Monthly Property Market and Economic Update. April 2014

Transcription

1 Monthly Property Market and Economic Update April 2014

2 Residential Real Estate Absolutely Underpins Australia s Wealth Position Residential Real Estate $5.2 Trillion Australian Superannuation $1.5 Trillion $1.8 Trillion (SMSF $543.4 Billion) Australian Commercial Listed Real Stocks Estate $1.5 $0.7 Trillion Commercial Real Estate $0.7 $0.7 Trillion 2

3 Annual change in dwelling value Each capital city has recorded value growth over the year however, Sydney and Melbourne have been the primary drivers Combined capital city home values increased by 10.6% over the 12 months to March Sydney (15.6%) and Melbourne (11.6%) have been the primary drivers for capital gains over the year, while home values have grown by less than 5% in all other capital cities. 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 15.6% Annual change in capital city dwelling values, to March % 10.6% Sydney Melbourne Australian Capitals 4.8% 4.7% 4.6% 3.8% 1.7% 0.9% Brisbane Perth Adelaide Darwin Canberra Hobart 3 Source: RP Data - Rismark

4 Quarterly change in dwelling value Home values rose throughout the first quarter of 2014 in each capital city except for Perth Combined capital city home values have increased by 3.5% over the first quarter of Melbourne(5.4%), Hobart (4.7%) and Sydney (4.4%) have each recorded value growth of more than 4.0% over the first quarter of % 5.0% 5.4% Change in capital city dwelling values, 3 months to March % 4.4% 4.0% 3.5% 3.0% 2.0% 1.0% 2.8% 2.0% 1.5% 1.2% 0.0% -1.0% Melbourne Hobart Sydney Australian Capitals -0.6% Darwin Canberra Brisbane Adelaide Perth 4 Source: RP Data - Rismark

5 Home values are now 7.2% higher than they were at the time of their previous peak across the combined capital cities Combined capital city home values are now 7.2% higher than they were at their previous peak (October 2010), largely driven by significant capital gains across the Sydney market. Values in Sydney (15.8%), Melbourne (4.7%) Perth (2.9%) and Canberra (1.2%) are above their previous peaks. 20.0% 15.0% Change in home values from their previous peak to March % 10.0% 7.2% 5.0% 1.2% 2.9% 4.7% 0.0% -5.0% -10.0% -1.2% -5.2% -5.1% -7.9% Hobart Brisbane Darwin Adelaide Canberra Perth Melbourne Sydney Australian capitals 5 Source: RP Data - Rismark

6 Units provide a much more affordable entry point to the housing market Across the combined capital cities, the median selling price of units is currently $83,500 lower than the median selling price of houses. In Sydney ($160,500), Canberra ($147,875), Hobart ($123,500), Melbourne ($107,000), Darwin ($104,000) and Perth ($103,750) the gap in pricing is in excess of $100,000. Difference between median house and unit selling prices 3 months to Mar-14 Adelaide Australian Capitals Brisbane Perth Darwin Melbourne Hobart Canberra Sydney $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 6 Capital city median prices Capital city Houses Units Sydney $713,000 $552,500 Melbourne $555,000 $448,000 Brisbane $460,000 $368,000 Adelaide $411,750 $330,000 Perth $533,750 $430,000 Hobart $376,000 $252,500 Darwin $575,000 $471,000 Canberra $562,875 $415,000 Australian Capitals $535,000 $451,500 Source: RP Data - Rismark

7 The combined capital city index is showing strong capital gains on an annual basis Housing market conditions across the combined capital cities have been improving since June 2012 after a 7.7% peak to trough decline which lasted nineteen months. Capital city home values haven t fallen for 10 months and values across the eight capital city aggregate are 10.6% higher than a year ago and 15.8% higher than their recent trough. 25.0% Annual and quarterly change in capital city home values 20.0% 15.0% 10.0% Annual change 5.0% 0.0% Quarterly change -5.0% -10.0% Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 7 Source: RP Data - Rismark

8 Avg annual value growth last decade Perth and Darwin have been the standout cities for capital gains over the past decade Capital city home values have increased at an average annual rate of 4.5% over the ten years to March Hobart, Sydney, Canberra and Brisbane have each recorded average annual growth of less than 4.0% over the past decade. 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2.7% Average annual change in property values past ten years to March % 3.5% 3.6% 4.1% Hobart Sydney Canberra Brisbane Adelaide Melbourne Perth Darwin Australian capitals 6.1% 7.6% 8.8% 4.5% 8 Source: RP Data - Rismark

9 Avg annual value growth last 5 years Sydney and Melbourne have recorded a far superior rate of value growth over the past five years compared to the decade Capital city home values have increased at an average annual rate of 4.6% over the five years to March The 4.6% annual increase in home values over the past five years is largely being driven by Sydney and Melbourne with most cities recording annual growth of less than 3.5%. 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% Average annual change in property values past five years to March % 0.3% 1.6% 2.4% 3.3% 4.6% 6.3% 6.4% Hobart Brisbane Adelaide Perth Canberra Darwin Sydney Melbourne Australian capitals 4.6% 9 Source: RP Data - Rismark

10 The premium sector of the housing market has recorded the greatest value rises over the past year Across the 12 months to March 2014, the most expensive sector of the housing market has been the best performer and the most affordable markets have been the weakest. Over the year, the most affordable suburbs have recorded value increases of 9.1% compared to 10.8% across the middle market and an 11.2% increase across the most expensive suburbs. 25.0% 20.0% Annual change in values across market segments to March 2014 Bottom 25% Middle 50% Top 25% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% Mar-02 Mar-05 Mar-08 Mar-11 Mar-14 Source: RP Data - Rismark 10

11 National home sales over the three months to January 2014 were 13.1% higher compared with the same period in 2013 Monthly number of house sales - national 45,000 40,000 Monthly Rolling five year average 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Monthly number of unit sales - national 20,000 15,000 10,000 5,000 Monthly Rolling five year average 0 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 RP Data estimates that over the 3 months to January 2014, there were 81,879 house sales and 29,575 unit sales nationally. Estimated houses sales over the three months to January 2014 were 13.9% higher than they were over the same period in Estimated unit sales were 11.1% higher over the past three months than they were over the same period in Source: RP Data Note: the last eight months of sales volumes are modelled based on historic levels of revision

12 Gross rental yields are continuing to erode as value growth outpaces rental growth Across the combined capital cities, rents sit at $483/week for houses and $452/week for units. Capital city rents have increased by 2.3% for houses and by 3.2% for units over the past 12 months. Gross rental yields are currently recorded at 3.8% for houses and 4.6% for units. 9.0% 8.0% Median weekly rent Capital city rental rates and gross yields Gross rental yield $500 $ % $ % 5.0% $ % $ % $ % $200 Mar-96 Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: RP Data - Rismark 12

13 Rental growth remains subdued apart from Sydney Sydney Melbourne Brisbane Adelaide Perth Hobart Median rent Qtr change 12 mth change Rental yield Houses $ % 4.1% 3.8% Units $ % 4.3% 4.6% Houses $ % 2.5% 3.3% Units $ % 1.6% 4.1% Houses $ % 2.0% 4.5% Units $ % -0.2% 5.5% Houses $ % 1.5% 4.3% Units $ % 1.1% 4.7% Houses $ % -0.4% 4.2% Units $ % 2.3% 4.7% Houses $ % 1.2% 5.2% Units $ % 0.7% 4.9% Across the combined capital cities, rents sit at $483/week for houses and $452/week for units. Capital city rents have increased by 2.3% for houses and by 3.2% for units over the past 12 months. Gross rental yields are currently recorded at 3.8% for houses and 4.6% for units. Rental growth has been strongest over the past year in Sydney, Melbourne and Darwin. Rental pressures have been much lower in all other cities. Darwin Canberra Houses $ % 2.2% 5.9% Units $ % 1.5% 6.2% Houses $ % -3.1% 4.3% Units $ % -5.8% 5.1% Darwin has the strongest rental yields while Melbourne has the softest. 13 Source: RP Data - Rismark

14 Private treaty indicators suggest buyers continue to lose leverage as homes sell faster and vendors offer less discount Average days on market, combined capitals Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Average vendor discount, combined capitals 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% -7.0% -8.0% -9.0% Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb : 51 days 2013: 70 days Note January and February show a seasonal uplift in average selling time 2014: -5.6% 2013: -6.2% 14 Source: RP Data - Rismark

15 The number of residential properties available for sale has not returned to the levels of late 2013 There are currently 243,941 residential properties being advertised for sale nationally; 102,767 of these listings are located within the capital cities. New listings are 18.9% higher than at the same time last year and 28.8% higher across the capitals. Total listings are -3.8% lower than at the same time last year and -8.3% lower than last year across the capital cities. 350, , , , , ,000 50,000 Total listings National number of properties advertised for sale New listings Source: RP Data 0 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 15

16 Auction clearance rates remain at high levels Auction clearance rates have started 2014 strongly with a week-to-week average of 70.4%. Capital city auction clearance rates were recorded at a week-to-week average of 66.3% in Over the year to-date, the week-to-week average auction clearance rate has been recorded at 70.6% in Melbourne and 78.9% in Sydney. 90.0% Rolling 4 week average combined capital city auction clearance rates 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Source: RP Data 16

17 RP Data s Mortgage Index is continuing to rebound from its seasonal slowdown The RP Data Mortgage Index (RMI) tracks metadata flowing across RP Data s mortgage platforms, which account for more than 90% of all finance sector residential valuation instructions. The Index continues to rebound from seasonal lows indicating ongoing strong levels of mortgage demand. Source: RP Data RP Data Mortgage Index, National RP Data Mortgage Index RP Data Mortgage Index (rolling three month trend) Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 17

18 Real estate agent activity across RP Data platforms is slipping from record highs The RP Data Listings Index (RLI) provides a lead indicator for the number of new listings about to enter the market. The index is based on the metadata that flows across RP Data s online real estate data platforms which account for about 70-80% of all real estate agent traffic nationally. The correlation with new listings being added to the market is high, which indicates that new listing activity will continue to fall over the coming weeks. 450 RP Data Listings Index, National Source: RP Data Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 18

19 Key housing market indicators, New South Wales

20 Annual change in home values across regional New South Wales areas 10% plus 5% to 10% 0% to 5% -5% to 0% -5% or less Source: RP Data - Rismark 20 HOUSES UNITS SD Qtr 12 mth 5 yr From peak Qtr 12 mth 5 yr From peak Sydney 4.8% 16.4% 6.5% 0.0% 2.9% 12.2% 5.3% 0.0% Hunter 5.0% 11.1% 5.6% 0.0% 1.0% 4.2% 3.3% -0.8% Illawarra 3.1% 4.6% 3.6% 0.0% 0.7% 5.7% 5.5% 0.0% Richmond-Tweed 6.4% 2.3% 1.8% 0.0% 1.0% 3.0% -1.2% -9.2% Mid-North Coast 2.0% 6.1% 2.7% 0.0% 1.3% 0.8% 1.7% -0.2% Northern 5.3% 10.3% 9.7% 0.0% na na na na North Western 2.1% 8.8% 6.0% -0.2% na na na na Central West 4.7% 5.6% 5.3% 0.0% na na na na South Eastern 2.5% 6.4% 3.4% -0.1% 1.7% 3.4% 3.7% -0.2% Murrumbidgee 4.2% 7.2% 3.4% 0.0% na na na na Murray 5.6% 9.3% 5.8% 0.0% na na na na Far West 3.3% 9.8% 5.9% 0.0% na na na na Note: capital city values are up to March 2014 whereas all other markets are to February 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.

21 Sydney dwellings continue to outperform the broader capital city average for value growth Over the past year, Sydney home values have increased by 15.6%. Sydney home values have risen by 4.4% over the first quarter of 2014 and by 2.8% over the month of March. House values have increased by 16.4% over the year compared to a 12.2% increase in unit values. 30.0% Annual and quarterly change in Sydney home values 25.0% 20.0% 15.0% 10.0% 5.0% Annual change, Sydney Annual change, Combined capitals 0.0% -5.0% Quarterly change, Sydney -10.0% Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: RP Data - Rismark 21

22 House sales in Sydney have trended much higher over the past year as value growth has escalated Monthly number of house sales - Sydney 10,000 Monthly Rolling five year average 8,000 6,000 4,000 2,000 0 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Monthly number of unit sales - Sydney 7,000 Monthly Rolling five year average 6,000 5,000 4,000 3,000 2,000 1,000 0 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 RP Data estimates that over the three months to January 2014, there were 13,603 house sales and 8,402 unit sales across Sydney. Estimated houses sales are 21.0% higher over the three months to January 2014 than they were over the same period in Estimated unit sales are 10.2% higher than they were over the same three month period a year ago. 22 Source: RP Data Note: the last eight months of sales volumes are modelled based on historic levels of revision

23 Key housing market indicators, Victoria

24 Annual change in home values across regional Victorian areas HOUSES UNITS SD Qtr 12 mth 5 yr From peak Qtr 12 mth 5 yr From peak Melbourne 5.8% 11.9% 6.6% 0.0% 2.5% 8.9% 5.2% 0.0% Barwon 2.7% 2.3% 5.1% -0.2% 2.2% 0.6% 2.8% -3.6% Western District 2.0% 2.7% 7.0% -1.0% na na na na Central Highlands 2.2% 4.0% 4.7% 0.0% na na na na Wimmera 4.8% 2.9% 5.4% -0.4% na na na na Mallee 1.4% 4.0% 4.0% 0.0% na na na na Loddon 2.4% 5.5% 7.5% 0.0% na na na na Goulburn 1.4% 4.4% 4.4% -0.6% na na na na Ovens-Murray 1.0% 2.1% 2.0% -0.5% na na na na East Gippsland 1.8% 1.8% 3.4% 0.0% 0.8% na na na Gippsland 0.6% 3.0% 3.8% -1.3% na na na na Note: capital city values are up to March 2014 whereas all other markets are to February 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% plus 5% to 10% 0% to 5% -5% to 0% -5% or less 24 Source: RP Data - Rismark

25 Home Heading values in Melbourne have recorded the second largest increases of all capital cities over the past year Over the last 12 months, Melbourne dwelling values have increased by 11.6%. Home values increased by 2.3% in March and have risen by 5.4% over the first quarter of the year. House values have increased by 11.9% over the past year compared to an 8.9% increase in unit values. 30.0% Annual and quarterly change in Melbourne home values 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% Annual change, Melbourne Quarterly change, Melbourne Annual change, Combined capitals -10.0% Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: RP Data - Rismark 25

26 Melbourne house sales were at similar levels throughout 2013 to those reached in 2009 Monthly number of house sales - Melbourne 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Monthly Rolling five year average 0 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Monthly number of unit sales - Melbourne 4,500 4,000 Monthly Rolling five year average 3,500 3,000 2,500 2,000 1,500 1, Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Based on RP Data s estimates, there were 13,045 Melbourne house sales over the three months to January 2014 and 5,741 unit sales. Based on these estimates, Melbourne house sales were 10.0% higher over the most recent three months than over the three months to January Unit sales estimates are 17.0% higher than over the corresponding three month period in Source: RP Data Note: the last eight months of sales volumes are modelled based on historic levels of revision

27 Key housing market indicators, Queensland

28 Annual change in home values across regional Queensland areas 10% plus 5% to 10% 0% to 5% -5% to 0% -5% or less HOUSES UNITS SD Qtr 12 mth 5 yr From peak Qtr 12 mth 5 yr From peak Brisbane 1.7% 5.1% 0.3% -5.0% 0.3% 1.7% 0.8% -7.0% Gold Coast 2.1% 4.7% -0.8% -4.8% 1.2% -0.8% -2.3% -11.9% Sunshine Coast 2.1% 2.0% -0.4% -3.7% 2.2% 1.4% -1.6% -9.0% West Moreton 1.0% -2.2% -1.5% -9.3% na na na na Wide Bay-Burnett 1.2% -1.1% -2.5% -12.3% -2.3% -3.0% -3.3% -16.6% Darling Downs 1.9% 3.2% 1.9% -0.1% 0.2% 0.0% -3.8% -21.4% South West 1.9% 3.2% 0.8% 0.0% na na na na Fitzroy 1.1% -3.6% 1.7% -4.8% na na na na Central West 1.9% 3.2% 0.8% 0.0% na na na na Mackay -0.4% 0.7% 3.1% -3.8% na na na na Northern 0.3% -1.8% -0.6% -5.5% -2.3% -10.4% -4.5% -25.8% Far North 2.6% 4.5% 0.7% -0.3% 0.6% -0.6% -2.8% -14.2% North West 1.9% 3.2% 0.8% 0.0% na na na na Note: capital city values are up to March 2014 whereas all other markets are to February 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. 28 Source: RP Data - Rismark

29 Brisbane home values continue to rise but at a much slower pace than those in Sydney and Melbourne Brisbane home values increased by 4.8% over the twelve months to March Home values increased by 2.9% in march 2014 and they are 1.5% higher over the past three months. Over the past twelve months, house values have increased by 5.1% compared to a 1.7% increase in unit values. 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% Annual change, Brisbane Annual change, Combined capitals Quarterly change, Brisbane -10.0% Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: RP Data - Rismark Annual and quarterly change in Brisbane home values 29

30 The Heading number of home sales across Brisbane is trending higher but they remain low on an historic basis Monthly number of house sales - Brisbane 7,000 6,000 Monthly Rolling five year average 5,000 4,000 3,000 2,000 1,000 0 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Monthly number of unit sales - Brisbane 2,500 Monthly 2,000 1,500 1, Rolling five year average Based on RP Data s estimates, there were 7,742 Brisbane house sales over the three months to January 2014 and 2,982 unit sales. Based on these estimates, Brisbane house sales were 21.0% higher over the past three months than over the same period in Unit sales estimates are 8.3% higher than over the same three month period 12 months ago. 0 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan Source: RP Data Note: the last eight months of sales volumes are modelled based on historic levels of revision

31 Key housing market indicators, South Australia

32 Annual change in home values across regional South Australian areas HOUSES UNITS SD Qtr 12 mth 5 yr From peak Qtr 12 mth 5 yr From peak Adelaide 1.0% 4.9% 1.7% -0.9% 3.7% 0.8% 0.5% -6.5% Outer Adelaide 1.9% 1.8% 2.2% -0.6% na na na na Yorke and Lower North 4.4% -2.5% 0.0% -12.3% na na na na Murray Lands -0.4% 0.5% 0.1% -6.0% na na na na South East 1.8% 1.2% 0.8% -6.2% na na na na Eyre 0.3% 0.2% 1.0% -4.3% na na na na Northern 2.0% 1.4% 0.4% -3.8% na na na na Note: capital city values are up to March 2014 whereas all other markets are to February 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% plus 5% to 10% 0% to 5% -5% to 0% -5% or less Source: RP Data - Rismark 32

33 30.0% Adelaide home values are trending higher albeit at a fairly moderate pace to-date Home values in Adelaide have increased by 4.6% over the twelve months to March Adelaide home values rose by 1.4% in March and were 1.2% higher over the first three months of House values have increased by 4.9% over the past year compared to a 0.8% increase in unit values. Annual and quarterly change in Adelaide home values 25.0% 20.0% 15.0% 10.0% 5.0% Annual change, Combined capitals Annual change, Adelaide 0.0% -5.0% Quarterly change, Adelaide -10.0% Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: RP Data - Rismark 33

34 Adelaide Heading house and unit sales are sitting slightly above five year average levels Monthly number of house sales - Adelaide 3,000 2,500 Monthly Rolling five year average 2,000 1,500 1, Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Monthly number of unit sales - Adelaide 1,000 Monthly Rolling five year average Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 RP Data estimates that there were 5,289 Adelaide house sales over the three months to January 2014 and 1,601 unit sales. Adelaide house sales over the past three months are estimated to be 17.0% higher than they were over the three months to January Sales estimates for units indicate that sales activity over the most recent three months is 12.7% higher than the same period a year ago. 34 Source: RP Data Note: the last eight months of sales volumes are modelled based on historic levels of revision

35 Key housing market indicators, Western Australia

36 Annual change in home values across regional Western Australian areas HOUSES UNITS SD Qtr 12 mth 5 yr From peak Qtr 12 mth 5 yr From peak Perth -1.0% 4.5% 2.4% 0.0% 4.0% 8.6% 2.5% 0.0% South West 2.9% 6.1% 4.2% -0.5% 5.3% 7.9% 7.3% -0.2% Lower Great Southern 5.2% 2.0% 0.7% -4.1% na na na na Upper Great Southern 3.4% 9.3% 5.5% -0.3% na na na na Midlands -9.2% -12.2% -0.1% -25.7% na na na na South Eastern 2.6% -0.9% 0.4% -0.9% na na na na Central 4.7% 10.8% 9.2% -2.8% na na na na Pilbara 3.4% 9.3% 5.5% -0.3% na na na na Kimberley 3.4% 9.3% 5.5% -0.3% na na na na Note: capital city values are up to March 2014 whereas all other markets are to February 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% plus 5% to 10% 0% to 5% -5% to 0% -5% or less Source: RP Data - Rismark 36

37 The rate of home value growth in Perth has started to slow quite sharply Perth home values have increased by 4.6% over the past year. Perth s home values increased by 0.6% in March and fell by -0.6% over the first quarter of the year. House values have increased by 4.5% over the past year compared to an 8.6% lift in unit values. 50.0% 40.0% Annual and quarterly change in Perth home values Annual change, Perth 30.0% 20.0% Annual change, Combined capitals 10.0% 0.0% Quarterly change, Perth -10.0% Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: RP Data - Rismark 37

38 Transaction activity in Perth may have peaked with sales trailing off over the second half of 2013 Monthly number of house sales - Perth 5,000 4,000 3,000 2,000 1,000 0 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 1,200 Monthly 1, Monthly Rolling five year average Monthly number of unit sales - Perth Rolling five year average RP Data estimates that there were 8,044 Perth house sales over the three months to January 2014 and 1,673 unit sales. Perth house sales are currently estimated to be 0.2% higher than over the same three month period in Sales estimates for units indicate that sales activity over the most recent three months is -8.8% lower than a year ago. 0 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan Source: RP Data Note: the last eight months of sales volumes are modelled based on historic levels of revision

39 Key housing market indicators, Tasmania

40 Annual change in home values across regional Tasmanian areas HOUSES UNITS SD Qtr 12 mth 5 yr From peak Qtr 12 mth 5 yr From peak Greater Hobart 3.7% 0.7% -0.6% -8.7% 15.1% 2.4% -0.2% -5.2% Southern -0.9% 3.4% 8.5% -2.9% na na na na Northern 0.5% 0.1% 0.2% -4.9% na na na na Mersey-Lyell 2.0% 0.5% 0.8% -0.8% na na na na Note: capital city values are up to March 2014 whereas all other markets are to February 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% plus 5% to 10% 0% to 5% -5% to 0% -5% or less Source: RP Data - Rismark 40

41 Hobart has recorded stronger value growth over recent months perhaps indicating an improvement in market conditions Hobart home values have increased by 0.9% over the last 12 months. Home values increased by 1.2% in March and have increased by 4.7% over the past three months. Values of houses have increased by 0.7% over the last 12 months while the unit market saw values increase by 2.4%. 70.0% 60.0% 50.0% Annual and quarterly change in Hobart home values Annual change, Hobart 40.0% 30.0% 20.0% 10.0% Annual change, Combined capitals 0.0% -10.0% Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: RP Data - Rismark Quarterly change, Hobart 41

42 Hobart sales activity has fallen to below average levels over recent months Monthly number of house sales - Hobart Monthly Rolling five year average Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Monthly number of unit sales - Hobart Monthly Rolling five year average Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Based on current estimates by RP Data, Hobart recorded 679 house sales and 224 unit sales over the three months to January House sales over the three months to January 2014 are estimated to be -8.4% lower than at the same time last year. Across the unit market, it is estimated sales activity over the three months is 13.5% higher than in Source: RP Data Note: the last eight months of sales volumes are modelled based on historic levels of revision

43 Key housing market indicators, Darwin

44 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% Darwin s housing market conditions have softened after significant capital gains over the past decade Home values across the city have increased by 3.8% over the past year. Home values increased by 3.3% over March 2014 and they have increased by 2.8% over the past three months. House values have increased by 4.2% over the past year compared to a 2.3% increase in unit values % Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: RP Data - Rismark Annual and quarterly change in Darwin home values Annual change, Combined capitals Quarterly change, Darwin Annual change, Darwin 44

45 Home sales across Darwin remain around the five year average Monthly number of house sales - Darwin Monthly Rolling five year average Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Monthly number of unit sales - Darwin 200 Monthly Rolling five year average Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Based on current estimates by RP Data, Darwin recorded 556 house sales and 313 unit sales over the three months to January Over the three months to January 2014 house sales across Darwin are estimated to be 12.8% higher than at the same time the previous year. Across the unit market, it is estimated sales activity is 13.8% higher over the past three months than over the same period in Source: RP Data Note: the last eight months of sales volumes are modelled based on historic levels of revision

46 Key housing market indicators, Canberra

47 Canberra growth conditions have slowed substantially over the past six months Home values have increased by 1.7% over the past 12 months. Home values have increased by 2.2% in March 2014 and they are 2.0% higher over the past three months. Values of houses rose by 1.6% over the last 12 months compared to a 3.1% increase in unit values. 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Annual change, Canberra Annual change, Combined capitals Quarterly change, Canberra -5.0% -10.0% Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: RP Data - Rismark Annual and quarterly change in Canberra home values 47

48 Canberra Heading transaction numbers are only slightly higher than they were a year ago Monthly number of house sales - Canberra 1,000 Monthly Rolling five year average Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Monthly number of unit sales - Canberra 1,000 Monthly Rolling five year average Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 RP Data s current estimate of sales activity across Canberra shows that over the three months to January 2014 there were 1,142 house sales and 664 unit sales In comparison to activity over the three months to January 2013, current house sales across Canberra are 24.3% higher. Unit market sales transactions over the three months to January 2014 were -10.6% lower than over the same period in Source: RP Data Note: the last eight months of sales volumes are modelled based on historic levels of revision

49 Commercial data

50 Yields across Australia s non-residential markets are typically much higher than the housing market Perth Melbourne Office Adelaide Brisbane Sydney Perth 12.0 Industrial Melbourne Adelaide Brisbane Sydney Perth Melbourne Retail Adelaide Brisbane Sydney Source: RP Data, Cityscope *6 months ending February 2014

51 Commercial sales each quarter Source: CB Richard Ellis 51

52 Commercial property prime rents over time Source: CB Richard Ellis 52

53 CBD office rents and capital values Source: CB Richard Ellis 53

54 Economic overview

55 7.0% 6.0% 5.0% 4.0% Inflation Heading surprisingly high over the final quarter of 2014 pushing annual inflation to the higher end of the RBA target range All groups inflation increased by 0.8% over the December 2013 quarter and is currently recorded at an annual rate of 2.7%, however, over the past 6 months the CPI has increased at an annualised rate of 4.0%. The RBA s preferred inflation measure, the average of the weighted median and trimmed mean was recorded at 2.6% over the year. Annual change in Consumer Price Index 3.0% 2.0% RBA Target Range 1.0% 0.0% All groups -1.0% Avg of trimmed mean and weighted median Dec-93 Dec-97 Dec-01 Dec-05 Dec-09 Dec-13 Source: ABS, RP Data 55

56 Percentage change The Australian economy grew by 0.8% over the December 2013 quarter, up from 0.6% growth in the September quarter GDP rose by 0.8% over the final quarter of 2013, taking the annual growth in the Australian economy to 2.7%. The total value of economic growth over the past year has been $1.55 trillion Quarterly and annual change in GDP Quarterly change Annual change -4.0 Dec-83 Dec-86 Dec-89 Dec-92 Dec-95 Dec-98 Dec-01 Dec-04 Dec-07 Dec-10 Dec-13 Source: ABS, RP Data 56

57 Household savings remain elevated but fell quite sharply over the December 2013 quarter The household savings ratio was recorded at 9.7% over the December 2013 quarter, down from 10.5% over the previous quarter and was at its lowest level since the June 2010 quarter. The household savings ratio has been recorded at an average of 10.8% over the past five years compared to an average of 3.4% over the previous five years. 25.0% Rolling four quarter average household savings ratio 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% Dec-73 Dec-77 Dec-81 Dec-85 Dec-89 Dec-93 Dec-97 Dec-01 Dec-05 Dec-09 Dec-13 Source: ABS, RP Data 57

58 There has now been no change in official interest rates for eight months with the RBA holding firm at 2.5% in April At their April board meeting, the RBA decided to keep official rates on hold at 2.5%. The average standard variable mortgage rate is recorded at 5.95%, the discounted variable rate is 5.10% and the average three year fixed rate also sits at 5.2%. With recent positive data flows, the likelihood of further cash rate cuts is looking remote. 14.0% 12.0% Mortgage rates vs. cash rate Standard variable mortgage rates 3 yr fixed mortgage rates Cash rate 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Apr-92 Apr-94 Apr-96 Apr-98 Apr-00 Apr-02 Apr-04 Apr-06 Apr-08 Apr-10 Apr-12 Apr-14 Source: RBA, RP Data 58

59 Unemployment Rate The national unemployment rate holds steady at 6.0% in February 2014 The national unemployment rate was recorded at 6.0% in February 2014, steady over the month but up from 5.4% a year ago. The full-time unemployment rate was 6.1% over the month. The workforce participation rate was recorded at 64.8% in February, up from 64.6% in January. Tasmania has the country s highest unemployment rate at 7.4% and the ACT the lowest at 3.4%. National unemployment rate Unemployment Rate Moving annual average 12% 10% 8% TAS SA VIC QLD NSW WA NT ACT 6% 4% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% Unemployment rate (%) 2% Feb-84 Feb-87 Feb-90 Feb-93 Feb-96 Feb-99 Feb-02 Feb-05 Feb-08 Feb-11 Feb-14 Source: ABS, RP Data 59

60 Annual change in no of employed persons (,000) Full time jobs growth rebounds in February Over the 12 months to February 2014, full-time employment increased by 42,700 persons compared with an annual increase of 58,600 the previous year. Part-time employment increased by 27,100 persons over the last year compared to an increase of 135,000 persons over the same period in Annual growth in full-time and part-time employment Full-time employment Part-time employment Feb-98 Feb-00 Feb-02 Feb-04 Feb-06 Feb-08 Feb-10 Feb-12 Feb-14 Source: ABS, RP Data 60

61 Consumer sentiment fell again in March and is now at its lowest level since May 2013 The Index of Consumer Sentiment was recorded at 99.5 points in March, down from points in February and -10.0% lower year-on-year. The Consumer Sentiment Index now sits at a fairly neutral setting. 130 Consumer Sentiment Index Consumer Sentiment Index Six month rolling average 70 Mar-94 Mar-96 Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: Westpac-Melbourne Institute, RP Data 61

62 Consumer sentiment has a significant influence on sales transactions and movement in home values Consumer sentiment vs. sales volumes , , , , , ,000 Consumer Sentiment (LHS) Sales vols (Syd, Mel and Bris) (RHS) 0 0 Mar-94 Mar-96 Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Consumer sentiment vs. home values (annual change) 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% Consumer sentiment Capital city home values -40.0% Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 There is a strong correlation between the six month average consumer sentiment and the number of house and unit sales. This link is logical, if confidence is higher, people are more likely to spend on high commitment purchases such as residential property. There is also a strong correlation between the annual change in six month average consumer sentiment and the annual change in capital city home values. If sales are increasing and there is an improvement in confidence you would anticipate the increased activity is likely to push home values higher. 62 Source: Westpac-Melbourne Institute, RP Data

63 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 The proportion and number of first home buyers remains at near record lows in January 2014 Monthly commitments Rolling 12 mth average 0 Jan-94 Jan-98 Jan-02 Jan-06 Jan-10 Jan-14 Source: ABS, RP Data The number of first home buyer finance commitments fell by -12.8% over the month of January and they are -0.4% lower year-on-year. As a proportion of all owner occupier housing finance commitments, first home buyers rose slightly over the month to 13.2% from 12.7% in January First home buyer housing finance commitments 63

64 Finance commitments New housing finance commitments are trending higher but remain well below the recent highs from 2009 Year-on-year, total owner occupier refinance commitments have increased by 9.6% while owner occupier commitments excluding refinances have increased by 14.3%. Overall, the figures highlight that there has been a fairly substantial pick-up in demand for housing finance over the year which is attributable to the ongoing low mortgage rates and highlighted by rising sales. 50,000 Owner occupier housing finance commitments new vs. refinance Refinances Total excluding refinances 40, mth trend 30,000 20, mth trend 10,000 Source: ABS, RP Data 0 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 64

65 $billion The value of investment housing finance commitments eases back in January The total value of investment finance commitments fell by 3.3% in January 2014 however, the value of investor loans is up 28.6% year-on-year. Investment finance commitments currently account for 38.5% of the total value of all housing finance commitments compared to 36.6% a year ago Total value of investment finance commitments Jan-94 Jan-98 Jan-02 Jan-06 Jan-10 Jan-14 Source: ABS, RP Data 65

66 The annual growth in outstanding private sector housing credit continues to inch higher The total value of outstanding private sector housing credit has increased by 5.8% over the 12 months to February 2014, the highest rate of annual growth since August Growth in owner occupier housing credit (4.9%) was outpaced by growth in credit for investment housing (7.6%) which was at its highest growth rate since January % Private sector housing credit (Owner occupiers and Investors) 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% Owner occupier housing Investment housing 0.0% Feb-94 Feb-98 Feb-02 Feb-06 Feb-10 Feb-14 Source: RBA, RP Data 66

67 20,000 18,000 16,000 Dwelling approvals are trending towards record levels, largely driven by units rather than houses Total dwelling approvals were 23.2% higher in February 2014 than they were in February 2013 an encouraging sign that housing construction is continuing to pick up. Over the month of February 2014, approvals fell by -5.0%. The annual number of approvals over the 12 months to February 2014 is 18.4% higher than the same period last year and approvals are at their highest level since February Total dwelling approvals Total dwelling approvals Total dwelling approvals (6 month rolling avg) 14,000 12,000 10,000 8,000 Feb-84 Feb-89 Feb-94 Feb-99 Feb-04 Feb-09 Feb-14 Source: ABS, RP Data 67

68 Both private sector house and unit approvals are showing a clear recovery trend Total dwelling approvals were 23.2% higher in February 2014 than they were in February Private sector house approvals are up 21.8% year-on-year. Private sector unit approvals are up 32.8% year-on-year. 14,000 Private sector house approvals vs. unit approvals 12,000 10,000 8,000 6,000 4,000 2,000 0 Private house approvals (rolling 6 mth avg) Private unit approvals (rolling 6 mth avg) Feb-84 Feb-89 Feb-94 Feb-99 Feb-04 Feb-09 Feb-14 Source: ABS, RP Data 68

69 Quarterly change in population Overseas migration has begun to ease however, population growth remains historically strong The rate of population growth has shown a marked turnaround, with overseas migration driving the residential population higher and creating further demand for housing. Over the twelve months to September 2013, Australia s population increased by 1.8% or 405,446 new residents. The rate of natural increase (births minus deaths) is currently at a record level. 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Natural Increase Components of national population growth Net Overseas Migration Source: ABS, RP Data 0 Sep-83 Sep-88 Sep-93 Sep-98 Sep-03 Sep-08 Sep-13 69

70 New housing supply is finally beginning to respond to the nation s high level of population growth As population growth surged from 2005, there was not a sufficient increase in the number of new building approvals. With population growth surging higher we are starting to see a supply side response however, approvals will need to trend higher and remain higher for a substantial period of time. 120, ,000 Total quarterly dwelling approvals Dwelling approvals vs. population growth Quarterly change in population growth 80,000 60,000 40,000 20,000 Source: ABS, RP Data 0 Feb-84 Feb-89 Feb-94 Feb-99 Feb-04 Feb-09 Feb-14 70

71 Australian home values have not fallen or risen to the same extent as some other international markets US values are currently -17.5% below their peak to Feb-14 UK values are currently at their peak to Feb-14 NZ values are currently at their peak as at Feb-14 Aus values are currently at their peak to Mar-14 Can values are currently at their peak as at Feb International housing market comparison NZ Can Aus UK US December US (Core Logic HPI) UK (Acadata) Australia (RP Data Rismark) NZ (Property IQ) Canada (Terranet) 30 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Source: CoreLogic, Acadata, Property IQ, RP Data-Rismark, Terranet 71

72 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

73 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) 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 Data This 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 Data Contains 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 Data To 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 Data Based on information provided by and with the permission of the Western Australian Land Information Authority (2012) trading as Landgate. Australian Capital Territory Data The 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 Tasmanian Data This 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; and b) 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 73

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