residential Property MARKET OVERVIEW AND OUTLOOK
publication 6 / 2014
JULY 2014
Residential Market Update
The top performing cities for 2013-2014
The year 2014 to date has been an interesting year in a number of states where price movement have been dramatic – in both directions. According to RP Data
May 2014.
suppressed for most of 2014 and Darwin
reinforces the notion that the housing
gain over the month recording a rise in
for a unit. Darwin continues to show the
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FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – JULY 2014
Key statistics JUNe 2014
ECONOMIC GROWTH WORLDWIDE 2013 US, EUROPE & JAPAN 2013 AUS annual to MARCH 2014 AUSTRALIAN 1ST quarter 2014
Consumer Sentiment Index
AUD BUYS
3.0% 2.2% 3.2% 0.8%
0.9356 USD
Westpac - Melbourne institute
UPDATED on 7th July 2014
94.9
1.9% in JUNE
GDP growth
2014
Australian Employment UNEMPLOYMENT 6.0%
RBA STATS 0% 0.6%
PARTICIPATION in Q1 2014
$ 27,725
132 pts
7%
1.4%
10.1% adjusted value of total dwelling commitments
monthly
Property Council/ ANZ Property Industry Confidence Index
housing finance
quarterly -0.2%
Australia wide snapshot
HIA-COMMBANK HOUSING AFFORDABILITY INDEX
77.2
64.7%
in 1 MONTH
annual
CASH RATE 2.50% INFLATION 2.90%
Difference from Peak Dwelling Value
0.4%
Dwelling Values
Median House Price
$ 580,000
Median Unit Price
$ 482,000
New Home Sales
4.3 %
Weekly House Rent $ 435 Rental Yield 3.9% Weekly Unit Rent $ 426 Rental Yield 4.6%
New Dwelling Approvals
-1.7%
Source: ABS, RP DATA, HIA, RBA, Westpac - Melbourne Institute, REIA
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – JULY 2014
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Residential Market Update
FUtUre estate capital city ratiNg sUmmary STATE
CAPITAL CITY
NSW
SYDNEY
FUTURE ESTATE SCORE
OVERVIEW
VIC
QLD
WA
SA
ADELAIDE
ACT
NT vacancy rate score. TAS
Source: Future Estate Research
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FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – JULY 2014
DwelliNg treND year oN year 18% 16%
Dwelling Trend YoY (%)
15.4%
14% 12% 10%
9.4%
8%
6.7% 5.7%
6%
5.2%
4%
2.9%
2.9%
Adelaide ( SA )
Canberra ( ACT )
2.5%
2% 0
Sydney ( NSW )
Melbourne ( VIC )
Brisbane ( QLD )
Darwin ( NT )
Perth ( WA )
Hobart ( TAS )
Source: RP DATA
aUctioN clearaNce rates
capital cities numbers remain tight suggesting demand
outside of Sydney where price points are
recording $800,000 for June 2014 and
APM, were at June 2014.
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – JULY 2014
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Residential Market Update
property aUctioN clearaNce rates: weeK eNDiNg 29tH JUNe Auction Clearance Rates 80%
73%
75%
72%
70.1%
74%
69.2%
70% 60% 50% 40% 30% 20% 10% 0
Australian Property Monitors
RP Data
REIV/REINSW* Sydney
Melbourne
cHaNge From preVioUs peaK aND troUgH (%) Change from Previous Peak and Trough (%) 23.1
24% 20%
17.1
17.0 15.2
24%
Change (%)
16%
14.2
12% 8.8 8%
8.7
6.4 Trough (%) Change from Previous Peak and 5.6 3.6
4% 23.1
Change Previo Peak (%
2.2
Change from Previous Peak and Trough (%) 0.7 17.0
Change (%)
17.0
Change (%)
16% 12%
12% 15.2
8.8
Sydney (NSW)
3.6
4%
6.4
2.2 -4%
0
2.2
8.8
8.7
-4.5 Melbourne Canberra -6.0 Adelaide (VIC) (ACT) (SA)
Perth (WA)
Change from Previous Peak (%)
Melbourne Canberra (VIC) (ACT)
Adelaide (SA)
Brisbane (QLD)
Darwin (NT)
Brisbane (QLD) -8.3 Hobart (TAS)
-8.3 Darwin Hobart (NT) (TAS) Change from Previous Peak (%)
-1.6
-1.6 Perth (WA)
Brisbane (QLD)
0.7
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – JULY 2014 Sydney (NSW)
Adelaide (SA)
-4.5
Sydney (NSW)
-8%
6.4 Melbourne Canberra 5.6 (VIC) (ACT)
Perth (WA)
0.7
-8%
-4%
-6.0 8.7
5.6 Source: RP DATA 30 June 2014
0
3.6
-4.5 17.1
14.2
8% 4%
14.2
-8%
8%
Change Previo Trough
17.1
-1.6
15.2
-4%
16%
20%
6
0
20%
23.1
24%
-6.0
Darwin (NT)
Change from Previous Trough* -8.3 (%) Hobart (TAS)
Change from Previous Trough* (%)
qUarterly capital city HoUse aND UNit price treND House Price Trend Over Quarter (%)
7%
Unit Price Trend Over Quarter (%)
The best performing
6% 5.9%
5% 4% 3% 2% 1%
1.6% 0.9%
0.8% 0.8%
0.7%
0 -0.2%
-0.3%
-0.5%
-0.7%
-1%
-0.3%
-2% -2.3%
-2.5%
-3%
-2.4% -2.4%
-3.2%
-4%
Sydney ( NSW )
Brisbane ( QLD )
Perth ( WA )
Adelaide ( SA )
Hobart ( TAS )
Canberra ( ACT )
Darwin ( NT )
Melbourne ( VIC )
Source: RP DATA
Gross Rental Yields capital city HoUse aND UNit gross reNtal yielDs 7%
Gross Rental Yields
6%
5.8% 5.8%7%
5%
6%
5.3%
5.2% 6.1% 5.2% 4.6%
5.2% 5.1%
5%
4%
5.0%
5.9%
4.9%
5.4%
4.3% 4.5%
4.8%
4.3%
4.2%
4.9%
4.3%
4.7% 4.2%
4.7%
4.4%
5.0%
3.8%
4.6%
4.2% 3.8%
4%
3.4%
4.3%
2014
3.4%
3% 3%
2% 2%
1%
1%
0
0
Darwin ( NT )
Hobart Darwin ( NT )) ( TAS
Source: RP DATA
Brisbane Hobart ( TAS ) ) ( QLD
Canberra Brisbane ) ( QLD( ACT )
Adelaide Perth Adelaide ( SA ) ( SA ) ( WA )
PerthCanberra ( WA ) ( ACT )
Sydney Sydney ( NSW ( NSW ) )
HouseHouse GrossGross Rental Yield (%) Rental Yield (%)
Melbourne Melbourne ( VIC) ) ( VIC Units Gross Units Gross Rental Yield (%) Rental Yield (%)
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – JULY 2014
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Residential Market Update
CAPITAL CITY hOUSE AND UNIT mEDIAN PRICES State
Capital City Sydney
median house Price ($)
median Unit Price ($)
Dwelling Trend YTD* (%)
$800,000
Victoria
$490,000 $420,000 $440,000
Perth Tasmania
Hobart
Northern Territory
Darwin
$343,000
Source: RP DATA
KEY INVESTmENT ThEmES Theme
Summary
Future Estate View
Comments
Key growth opportunities growth growth
Western and Eastern Suburbs
Key value opportunities
Discounts to when compared to Sydney new areas to demonstrate growth
trends emerge – i.e. inner city Outer South and North Western
growth yield growth income and
rents in some areas
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FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – JULY 2014
KEY CYCLICAL ThEmES Cyclical Outlook
Summary
global economy and policy
Future Estate View
to credit and changes to price growth areas No negative impacts
Comments
rate changes
RBA Domestic growth and policy
Lowered cash rate and above trend growth however the recent tough budget had a dampening
end of 2014 which is having a strong impact on property investment activity
starting to become an issue for the RBA Housing
REIA
Lower interest rates have
spent on mortgage payments,
Housing price growth, besides
The median house price/
trend, which when combined
& Europe Impact on housing demand /
population growth
are rising throughout 2014, – housing shortage too from reduced construction activity and investment driver of demand for housing and is forecast to underpin a positive housing price growth of new migrants given greater
Dwelling construction
increased throughout 2014
compared to a decade ago
increasing
growth trends consumer
RP Data emerging, with stronger HIA reports hotspots are emerging
Household savings / demand for credit
Demand for housing credit is it is anticipated that demand for housing credit
trend Investor credit demand is
Demand for housing credit mortgage repayments after recent savings
FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – JULY 2014
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Residential Market Update
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*
36.7% 86 6.0% 0.0% 2.3% 2.40
75% 133 5.5% -1.2% 1.4% 3.45
Future Estate Capital City Rating
Future Estate Capital City Rating
3.34
2.63
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% 136 7.5% 0.7% 2.3% 2.70
Future Estate Capital City Rating
3.00
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
71.4% 94 6.0% -0.8% 1.7% 3.65
Future Estate Capital City Rating
QLD
3.58 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*
44.7% 86 4.9% -4.1% 2.3% 2.55
Future Estate Capital City Rating
2.74
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 51.8% 148 7.2% -0.7% 1.6% 2.40
Future Estate Capital City Rating
3.11
State Auction Clearance Rate State Days on Market (days) State Discount Rate Asking Price Index Change City Vacancy Rate State Property Market Score*
HOBART 67.1% 105 6.8% -1.6% 2.4% 2.85
Future Estate Capital City Rating
3.41
* 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.
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FUTURE ESTATE RESIDENTIAL PROPERTY MARKET UPDATE – JULY 2014
State Auction Clearance Rate State Days on Market (days) State Discount Rate Asking Price Index Change City Vacancy Rate State Property Market Score*
28% 188 9.5% -1.7% 1.8% 2.70
Future Estate Capital City Rating
2.44 Sources: Australian Property Monitors, Domain.com.au and SQM Research.
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 – JULY 2014
(03) 9988 2900 info@futureestate.com.au www.futureestate.com.au @futureestate future.estate future estate