and
yield
Yield compression is a concern in the major capital cities as dwelling constraints and dwelling undersupply
are generally a leading indicator to dwelling price increases
Rental growth currently not likely to
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – APRIL 2014
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Residential Market Update
KEY CYCLICAL ThEmES Cyclical Outlook
Summary
global economy and policy
Comments
local property markets are
US economy is growing at an
Domestic growth and policy
Future Estate View
to credit and changes to price growth areas
exchange rate and local cash rate changes
RBA policies
interest
ABS assisting in housing market growth a lower participation rate is
on the lower end of the RBA preferred range may lead to further interest rate cuts in
for the RBA Housing
REIA translated to strong auction interest rates Historic low interest rates
lowest in a decade The median house price/
areas with high employment
is low compared to Asia &
are experiencing growth
stimulating owner occupier noticing high growth areas population growth
Population growth was
Population growth expected
increase in period ending
Migration to Australia concentrated in capital cities
– housing shortage too from
Dwelling construction
growth
grows through international migration
with construction and completions remaining poor
decade ago
increasing
rental growth and yield has RP Data
consumer
expect house prices to rise fundamentals who expect a fall HIA reports hotspots are emerging
Household savings / demand for credit
it is anticipated that demand for housing credit
mortgage repayments after
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FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – APRIL 2014
leading owner-occupier demand
Future estate capital city rating
PERTH State Auction Clearance Rate State Days on Market (days) State Discount Rate Asking Price Index Change City Vacancy Rate State Property Market Score*
BRISBANE
DARWIN State Auction Clearance Rate State Days on Market (days) State Discount Rate Asking Price Index Change City Vacancy Rate State Property Market Score*
36.8% 90 6.0% -0.5% 1.9% 2.55
85% 132 5.4% 3.7% 1.2% 3.00
Future Estate Capital City Rating
Future Estate Capital City Rating
3.90
2.74
State Auction Clearance Rate State Days on Market (days) State Discount Rate Asking Price Index Change City Vacancy Rate State Property Market Score*
36.2% 132 7.7% 1.5% 2.0% 2.85
Future Estate Capital City Rating
2.96
SYDNEY
DARWIN
State Auction Clearance Rate State Days on Market (days) State Discount Rate Asking Price Index Change City Vacancy Rate State Property Market Score*
NT
70% 100 6.2% 0.9% 1.5% 4.10
Future Estate Capital City Rating
QLD
3.73
WA
BRISBANE
SA
CANBERRA
NSW SYDNEY
PERTH
ACT ADELAIDE
CANBERRA
VIC
MELBOURNE
State Auction Clearance Rate State Days on Market (days) State Discount Rate Asking Price Index Change City Vacancy Rate State Property Market Score*
45.5% 86 5.0% 1.6% 2.1% 3.30
Future Estate Capital City Rating
3.53
TAS HOBART
ADELAIDE State Auction Clearance Rate State Days on Market (days) State Discount Rate Asking Price Index Change City Vacancy Rate State Property Market Score*
MELBOURNE 51.0% 154 7.4% 2.0% 1.4% 3.15
Future Estate Capital City Rating
3.64
State Auction Clearance Rate State Days on Market (days) State Discount Rate Asking Price Index Change City Vacancy Rate State Property Market Score*
HOBART 67% 107 6.9% -1.5% 2.1% 4.35
Future Estate Capital City Rating
3.49
State Auction Clearance Rate State Days on Market (days) State Discount Rate Asking Price Index Change City Vacancy Rate State Property Market Score*
27.6% 193 10.0% 3.0% 1.7% 3.90
Future Estate Capital City Rating
3.08
* The State Property Market Score, which is out of 5, takes into account several factors, including demographic factors that indicate Future Growth, Quarterly House and Unit Median Price Growth Rates, Annual Dwelling Growth Rates and the Median Mortgage Payments as a proportion of the Median Household Income.
Sources: Australian Property Monitors, Domain.com.au and SQM Research.
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – APRIL 2014
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Future estate’s research team has developed an extensive quantitative modelling process to critically assess the australian residential property Market. For the capital city rating, our team records, benchmarks, assigns weights to and scores various key property market lead indicators and descriptive statistics.
please contact our team at Future estate for more information on our methodology and/or our range of other property investment advisory services.
our services include: Buyers’ agency research – suburb reports and due-diligence markets personalised advice and investment strategy panel of “endorsed projects”- over $1bn portfolio of “investment grade” projects nationally contact us to arrange a complimentary consultation to discuss your needs
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FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – APRIL 2014
(03) 9988 2900 info@futureestate.com.au www.futureestate.com.au @futureestate future.estate future estate