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
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
Q4 MARKET OVERVIEW
LEAD INDICATORS
4 6
3
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
8
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
10
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
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
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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