Housing and strata market update August 2013. 2 Residential Real Estate Absolutely Underpins...

Housing and strata market updateAugust 2013

2

Residential Real Estate Absolutely Underpins Australia’s Wealth Position

Commercial Real Estate

$0.7 TrillionAustralian Listed Stocks

$1.4 Trillion


$0.7 TrillionCommercial Real Estate

$0.7 Trillion

Residential Real Estate

$4.9 Trillion

Australian Superannuation

$1.5 TrillionAustralian Superannuation

$1.58 Trillion (SMSF $496.2 Billion)

3

Residential Real Estate Absolutely Underpins Australia’s Wealth Position


$0.7 TrillionAustralian Listed Stocks

$1.4 Trillion


$0.7 TrillionCommercial Real Estate

$0.7 Trillion

Residential Real Estate

$4.9 Trillion

Australian Superannuation

$1.5 TrillionAustralian Superannuation

$1.58 Trillion (SMSF $496.2 Billion)

$78 Billion / 1.6%

4

The combined capital city index is showing a clear recovery trend on an annual basis

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Jul-97 Jul-99 Jul-01 Jul-03 Jul-05 Jul-07 Jul-09 Jul-11 Jul-13

▶Housing market conditions across the combined capital cities have been improving since May 2012 after a 7.7% peak to trough decline which lasted nineteen months.

▶On a rolling quarterly basis, home values have increased over 10 of the past 12 months and values across the eight capital city aggregate are 4.9% higher than a year ago.

Source: rpdata - Rismark

Annual and quarterly change in capital city home values

Annual change

Quarterly change

5

All capital cities except for Hobart have recorded an increase in home values over the past 12 months

8.3%

6.5%

4.9%4.3% 4.1%

1.7%1.1% 0.8%

-0.4%-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Perth Sydney AustralianCapitals

Melbourne Canberra Darwin Adelaide Brisbane Hobart

Annu

al c

hang

e in

dw

ellin

g va

lue

▶Combined capital city home values have increased by 4.9% over the past 12 months.▶Perth (8.3%) and Sydney (6.5%) have been the stand-out markets for capital gains over the year.▶Hobart (-0.4%) is the only capital city to have recorded a fall in values over the year however, growth

has been limited in Brisbane (0.8%), Adelaide (1.1%) and more recently in Darwin (1.7%).

Annual change in capital city dwelling values


6

Capital city home values have increased by 2.3% over the three months to July 2013

4.4%3.7%

2.4% 2.3%2.0%

1.4%

-0.7% -0.9%

-3.1%-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Perth Sydney Melbourne AustralianCapitals

Hobart Canberra Brisbane Darwin Adelaide

Qua

rter

ly c

hang

e in

dw

ellin

g va

lue

▶Combined capital city home values have lifted by 2.3% over the three months to July 2013.▶Over the three months, values have increased in each city except for Adelaide (-3.1%), Darwin

(-0.9%) and Brisbane (-0.7%).▶Perth (4.4%) and Sydney (3.7%) have been the standout performers over the period.

Change in capital city dwelling values, 3 months to July 2013


7

The recent growth in home values has seen three capital cities eclipse their previous peaks

-10.8%-9.8% -9.2%

-5.8%-4.4%

0.0% 0.3%

3.2%

-1.3%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

Brisbane Hobart Darwin Adelaide Melbourne Perth Canberra Sydney Australiancapitals

▶Across the combined capital cities, home values at the end of July 2013 were -1.3% lower than their previous peak of October 2010.

▶Home values in Brisbane (-10.8%), Hobart (-9.8%) and Darwin (-9.2%) still have a long way to go before recording a technical recovery.

Change in home values from their previous peak – to July 2013


8

Hobart was the only capital city to record a fall in home values over the past year

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Jul-99 Jul-01 Jul-03 Jul-05 Jul-07 Jul-09 Jul-11 Jul-13

▶Home values have fallen by -0.4% over the last 12 months.▶Home values increased by 0.9% in July 2013 and have increased by 2.0% over the three months to

July 2013.▶Values of houses are unchanged over the last 12 months while the unit market saw values fall by

-4.7%.


Annual change, Hobart

Quarterly change, Hobart

Annual change, Combined capitals

Annual and quarterly change in Hobart home values

9

Annual change in home values across regional Tasmanian areas


10% plus5% to 10%0% to 5%-5% to 0%-5% or less

SD Qtr 12 mth 5 yr From peak Qtr 12 mth 5 yr From peakGreater Hobart -1.6% -2.0% -0.5% -10.8% -6.4% -0.1% -1.1% -13.4%Southern -6.3% -6.2% 8.7% -13.1% na na na naNorthern -2.5% -1.7% 0.5% -7.7% na na na naMersey-Lyell -3.3% -2.4% 0.8% -7.8% na na na na

HOUSES UNITS

Note: capital city values are up to July 2013 whereas all other markets are to June 2013. 5 yr figure is the 5 yr average annual change and from peak indicates the change from the market peak, if 0.0% it means values are currently at their record high.

10

Hobart sales activity is moving higher from a very low base

020406080

100120140160180

May 93 May 95 May 97 May 99 May 01 May 03 May 05 May 07 May 09 May 11 May 13

Monthly Rolling five year average

0

100

200

300

400

500

600

May 93 May 95 May 97 May 99 May 01 May 03 May 05 May 07 May 09 May 11 May 13

Monthly Rolling five year average

▶Based on current estimates by RP Data, Hobart recorded 919 house sales and 268 unit sales over the three months to May 2013.

▶House sales over the three months to May 2013 are estimated to be 37.3% higher than at the same time last year.

▶Across the unit market, it is estimated sales activity over the three months is 39.8% higher than in 2012.

Source: rpdata Note: the last eight months of sales volumes are modelled based on historic levels of revision

Monthly number of house sales - Hobart

Monthly number of units sales - Hobart

11

Vendors offering greater discounts in order to make a sale

▶The rate of vendor discounting across Hobart moved lower in June to be recorded at -10.7% (compared with -10.1% a year prior).

▶Average selling time has improved from the seasonal highs recorded earlier in the year but remains elevated at 80 days. Despite the high reading, selling time is faster than a year ago (99 days).

▶The deterioration in vendor discounting at a time when homes are selling faster suggests that vendors are becoming more willing to lower their price expectations in order to make a sale.

Source: rpdata Note: the last eight months of sales volumes are modelled based on historic levels of revision

Average vendor discount, Hobart

Average number of days on market, Hobart

Combined capitals benchmark

Combined capitals benchmark

12

Rental conditions remain relatively flat in Hobart

▶The median asking rent on a Hobart house has increased by 0.6% over the past twelve months while unit rents are down 2.0% over the year.

▶Gross rental yields have seen a modest improvement over the past year, up from 5.1% to 5.2%.▶Gross rental yields in Hobart are now well above the capital city average.



13

Rental conditions remain relatively flat in Hobart

▶The median asking rent on a Hobart house has increased by 0.6% over the past twelve months while unit rents are down 2.0% over the year.

▶Gross rental yields have seen a modest improvement over the past year, up from 5.1% to 5.2%.▶Gross rental yields in Hobart are now well above the capital city average.


Gross yield: Houses

Gross yield: Units


14

1.98 million apartments and townhomes nationally

Source: rpdata , ABS Census

15

1.98 million apartments and townhomes nationally

24,845 or 1.3% of them are in Tasmania


16

The potential depth of the Tasmanian strata management market is roughly comparable with the Northern Territory and the Australian Capital Territory


Total number of semi-detached and apartments within each state

17

+14% overpast decade

+28%over pastdecade

+26% over past decade

The number of medium density dwellings are growing at much faster rate than detached dwelling numbers


18


+28%over pastdecade



+12%over past

decade


The number of medium density dwellings are growing at much faster rate than detached dwelling numbers

The same is true in Tasmania but not to quite the same extent, particularly

for semi-attached dwellings.


19

Where are the largest strata markets and where is the opportunity?

Total number of medium to high density dwellings by council region

Change in total number of medium to high density dwellings by council region

▶Hobart has the largest number of medium and high density dwellings at 6,573, followed by Launceston and Glenorchy (4,567 and 3,895).

▶Hobart has also shown the greatest level of opportunity for new business over the past decade with 424 more medium to high density dwellings compared with the 2001 Census.

▶Clarence (289), Brighton (263) and Kingborough (221) have also shown a comparatively large increase in medium to high density dwellings.


20

Number of apartment projects in the planning stage, National

Where’s the pipeline?

▶Based on data from Cordell’s to April this year, a record number of new apartment developments are currently in the ‘Planning’ stage.

Source: rpdata , Cordell

21

Number of apartment projects in the planning stage, National

Where’s the pipeline?

▶Based on data from Cordell’s to April this year, a record number of new apartment developments are currently in the ‘Planning’ stage nationally.

▶Most are in Victoria, however the value of new projects in planning is highest in Queensland.

▶Tasmania is punching below its weight, attracting just 0.2% of the total number of planned apartment projects and 0.3% of the value.

#

$

Source: rpdata , Cordell

22

Factors driving take up of strata product

▶Affordability Across every city unit prices tend to be significantly more affordable than house prices.

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000

Canberra

Sydney

Perth

Melbourne

Brisbane

Australian Capitals

Darwin

Adelaide

Hobart

Difference between median house and unit selling prices – 3 months to Jul-13

Capital city Houses UnitsSydney $645,000 $500,000Melbourne $530,000 $435,000Brisbane $450,000 $373,500Adelaide $395,000 $332,500Perth $510,000 $415,000Hobart $315,300 $270,000Darwin $520,000 $457,500Canberra $555,000 $409,975Australian Capitals $513,000 $440,000

Capital city median prices

Source: rpdata -Rismark

23


▶Investment return The yield profile for investors is generally substantially higher for unit stock compared with detached housing.

Gross rental yield, houses versus units

Source: rpdata -Rismark

24

Age cohorts, % of Tasmanian population 2001 versus 2011 33% (almost 35,000) more

residents aged 55+ over past decade

[Total population growth over decade

was 7.0%]


▶Downsizing Changing lifestyle preferences across different age cohorts of the population


25

Age cohorts, % of Tasmanian population 2001 versus 2011 33% (almost 35,000) more

residents aged 55+ over past decade

[Total population growth over decade

was 7.0%]


▶Downsizing Changing lifestyle preferences across different age cohorts of the population

Population change by age cohort, Tasmania 2001 to 2011


26


▶Higher rate of natural increase More families means more demand for housing at a time when affordability pressures remain strong.

Rate of natural increase, National

Source: rpdata , ABS

27





Rate of natural increase, Tasmania

28





Components of population growth, Tasmania (qtrly change)

29The rpdata Advantage

Detailed statistics for selected council

regions

30

Clarence Council regionHOUSES Median price Num sales

Median price Jun 2013 $340,000 681Median price Jun 2012 $350,000 707Median price Jun 2008 $330,000 964

Change over past year -2.9% -3.7%Change over 5 years 3.0% -29.4%

UNITS Median price Num salesMedian price Jun 2013 $283,500 169Median price Jun 2012 $285,000 156Median price Jun 2008 $265,000 208

Change over past year -0.5% 8.3%Change over 5 years 7.0% -18.8%

Houses UnitsJun-13 -8.0% -8.7%Jun-12 -7.5% -5.7%Jun-08 -4.5% -2.1%

Houses UnitsJun-13 94 108Jun-12 73 57Jun-08 27 18

Houses UnitsJun-13 $325 $275Jun-12 $325 $270Jun-08 - -

Median discount

Median selling time

Median weekly rent

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

050

100150200250300350400450500

Jun 93 Jun 95 Jun 97 Jun 99 Jun 01 Jun 03 Jun 05 Jun 07 Jun 09 Jun 11 Jun 13

Med

ian

selli

ng p

rice

Num

ber o

f sal

es (r

ollin

g 3

mon

th)

Median house and unit price and number of sales over time

Number of sales (rolling 3 month) (LHS) Median house price (RHS) Median unit price (RHS)

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13

Median vendor discount, houses and units

Houses Units

0

20

40

60

80

100

120


Median days on market, houses and unitsHouses Units

improving

worsening

worsening

improving

$200$220$240$260$280$300$320$340$360

Jun 09 Jun 10 Jun 11 Jun 12 Jun 13

Median weekly rent, houses and unitsHouses Units

31

Devonport Council regionHOUSES Median price Num sales


Change over past year -6.1% 6.5%Change over 5 years -0.2% -33.9%



Houses UnitsJun-13 -11.1% -10.6%Jun-12 -8.2% -6.1%Jun-08 -4.8% 0.0%



Median discount

Median selling time

Median weekly rent

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

0

50

100

150

200

250

300

350


Med

ian

selli

ng p

rice

Num

ber o

f sal

es (r

ollin

g 3

mon

th)



-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%



Houses Units

020406080

100120140160



improving

worsening

worsening

improving

$180

$200

$220

$240

$260

$280



32

Glenorchy Council regionHOUSES Median price Num sales








Median discount

Median selling time

Median weekly rent

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

050

100150200250300350400450500


Med

ian

selli

ng p

rice

Num

ber o

f sal

es (r

ollin

g 3

mon

th)



-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%



Houses Units

0

20

40

60

80

100



improving

worsening

worsening

improving

$200

$220

$240

$260

$280

$300

$320



33

Hobart Council regionHOUSES Median price Num sales


Change over past year 0.0% 2.4%Change over 5 years 7.1% -21.5%


Change over past year 3.8% -3.8%Change over 5 years 16.3% -45.6%




Median discount

Median selling time

Median weekly rent

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

0

100

200

300

400

500

600


Med

ian

selli

ng p

rice

Num

ber o

f sal

es (r

ollin

g 3

mon

th)



-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%



Houses Units

0

20

40

60

80

100



improving

worsening

worsening

improving

$200

$250

$300

$350

$400

$450



34

Kingborough Council regionHOUSES Median price Num sales


Change over past year -1.4% 0.2%Change over 5 years 7.0% -25.3%


Change over past year -7.6% -15.1%Change over 5 years -2.4% -20.4%




Median discount

Median selling time

Median weekly rent

$0$50,000$100,000$150,000$200,000$250,000$300,000$350,000$400,000$450,000

0

50

100

150

200

250

300

350


Med

ian

selli

ng p

rice

Num

ber o

f sal

es (r

ollin

g 3

mon

th)



-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%



Houses Units

0

20

40

60

80

100

120



improving

worsening

worsening

improving

$200

$250

$300

$350

$400



35

Launceston Council regionHOUSES Median price Num sales

Median price Jun 2013 $250,100 876Median price Jun 2012 $257,000 939Median price Jun 2008 $230,000 1,298







Median discount

Median selling time

Median weekly rent

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

0

100

200

300

400

500

600

700

800


Med

ian

selli

ng p

rice

Num

ber o

f sal

es (r

ollin

g 3

mon

th)



-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%



Houses Units

0

20

40

60

80

100

120



improving

worsening

worsening

improving

$180

$200

$220

$240

$260

$280

$300



36

About Us

RP Data is 100% owned by CoreLogic which is a leading provider of consumer, financial and property information, analytics and services to business and government. The company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. Today, CoreLogic has more than 6,000 employees globally with 2012 revenues of $1.6 billion and is listed on the NYSE.

At RP Data, we continually collect, manage and process property-based data and imagery from over 300 sources across Australia including government agencies, media partners and industry professionals. RP Data is the biggest provider of property information, analytics and risk management services in Australia and New Zealand with a database of 210 million property records. RP Data serves customers ranging from real estate agents and consumers to banks, mortgage brokers, financial planners and governments.

We understand that data is most useful when it’s presented as relevant and actionable analytics. Our data provides customers with insights that realise more market opportunities, while simultaneously growing businesses and managing risk. Our results speak for themselves; we’re helping over 100,000 end users including approximately 45,000 real estate agents win more business by providing Australia’s most trusted pre-listings comparative market appraisal (CMA) report, as well as industry standard tools that promote transparency and confidence when buying and selling property. In addition, 1 million consumers use RP Data to make important decisions about property they are about to hold, sell or purchase. Our Mortgage Platforms cover more than 90% of the mortgage lending activity in Australia. We estimate the value of every residential property in Australia each week via our automated valuation models which support our industry leading RP Data Rismark Daily Home Value Index. On average, we issue over 30 million automated valuation assessments every month. We’re Australia’s leading source for mobile property information too – with over 500,000 mobile devices accessing our services each month.Using public and proprietary data, we bring insight and transparency to the Australian property market. We employ 330 people at ten locations in Australia and New Zealand and our revenue for 2012 was over $70 million.

For more information call 1300 734 318

37

In compiling this publication, RP Data has relied upon information supplied by a number of external sources. The publication is supplied on the basis that while the RP Data believes all the information in it is deemed reliable at the time of publication, it does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever and limits any liability it may have to the amount paid to RP Data for the supply of such information.

This data cannot be reproduced without the permission of RP Data.

Queensland Data© The State of Queensland (Department of Environment and Resource Management) 2012. Based on data provided with the permission of the Department of Natural Resources and Mines: [QVAS 2012)]. The Department of Environment and Resource Management makes no representations or warranties about accuracy, reliability, completeness or suitability of the data for any particular purpose and disclaims all responsibility and all liability (including without limitation, liability in negligence) for all expenses, losses and damages (including indirect or consequential damage) and costs which might be incurred as a result of the data being inaccurate or incomplete in any way and for any reason.

South Australian DataThis information is based on data supplied by the South Australian Government and is published by permission. The South Australian Government does not accept any responsibility for the accuracy or completeness of the published information or suitability for any purpose of the published information or the underlying data.

New South Wales DataContains property sales information provided under licence from the Land and Property Information (“LPI”). RP Data is authorised as a Property Sales Information provider by the LPI.

Victorian DataTo the extent that this report has been developed using information owned by the State of Victoria, the State of Victoria owns the copyright in the Property Sales Data which constitutes the basis of this report and reproduction of that data in any way without the consent of the State of Victoria will constitute a breach of the Copyright Act 1968 (Cth). The State of Victoria does not warrant the accuracy or completeness of the information contained in this report and any person using or relying upon such information does so on the basis that the State of Victoria accepts no responsibility or liability whatsoever for any errors, faults, defects or omissions in the information supplied.

Western Australian DataBased on information provided by and with the permission of the Western Australian Land Information Authority (2012) trading as Landgate.

Australian Capital Territory DataThe Territory Data is the property of the Australian Capital Territory. No part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be directed to: Director, Customer Services ACT Planning and Land Authority GPO Box 1908 Canberra ACT 2601.

Tasmanian DataThis product incorporates data that is copyright owned by the Crown in Right of Tasmania. The data has been used in the product with the permission of the Crown in Right of Tasmania. The Crown in Right of Tasmania and its employees and agents:

a) give no warranty regarding the data's accuracy, completeness, currency or suitability for any particular purpose; andb) do not accept liability howsoever arising, including but not limited to negligence for any loss resulting from the use of or reliance upon the data.

Base data from the LIST © State of Tasmania http://www.thelist.tas.gov.au

38

It’s about tangible results for property professionals everyday.

Housing and strata market update August 2013. 2 Residential Real Estate Absolutely Underpins...

Documents

Transcript of Housing and strata market update August 2013. 2 Residential Real Estate Absolutely Underpins...