september 2017 · property market. should the residential market be adversely affected by a decline...

September 2017Month in Review

Feature – Homefront 3

QS corner 4

Commercial - Retail 5

Residential 21

Rural 59

Market Indicators 64

Contents

DisclaimerThis publication presents a generalised overview regarding the state of Australian property markets using property market risk-ranking scales. It is not a guide to individual property assessments and should not be relied upon.

Herron Todd White accepts no responsibility for any reliance placed on the commentary and generalised information. Contact Herron Todd White to obtain formal, specific property advice on any matters of interest arising from this publication.

All rights reserved. This report can not be reproduced or distributed without written permission of Herron Todd White.

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It’s entrenched in our psyche – the Great Australian Dream.

It’s described as our castle, our sanctuary, where the heart is and wherever we lay our hat.

The idea of home is evocative and emotional – it’s a thing of romance. As that great philosopher Dory so eloquently put it – “I look at you and…I’m home.”

The idea of home ownership, particular in this broad brown land of ours, is almost seen as a rite of passage.

What’s most interesting is how, as Aussie society graduated beyond the more conservative decades of the mid-1900, our idea of home evolved - and it’s likely to continue doing so for years to come.

The original plan was always a house on three-quarters of an acre (approximately 3000square metres for anyone born sometime in the last 40 years), but those old rules don’t necessarily apply. Nowadays you might find homes ranging from inner-city apartments, to contemporary architectural landmarks on a sub-400square metre space through to a family-sized townhouse. Homeowners adapt to space, facilities, lifestyle and affordability.

The other top thing about our country is its diversity from coast to coast. Someone who grew up in a Sydney terrace mightn’t be able to fathom the existence of family group positioned on many hectares 100 kilometres west of Perth. Yet for both, this is home.

This all leads to something imperative for property market participants to understand – homebuyers make up a huge component of our market and are therefore highly influential when it comes to price growth, changing in housing style and demand as well as a raft of other influences like infrastructure and town planning.

All this is to say using the umbrella term ‘Australian homeowner’ fails to recognise the diversity. To tackle that big discussion, you’d need a network of well-informed property people who could discuss, in depth, the nuances of what makes up a homeowner in their neck of the woods.

Well what do you know! Herron Todd What has that very network on hand.

This month, we’ve asked our offices to come up with a dissection of the homeowner market in their service areas. They’ve taken a long hard look at the

variety of homeowners they deal with, what they buy, where they buy, who is most active and where this market is leading. It’s a detailed study that puts you on the front foot in a sector that is constantly on the move.

For our commercial team this month, it was a chance to dig into the retail sector, and more specifically, movements among retail rentals.

Our people have created a wrap of retail rent performance for you to enjoy. They’ve hit upon the broad range of property types, quality and locations within retail and broken down what tenants are paying, how rents are tracking and where they’re likely to head in the future. There’s also plenty to work with in the way of vacancy risks and incentives if you’re keen on the nuances.

So, there we have it real estate lovers – a touch of home and retail rents. It’s another brilliant issue for you to enjoy, but if you want to get the absolute lowdown on your home front wish list, don’t just sit there. Call your local Herron Todd White office so our team can offer you a proverbial cup of tea and a Tim Tam as they walk you through the finer details of what ‘home’ means to Aussies.

Homefront

“One day, I know, we’ll find a place called ‘home’…” PJ Harvey

Month in ReviewSeptember 2017

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The 2017 Federal Budget includes proposed changes to eligibility to claim deductions for plant and equipment assets found in residential investment properties.

Plant and equipment items are items that can easily be removed from a property such as carpets, hot water systems, air-conditioners, as opposed to items that are permanently fixed to the structure of the building.

The major proposed change is that investors will not be able to claim depreciation on existing plant and equipment assets installed by a previous owner.

Any properties with a sale date before 9 May 2017 will not be affected by the proposed new legislation.

It will in most cases still be a tax benefit for investors to complete a Tax Depreciation Schedule. For properties purchased post 9 May 2017, you may be able to claim plant and equipment depreciation if:

• the property you purchased is new and you have not lived in it;

• you have purchased plant and equipment items to be installed in the property and you have not used them for personal use;

• a company owns the property (not a SMSF or a Family Trust as these residential investments fall under the new legislation).

If construction of the residential property is post 1987 or it is an older property and renovations have been carried out by you or a previous owner, you are still eligible to claim capital works deductions which are the estimated or actual cost of construction of the property.

Capital works deductions are income tax deductions that can be claimed for expenses such as building construction costs, the cost of altering a building and any external improvements such as fences, driveways, retaining walls etc. The capital works component of the Tax Depreciation Schedule remains unchanged.

For properties constructed pre 1987 with no improvements, (i.e. not renovated, improved or extended), there will be no benefit to the investor to complete a Tax Depreciation Schedule. However, if an investor carries out any improvements to their investment property, there may be a benefit to completing a Tax Depreciation Schedule.

Contact Herron Todd White for professional advice to help you gain the maximum tax benefit from your investment.


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QS Corner - Is it still worth completing a TDS on a residential investment property?

Commercial

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OverviewRetail property markets seem to be influenced by a variety of factors from economy to technology. Of course, the performance of retail property investments can be distilled down to a very important measure – rents. Tenant success has a direct impact for landlords and wading through the nuances of retail rents can be a challenge.

This month, our commercial teams have provided details on how retail rents are tracking and what that means for property in the sector.

SydneyRetail property in the Sydney metropolitan area has performed well over the preceding 24 months as a prolonged increase in the capital value of residential property enhances household wealth and in turn encourages discretionary spending which attracts patronage and investor confidence to the retail property market.

Should the residential market be adversely affected by a decline in residential property values, this would likely negatively impact the performance of the retail property market, rents and values.

A relatively high proportion of current activity in this market is driven by the historically low interest rates currently prevailing. Future increases in interest rates could impact the market by reducing buyer

confidence and affordability which may have a negative effect on value levels and rents.

Demand for retail space within high pedestrian traffic areas and tourist destinations of the Sydney CBD have increased over the past 12 months. Rentals have continued to increase across both primary and secondary Sydney CBD retail space while incentives have continued to fall. Pitt Street Mall remains the primary location for retail space.

Construction associated with the Sydney Light Rail has seen demand for retail space along George Street initially waver, however with the impending pedestrianisation of the strip, retailers have begun to consider the potential of the location. The recent opening of The Grounds of The City within The Galeries with direct exposure to George Street is an example of a retailer positioning themselves in preparation for the future of George Street.

Capital values and rents have also performed well in prominent, tightly held neighbourhood retail centres with good exposure and access attributes, together with good public transport links.

Further, suburbs that have or are currently undergoing significant high density residential development with increasing local populations, generally located in and around good public rail links such as Strathfield, Summer Hill/Lewisham and

Burwood in Sydney’s inner-western suburbs region, have likewise performed well over the past 12 months with limited local vacancy and nominal, if any, incentives being offered.

In contrast to the above, traditional retail strips such as the Darling Street, Rozelle/Balmain retail strip and Norton/Marion Street, Leichhardt retail precinct have performed less well with increasing retail vacancy levels, limited or no rental growth over the past four to five years and conversion of prior retail uses to professional, medical and office uses.

The current activity in the retail market is driven by a combination of local businesses, overseas investors and the current low interest rates.

A factor to be considered looking forward is planning provisions set out by councils requiring ground level retail components to be included in developments that trigger new retail supply to the market which in turn places downward pressure on the existing capital values, rents and vacancy levels.

CanberraRetail sales in the ACT have been scarce in recent times however the boutique shopping precinct of Manuka had a recent sale comprising two restaurants in August 2017. This was a tenanted investment and showed $360 per square metre per annum net. The new development in Greenway known as SQ1 also had

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two recent sales of ground floor retail shops. Two shops were also rented for around $400 per square metre gross being brand new modern premises of 127 square metres each.

Coincidentally a couple of small pharmacies have sold in the suburbs of Holder and Higgins in the past six months one being subject to a lease for $300 per square metre per annum gross and the other purchased by an owner occupier.

Rents in the inner south retail area of Manuka fell in the past 12 months due to the increased competition from the Kingston Foreshore space where rents had been tracking around $750 to $800 per square metre gross. Smaller suburban local centres are achieving rents of between $175 to $670 per square metre gross depending on location, unit size and the strength of the neighbourhood centre.

Incentives vary according to location and the quality of the premises. Some landlords are contributing to a partial fit out and others are offering incentives of 15% or four to six weeks rent free during the initial establishment period.

Demand is primarily from local cafe or restaurant tenants or destination type businesses for local centres. Boutique locations such as the Kingston Foreshore have attracted some national tenants being a prime location with a range of restaurant occupants. Rents would appear to be stable in most

areas. Greenway has been quiet in the past twelve months with older stock still available in the $300 to $350 per square metre gross range.

Gungahlin Town Centre is achieving rents of around $600 to $650 per square metre gross for ground floor retail space. The location is able to maintain slightly higher rents ranging from $600 to $900 per square metre gross depending on location, exposure and size of the premises.

Rents appear to be stable at present, however an increase in interest rates could impact disposable incomes, reducing the demand for goods and retail spending.

South East NSWThe retail landscape in Wollongong is still facing headwinds, a trend experienced for some time across most locations not just in Wollongong but nationwide. The Wollongong CBD has seen a significant growth in food and beverage tenancies such as cafes, restaurants and small bars and this trend is continuing with David Jones set to open a food market in its revamped department store in GPT’s Wollongong Central.

Despite local agents reporting increased interest from retail tenants, rents have largely remained stagnant and incentives are common, generally ranging from 10% to 15%. Prime rents at the upper end of Crown Street Mall surrounding Wollongong

Central tend to range from $800 to $1,000 per square metres gross with second tier rents in the $400 to $600 per square metre gross range. Fringe retail locations will have rents in the $200 to $400 per square metre range. Average letting up periods for standard sized shops are in the order of six months.

NewcastleThe retail rental market hasn’t seen great levels of volatility in a number of years. There are some specific areas around Newcastle where rents remain strong for retail and restaurant uses. The Boardwalk in the Honeysuckle precinct remains the highest rental earner with effectively zero retail vacancy for many years. This burgeoning retail locality is growing and so is the demand for retail space. On the fringes of the Honeysuckle area outside of the core Boardwalk area, while there are still plenty of vacancies, these tenancies are filling up and the right businesses are doing well. As the balance of the HDC development land is sold off and constructed upon, particularly along the Harbour frontage, so too will the retail catchment grow providing further stimulus to rental growth.

Key retail areas around the new university campus on Hunter Street are suddenly seeing upward pressure on rents. The mid and western areas of Hunter Street have long been in a market slumber – the market sleeps no more! With an influx of hungry

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students around Hunter Street and the addition of the new Law Courts, we have seen unprecedented activity in the area. So far retailers in the area have been somewhat slow to adapt to the new customer base. We envisage this area, which is dominated by users including wedding attire outfitters and real estate offices to be replaced in the coming years by more small bars and cheap food options. These more intensive retail uses and the heightened pedestrian traffic is sure to lift rental return in this interesting pocket of the Newcastle retail market.

LismoreNorth Coast Inland CBDThere is a significant level of uncertainty surrounding the Lismore retail market post the April flood caused by Cyclone Debbie. There has been a significant increase in vacancies with some business not reopening after the flood. Lismore already had a number of vacancies pre flood and this has amplified the issue. A retail premises in the main retail precinct has seen a 10% reduction in rent since the previous lease in 2013 in a previously steady market.

There are a significant number of older established owners within Lismore CBD who tend to be unwilling to reduce rents despite long term vacancies.

North Coast CoastalBallina prime retail has shown good increases in line with CPI, while secondary locations have shown slightly stronger growth as a result of affordability and supply. This is followed on from a much weaker market that coincided with the closure of the River Street Woolworths. With its reopening, the rents at the eastern end of the CBD have strengthened.

Agents continue to report limited supply, good enquiry and upward pressure on rents in Byron Bay.

Coffs HarbourThe retail rental market remains soft particularly in fringe or secondary locations. Vacancy factors are high and lease up incentives of between one and three months are common.

There remains a high vacancy factor within the main strip retail centre for specialty retail shops within Coffs Harbour. There are currently ten shops available for lease within the prime CBD strip centre. This represents an approximately 15% vacancy rate. The vacancy rates are due to a combination of a soft local retail market due to low discretionary spending, the unwillingness of local property owners to meet the market and incentives being offered by shopping centres The Plaza and Coffs Central which are attracting local retailers. Rental rates within the

prime strip centre depend on size and exact location but average space can be in the $550 to $700 per square metre range.

Retail precincts at the Jetty, Sawtell and Woolgoolga appear to be faring much better, with lower vacancy and increased appeal based on a lower rent structure. The popular restaurants, café and entertainment establishments in these precincts are well supported by locals and tourists. Rents in these locations are generally $300 to $400 per square metre.

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MelbourneAs can be seen from the table, Melbourne rents vary from location to location.

Many factors determine retail rental levels and each strip appears to operate in cycles. For example, after the downturn of the seconds clothing market in Bridge Road Richmond and the emergence of larger direct factory outlets (DFOs) rents have fallen

dramatically in this location and food orientated stores have slowly started moving in to this strip, reducing vacancy levels but at lower rental rates.

Traditionally strong retail areas such as Chapel Street, South Yarra and Burke Road, Camberwell have seen vacancies increase, rents fall and incentive levels increase in the past twelve months. Incentive levels to entice retailers to these locations were at minimal levels for years. Now, two or three month rent free periods are being offered to entice tenants into say three or four year leases or simply offering lower rentals is required to fill this space now. Areas such as Chapel Street and Burke Road were perhaps reaching unsustainable levels and rentals were due for a correction.

Conversely, areas such as Glenferrie Road, Hawthorn and Church Street, Brighton remain very strong strips with minimal vacancies and rental levels that are more readily sustained.

Box Hill, a growing Asian based location with many high rise residential towers currently under construction, has seen increased rental rates for its limited retail strip offering. Rents have kicked to above $1,000 per square metre net in some instances and there are few if any vacancies. These rental levels are likely to be under further growth pressures as there are some seven sites in this locality containing permits for in excess of 20 levels

of construction. It remains to be seen how many of these projects are built.

Across the board and due to increased on line sales, traditional bricks and mortar retail outlets for retailers such as fashion and clothing shops or retailers offering discretionary income orientated products are being vacated and replaced by food and hospitality orientated premises. These food and hospitality orientated retailers are needed due to the increasing number of people moving into the growing high density residential unit developments occurring within the 15 kilometre ring of the CBD.

So back to those lane ways! While not generally being as large as 100 square metres, in fact usually being between say 20 and 40 square metres, these spaces continue to remain popular within the CBD. Rents appear to have held up well due to the growing CBD population and visitors to Melbourne seem keen to shop and eat in these lane ways or even to take just a guided tour to see them!

BendigoThere has been a limited amount of movement in the Bendigo retail lease front recently. However the Bendigo retail investment market is showing increasingly sharper yields for leased investment grade retail space in the CBD. Recently a single storey retail building in Mitchell Street sold at auction for $985,000 at a 5.58% yield. The building

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contained two strong tenancies with good leases. The auction had strong attendance with local and non-local buyers present and competitive bidding displayed throughout the auction. Another auction was held shortly after of a smaller retail holding located in Hargeaves Street which also had strong attendance and competitive bidding. The property sold for $380,000 at a 5.66% yield.

EchucaRents have been an interesting scenario at a local level on the back of challenging conditions confronting smaller retailers and the expansion of some of the chain retailers in recent years. Secondary locations seem to find it very difficult to attract retailers and are often utilised interchangeably with bulky goods or office type uses, The main business precinct continues to be in relatively good demand notwithstanding a couple of vacancies at the time of writing on Hare Street. Several major retailers are pushing harder for rent free periods or reduced rentals according to some enquiries received by this office.

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AdelaideThe South Australian economy has faced a protracted period of poor performance illustrated by General Motors car manufacturer shutting its doors in October 2017 ending 60 years of construction in Australia. The decision by General Motors and the Federal Government’s policy shift in supporting the industry exemplifies the problems facing almost all forms of general manufacturing in South Australia which is having flow on effects across the entire economy. The South Australian unemployment rate remains the highest in the country at 6.9%.

A positive has been the securing of Defence construction contracts. After the completion of the Air Warfare Destroyer (AWD) the Future Frigates programme will commence in 2020 with an estimated spend of circa $35 billion. Following this in 2022 is the Future Submarine project, comprising 12 submarines at an estimated spend of circa $50 billion. The projects are expected to provide over 2,000 jobs.

Additionally the recent announcement of Arrium Steel being sold to London based operator Liberty House with all 5,500 jobs to be kept is welcome news and ends 18 months of uncertainty.

Also the Labour Government’s $550 million power plan announcement includes the construction of a $360 million gas–fired power station and the world’s largest battery at a cost of $150 million and should create certainty within the energy sector and additional jobs to the economy.

The positive economic developments may have gone some way to improving sentiment

Retail throughout metropolitan Adelaide has not shown any significant growth in several years. Retail trade figures published by the Australian Bureau of Statistics (ABS) show the seasonally adjusted retail turnover growth for South Australia was at 1.7% for the June quarter which is its highest level since 2.4% in December 2014 and 2.3% in September 2008 prior to that.

More specifically the only retail use that is being reported at levels above its ten year average for retail spending growth is cafés and house hold goods.

Whilst there are some positive signs, the modest retail performance is not expected to change in the short term with the low interest rate environment and rising house prices being offset by weak wage growth and continued softening in the labour market.

Whilst this is having differing impacts depending on the property class and location, the general market conditions are not conducive to strong retail rental growth.

Possibly one of the most significant shifts in the past few years has been the entry of Aldi. This has shifted retail precincts and how consumers interact with them and seen improvements in the potential use of space surrounding the Aldi buildings. This has been particularly relevant for shopping centres which have seen Aldi as a way of incorporating a new mini major and adding space or rejuvenating lesser used portions of a centre.

The conditions mean that incentives are increasing. Whilst the nature of the incentives is specific to the property and the parties, a typical rent free period is one month for each year of the first term, however some agents are reporting that incentives have now reached a level where the market is starting to simply negotiate lower face rents.

On the following page is evidence of such a deal on a main arterial road in Adelaide’s west. The deal indicates no disclosed incentive but the rent agreed is not showing significant growth over similar deals struck just under 12 months ago.

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BrisbaneAs outlined in the table below, retail rents have remained flat across all categories in recent times for the most part, with the exception of fast food drive through properties. Drive through fast food restaurants have seen significant expansion over the past two to three years with the number of tenants and food offerings growing exponentially competing with the bigger players (McDonalds, Hungry Jacks, KFC and Red Rooster).

Additionally, CBD retail properties, particularly in Queen Street Mall, are continuing to demonstrate a strong and continuing growth in rents, with international tenants driving activity. Queen Street Mall is tightly held with limited supply and rents have been able to remain high with growth for this reason.

Current incentives being offered for retail properties are generally in the form of a rental abatement, rent free period or up front incentive (such as a contribution to fit out) which typically reflect between 5% and 15% of the first term’s gross face rent.

The table beside shows a typical range over a number of different retail properties.

Looking forward we are expecting rents to remain stable with little real growth. The impact of internet shopping and in particular Amazon will ensure the demand for bricks and mortar will continue to be flat

in most categories. Having said this, there are always exceptions with prime locations continuing to do well.

Toowoomba The $500 million plus redevelopment of the QIC owned Grand Central Shopping Centre has predominantly been completed. The redevelopment has seen the centre double in size to approximately 90,000 square metres and introduce new discount department stores, supermarkets and approximately 160 speciality stores. The anchor tenants of the extension include Woolworths, K-Mart, Big W and Best & Less. Centre management has been

aggressive in leasing the new specialty shops, concentrating mostly on national quality retailers. The specialty rentals achieved in the centre are at the upper end of the Toowoomba market, with lease incentives reportedly available for quality tenants willing to commit long term.

Over the past 12 months there has been an increase in leasing activity within other areas of the Toowoomba CBD. The majority of activity has been to cafés, bars and restaurants. The majority of these operators are new to Toowoomba and this has

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resulted in a strong influx of new options for local diners. This demand has seen CBD rentals remain relatively static, despite the potential competition for tenants from the Grand Central redevelopment.

Leasing demand for shops in smaller convenience retail centres has declined which has resulted in a slight increase in vacancies. To date face rentals have been static but lease incentives are often required to secure new tenants.

There are a couple of new food based retail centres currently being developed in suburban Toowoomba. Market leading rentals have been achieved for these new developments with fit-out contributions commonly provided by developers as lease incentives. These market leading rentals are often required to make new developments financially feasible but have not yet been proven to be sustainable.

Gold CoastAs discussed in previous issues of our Month in Review, the retail investment market has been one of the strongest performing market segments within the Gold Coast’s commercial property sector. But despite the strength of the investment market, the rental market is far more inconsistent and very location-specific.

Anybody who is familiar with the Gold Coast would know that it’s home to a lot of retail development

for a city with a population of only 560,000 people (approximately). With two super-regional centres, three regional centres, three sub-regional centres, one outlet centre and in excess of 30 neighbourhood centres; (all of this on top of sizable retail pockets at Main Beach, Surfers Paradise, Broadbeach, Nobbys Beach, Burleigh Heads, Palm Beach and Coolangatta), it’s easy to see why rental rates can be highly volatile depending on the supply and demand metrics in any particular area at any given point in time.

Two interesting points of comparison are Main Beach and Palm Beach, whose rental market performance has been just as opposite as their demographic profile.

Traditionally, the Main Beach retail precinct was home to numerous fashion boutiques, fine dining restaurants, cafes and bars in the early 2000s; every shop in the area was full and rental rates were at a premium. The onset of the GFC saw a paradigm shift in the market dynamics at Tedder Avenue, which resulted in an influx of vacancies. Some of the strong long term operators have continued to thrive, but before too long property owners were forced to accept a correction in market rental rates which have now appeared to find equilibrium of some 30% below peak levels.

Palm Beach on the other hand has witnessed the inverse, particularly over the past five years.

Traditionally, the Palm Beach commercial precinct was seen as a hodge-podge of retail and commercial development primarily servicing a fairly localised catchment. Fast forward to 2017, and what started as a few trendy breakfast spots is now a thriving concentration of boutique bars, restaurants and coffee shops. This gentrification of the area has resulted in a critical mass of complementary uses and good trading conditions for retailers, albeit in a fairly competitive landscape. The improved business confidence has led to a surge in leasing demand and we are now seeing rental rates commonly exceeding $600 per square metre, as opposed to average rates of around $400 per square metre as little as five years ago.

The most consistent performer in the rental market has been supermarket anchored neighbourhood shopping centres, with most speciality tenants being quite consistent over the past five years in the $600 to $800 per square metre value band.

Broadbeach has also been a fairly strong performer with rental rates slowly on the mend after a steep market correction that occurred around 2012. Upgrades to Surf Parade and the Oasis shopping centre are expected to be a catalyst for continued growth in this precinct going forward.

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Surfers Paradise witnessed a mass exodus of tenants during the light rail construction works which coincided with a glut of retail development released to the market such as the Hilton and the Mark retail arcades. Occupancy rates in prime positions such as Cavill Mall did not falter, and those in Surfers Paradise Boulevard have enjoyed much better occupancy in recent years and a stabilisation of rental rates. Secondary positions however, are still reflecting reasonably high vacancy rates which places continued pressure on rental growth throughout the precinct. The strength of the tourism market will be the ultimate determining factor in the performance of this area.

Sunshine CoastThe retail market on the Sunshine Coast has seen strong trading conditions over the past three years. This has primarily been on the back of improved tourist numbers in that time, which has improved the tourist retail strips in areas such as Noosa Heads, Maroochydore, Mooloolaba, Coolum Beach and Caloundra.

Council has also had a role to play in this improvement with street scaping being undertaken in some areas to improve pedestrian flow and the general feel of retail precincts in that time. We note that the Bulcock Street area in Caloundra has had significant works undertaken with the western end completed and the eastern end to commence shortly.

Over $10 million is reported to have been spent in this area. While local businesses are being impacted during construction, the effect on completion is an improved overall level of visibility for properties and better pedestrian flow.

The Hastings Street precinct had similar works undertaken approximately four years ago, which did impact on trade and increased vacancies during construction and after. Over the past two years however, there has been very little vacancy noted with retailers reporting that the street scape has improved pedestrian access.

An area under pressure currently is the Mooloolaba Esplanade precinct. We have noted an increase in overall vacancy rates for rear or arcade style tenancies and also for esplanade fronting tenancies. While we have not seen any real decrease in effective rental rates which are still from $1,000 to $2,200 per square metre depending on location and size, we have seen an increase in tenant failure and turnover in the past two years. This area may need further enhancements to continue to be a prime retail precinct with the gentrification that has been undertaken in the Ocean Street precinct in Maroochydore and the development being undertaken in Sun Central at Maroochydore.

Generally, we have seen effective rents in prime retail strips as follows:

• Hastings Street, Noosa Heads from $1,500 to $3,500 per square metre gross per annum

• The Esplanade, Mooloolaba from $1,000 to $2,200 per square metre gross per annum

• Coolum Beach from $800 to $1,200 per square metre gross per annum

• Bulcock Street, Caloundra from $200 to $450 per square metre gross per annum

• Ocean Street and Duporth Avenue, Maroochydore from $500 to $800 per square metre gross per annum.

Wide BayRetail leasing for large format retail premises in Bundaberg has been somewhat active with some large format leasing between $150 and $180 per square metre. This rental activity has been predominantly along Johanna Boulevard to national retailers with a targeted growth strategy into regional markets. The rest of the retail leasing market has been slow and tough retailing conditions have been reported. In Hervey Bay the impact the Stockland Shopping Centre extension had on the local retail property market is starting to reduce for secondary stock. Rent incentives are commonplace and if a landlord is needing to fill a vacancy quickly, heavy incentives are likely to be required to rental and fit out contributions. Retail market rental growth prospects are low in the Wide Bay.

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GladstoneIn line with most sectors of the property market in Gladstone, the retail market has experienced a significant softening in recent years. The increasing vacancies over this time has had downward pressure on rentals. We consider that whilst there has been a significant increase in vacancies in recent years, some well anchored, modern retail centres appear to be maintaining good occupancies. While it cannot be argued that supply currently outweighs demand, some current retail vacancies are the result of the landlord’s unwillingness to meet the market and instead continuing to chase rental rates closer to those achieved during peak market conditions.

There is limited recent rental evidence, however we anticipate that retail tenancies within well anchored, modern centres with good occupancies are likely to attract rental rates in the $350 to $450 per square metre gross range. Rentals for retail tenancies in secondary locations with generally inferior exposure, condition and access are anticipated to achieve rental rates in the $200 to $300 per square metre gross range.

Anecdotal evidence indicates that tough business conditions remain for local retailers. Due to the current market conditions, it is unlikely that there will be any provision for significant (if any) rental growth in leases in the short term.

RockhamptonThe retail market has continued at a steady pace during 2017, with a general softening of rental rates since peak market conditions in secondary locations. When looking at the varying rental ranges, there is a relatively broad range from about $250 to $600 per square metre gross, depending on a variety of factors including location, exposure, access and tenancy quality; for shopping centres, the strength of the anchor tenant can significantly impact achievable rental.

As mentioned, we are aware of some tenancies located in prime positions that are attracting rentals in excess of $500 per square metre gross. Generally though, well located tenancies with good exposure, good access and good on site parking typically attract a rental rate in the range of $400 to $500 per square metre gross. These centres are traditionally local neighbourhood shopping centres anchored by a leading supermarket chain.

Retail tenancies in secondary locations and in shopping centres without a major anchor tenant are typically achieving rents in the range of $250 to $350 per square metre gross depending on their size, exposure attributes and the quality of the tenancy. Affordability is a key issue for many local, independent tenants who are very sensitive to any rental increases. The increasing vacancy rate over recent years has resulted in some downward

pressure on rents. In some instances lessors have decided to freeze annual rental increases to retain the tenant.

Demand for retail space continues to remain relatively flat in Rockhampton which is evidenced by the level of vacancies. Incentives remain common in new retail lease negotiations. Typically these are rent free periods of one to three months and / or contribution to fitout costs.

Rentals for bulky goods tenancies have stabilised across the Rockhampton market with most new rentals being negotiated at between $200 and $250 per square metre gross.

While there has been a softening in rentals, this has not dampened confidence for some, with some retail development on the horizon. An IGA on Main Street in Park Avenue is currently under construction – the reported $7 million development will include a child care centre, IGA supermarket and four retail specialty stores. The centre is reported to be aiming for completion in November. Additionally, we are aware of a development application currently with the council for a shopping centre, service station and food and drink outlet at the corner of Nagle Drive and Norman Road.

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Mackay

The retail rental market in Mackay has experienced a significant downward correction in rental levels as a result of the coal mining downturn. There are limited new reported retail leases with the market experiencing high levels of vacancy and weak levels of demand.

The majority of recent retail leases are for properties less than 200 square metres in the Mackay CBD and are usually negotiated on a gross basis. In 2017 incentives or lower rent for the first lease year have remained commonplace in the current market with the most recent incentives ranging from two weeks to three months.

A recent rent for a retail property on Gregory Street, Mackay with a lettable area of 165 square metres shows a rate of $173 per annum per square metre of lettable area gross which is considered reflective of the market.

The market has been most active at total annual rental ranges of $10,000 to $45,000 per annum gross. The highest recent rental was struck at approximately $219,000 per annum gross in November 2016. At the peak of the market, total annual rents far large premises exceeded this level.The market is approaching its cyclical trough.

TownsvilleThe retail market remains at the bottom of the market cycle and although we have been expecting the commercial sector to start to move in line with a pick-up in business confidence, we are yet to see it budge from the bottom of the market cycle.

Stage 2 of the Willows Shopping Centre’s $70 million expansion has recently reached completion and features Harris Scarfe, Cotton On Mega and additional retailers. City Point, a $10 million retail/mixed use development is currently well underway within the CBD.

Current demand for retail rental in the Townsville market is generally flat with an excess supply available relative to the current demand. Rental rates appear to be steady with facility managers opting to keep rents stable and introduce higher incentives such as rent free periods and fit-out contributions to attract tenants.

CairnsThe Cairns retail market passed through the bottom of the cycle during the course of 2014 but the limited recovery thus far means that the retail property market remains relatively flat. It must be also said that retail property sales in Cairns are extremely sporadic, with most sales involving retail property of mixed use retail / office buildings or tenant buyouts of single premises.

High exposure CBD retail space remains reasonably well occupied, but vacancies are more noticeable in the lesser exposure locations and/or on the CBD fringe. Rents have remained generally stable, showing ranges of $600 to $800 per square metre per annum for prime CBD space, and $1,000 to $1,500 per square metre per annum in key tourist precincts such as the Cairns Esplanade.

Blue chip retail located within the main Esplanade tourist strip as well as the central business district show reasonably low vacancies, though there is also limited demand from new businesses. There remains good investor demand for well leased properties which rarely come onto the market.

Although business conditions in Cairns continue to slowly improve, little change is expected in retail market conditions during the remainder of 2017.

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DarwinRental rates for retail space across Greater Darwin have reached an interesting crossroads. We appear to be entering a period of population decline just when the supply of retail space is increasing.

This is more evident in Palmerston, the satellite city of Darwin which was established in 1982. There has been solid population growth in the East Palmerston suburbs of Rosebery, Bellamack, Johnson and Zuccoli over the past five years, however provision of services to these suburbs was slow to follow with residents having to go up top to the Palmerston CBD for even basic necessities.

Over the past 12 months, new neighbourhood retail centres have been developed at Bakewell, Rosebery, Bellamack and Zuccoli to provide these services, however the proliferation of new centres coupled with population decline is leading to a reduction of trade and consequently, questions over the sustainability of rents in these new centres. The situation is not alleviated by the recent opening of Coolalinga Village and the imminent completion of Gateway Palmerston, two regional style retail centres which will also compete in this area. We have already seen the closure of the Rosebery IGA.

Although these factors all point to downward pressure on rents, the reductions to date have not been as severe as in other market segments. However, unless general economic prospects improve, this continuing supply/demand imbalance will place tenants under pressure, causing rent reductions.

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PerthWeakness in discretionary spending habits of consumers continues and looks set to stay in place throughout 2018. Retail owners remain under pressure to maintain occupancy in their assets, with evidence of increasing incentives in this market. Vacancy rates increased throughout the past year across the board however remain lowest in the prime retail hubs of the Hay and Murray Street Mall locations, followed then by regional shopping centres. There is however an increasing trend towards tenants on short term leases, holding over and pop-up style shops.

At the lower end of the retail spectrum, retailers along strip shopping locations are doing it the hardest with many smaller, non-branded retailers feeling the pinch of the tightening in discretionary spending. Many of these smaller retailers are giving the game away and it is evident that landlords have to rebase their rental expectations. Franchise style food operations (think of the myriad of themed Asian style/Mexican/juice/coffee operations) are concentrating their expansion in the state to shopping centre locations as a priority and towards prime strip shop dining and entertainment locations

such as Oxford Street, Leederville; Beaufort Street, Mount Lawley; South Terrace, Fremantle; and Rokeby/Hay Streets, Subiaco.

Recently rising neighbourhood centre space combined with subdued demand has caused rental rates to deteriorate. In neighbourhood shopping centres, rents declined by approximately 10% during 2017 to average around $600 per square metre. The downward trend is expected to continue into 2018.

Retail as an asset class remains on the radar for many investors as it provides a relatively secure cash flow and/or upgradable investment option. This has resulted in investors accepting lower internal rates of returns which is flowing into tighter yields for quality assets. We have noted a marked increase in the number of eastern states based private investors willing to accept far lower yields for assets than local investors are prepared to accept. At the entry level, we have noticed that strata or stand-alone lower end value retail units are being acquired by the sitting tenant in a majority of reported sales.

The focus of the WA Government needs to be on continued investment in infrastructure which will support the shift from Perth being a mining

headquarters to it becoming a bona-fide tourist destination. With that investment from government will come private development opportunities in the form of hotels and tourism based centres which will in turn drive the demand for world class retail opportunities, which will be the impetus to trigger retail expansion. We are seeing this with the redevelopment at Scarborough Beach, further redevelopment in the Joondalup Town Centre, The Stadium development at Burswood and in the future, Elizabeth Quay in the Perth CBD.

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OverviewThe word home is full of meaning on a variety of levels and our nation is particularly affiliation with the idea of home ownership and amplifies its significance even further. Homeowners make up the majority of our market, but homes are different things to different people around Australia.

Given how influential homebuyers are to our residential markets, we’ve asked our offices around the nation to provide a rundown of the homeowner market in each of their service areas.

SydneyHome buyers or owner occupiers are currently the most active buyers across Sydney after a number of recent policies were implemented aimed at reducing the number of new investor loans from lenders. The New South Wales State Government recently implemented a package for first home buyers which abolishes stamp duty on home purchases up to $650,000 with reduced stamp duty due on home purchases up to $800,000. A $10,000 grant for purchase of new homes up to $600,000 is also in place for first home buyers. With the median Sydney house price well in excess of these thresholds, many home buyers are considering different types of homes to the traditional detached home with a large backyard.

Whilst investors look towards both capital growth and rental returns in their property purchasing decisions, home owners are increasingly being drawn towards low maintenance living within close proximity of schools, public transport and other services.

Western SydneyIn western Sydney, home buyers have been particularly active in the past few years with strong growth recorded across the wider market. The popularity of certain property types highlights the changing face of western Sydney housing. This is more prevalent in the new estates with smaller block sizes being released, more semi-detached housing and highrise residential developments being built in areas not traditionally known for high density living.

Jordan Springs is a new suburb in the Penrith LGA with a recent release providing two storey, 3-bedroom, 2-bathroom semi-detached dwellings with a single garage on 170 square metres of land for around $680,000. Traditionally, areas further away from Sydney’s CBD offered larger landholdings; today these pocket sized blocks are becoming more common in western Sydney as housing densities increase and developers, along with local councils, address affordability concerns by offering a product that appeals to entry level buyers.

We have also seen high density units and high rise developments being constructed in areas that have

not seen this style of development for a number of years, if at all. This is mostly due to surging values now making developments like these more feasible. Penrith has a number of unit complexes but no large scale development has occurred for a number of years, whilst Blacktown provides a number of low to medium rise unit complexes but only in recent times has genuine high rise development occurred. An example of this is the Lord Sheffield Circuit development in Penrith, located in the new Thornton precinct, which is providing new 1-bedroom units for circa $450,000. In Blacktown an under construction 20 storey development at 29-31 Second Avenue is offering 1-bedroom units from around $470,000.

South-Western SydneySouth-western Sydney is appealing to a range of home buyers, particularly more price sensitive buyers such as first and second home buyers. In addition to providing an entry point to the Sydney property market, there are also options for buyers upsizing to more substantial property or down sizing from larger acreage style property in the region. Land values have increased substantially over recent years, which is reflective of the broader Sydney property market and also due to the proximity of the future Badgerys Creek Airport precinct and expanding western Sydney area.


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Home buyers are mainly attracted to newer localities and estates in areas linked with good access to services and amenities, public transport and major roadways. Newer housing estates are predominantly found along growth corridors, particularly along Camden Valley Way which travels from Edmondson Park through to Camden, a stretch of approximately 20 kilometres. Other popular new estates among home buyers include Elizabeth Hills and Middleton Grange which are situated adjacent to the M7 motorway and will also benefit from good access to the future Badgerys Creek Airport precinct. Many of these suburbs are part of a master plan which include shopping centres, parks and community facilities, all of which are imperative for attracting the home buyer.

These new precincts are attractive to the broader home buyer market given the range of housing options and price points that appeal predominantly to first and second home buyers, but also offer options to established property owners looking to spend over $1 million.

An example of a typical entry point is 36 Rosella Circuit, Gregory Hills, which sold for $702,000 in March 2017. The property was a modern 4-bedroom, 2-bathroom, single level residence with 2-car garage on a 380 square metre lot.

Source: Realestate.com.au

An alternative option many home buyers are increasingly moving towards is secondary purpose built self-contained accommodation, whether that be for children, older aged parents, or to rent to provide additional income. Some project builders are also incorporating attached self-contained accommodation options into some of their designs, reflecting just how popular this type of accommodation is becoming. 4B Flume Street, Leppington, which sold for $1,100,000 in April 2017, comprised a large two storey residence with a detached 2-bedroom granny flat to the rear.



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Southern SydneyLike other parts of Sydney, investor demand has declined in recent months while home owners are generally remaining active in the market.

First home buyers generally budget up to $1,000,000, which in this part of Sydney generally restricts property options to units, villas and townhouses. There are a number of new unit developments in the Sutherland Shire which are attractive for first home buyers including those at Woolooware Bay and the South Village development currently under construction at Kirrawee. For the latter, 1-bedroom units are selling off the plan for between $600,000 and $700,000, and 2-bedroom units for between $680,000 and $900,000.

Upsizers and families require a budget of $1 million up to $3 million in more popular beachside and riverside suburbs. Duplex properties are becoming increasingly attractive, allowing a more affordable option of a good sized modern home on a smaller low maintenance block of land. A sale at 32B Carabella Road, Caringbah, which sold for $1.562 million in August 2017, comprised a new two storey semi-detached duplex with 4-bedrooms, 2-bathrooms and 1-car garage on a 280 square metre lot.

Source: Domain

Empty nesters and downsizers are increasingly looking at large modern apartments in premium locations, which provide a low maintenance lifestyle close to cafes, restaurants and shopping facilities. In many cases, these buyers are looking to spend as much as, or more than, the sale proceeds from their large family home. Cronulla has become a popular location for empty nesters and retirees with a number of modern boutique complexes being constructed in recent years. A large modern garden apartment, opposite the beach, sold in June 2017 for $2.76 million The apartment, at 4/29-31 Prince Street, comprised 3-bedrooms, 2-bathrooms, double basement car space and a large wraparound yard area providing beach and ocean views.


Inner SydneyWith tighter restrictions recently imposed on the investor market, it is expected that first and second home buyers will continue to become more prominent over the coming months. Upsizers seem to be dominating the market in this area at present, especially in the higher value brackets. Downsizers are also active, realising the value of their home in the current market and purchasing in low density, high quality unit developments.

First time buyers have generally been priced out of the dwelling market in recent years with units becoming a more popular option for this market segment. With entry level Torrens titled dwellings in the inner west now typically in the $1.2 million to $1.4 million range, many first time buyers have found these properties to be increasingly out of reach. A


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property at 200 Addison Road, Marrickville recently sold in August for $1,355,000, comprising a detached single level Federation dwelling with 2-bedrooms, 1-bathroom and positioned on a 259 square metre block of land.

source: realestate.com.au

The Bosco development in the inner west suburb of Five Dock is a medium-scale, high quality development of 152 units which have been purchased by a mix of investors, first time buyers and also downsizers with no buyer appearing to have a dominant share. The mix of 1-, 2- and 3-bedroom units meant that there were options available for the different buyer profiles. The 3-bedroom units for example proved popular with the downsizers who still wanted a sense of space, but had decided on a more low-maintenance style of living. Several re-

sales of 2-bedroom units through a local agent in this complex have ranged between $925,000 and $1.05 million. The selling agent has noted significant local interest for these units from owner-occupiers.

Whilst the property market in general appears to have cooled slightly during the winter period, the $2 million to $5 million bracket appears to be performing strongly. Demand at this price range remains high for both dwellings and units with buyers ready to utilise strong capital growth obtained from existing property portfolios. A recent sale of a 3-bedroom unit in the popular Darling Island Road complex in Pyrmont was hotly contested with the agent advising a high level of interest and strong demand, resulting in a sale price of $4.39 million.

With such strong market growth over recent years, younger generations are starting to accept the fact that they may not be able to afford to buy a home in Sydney close to the CBD or coast. They must either succumb to renting in the area or re-locate to be able to find properties selling within their budget. Relocating may involve moving to suburbs with better affordability within Sydney or re-locating to another city or interstate to obtain home ownership and a more affordable lifestyle. A more recent strategy, known as rentvesting, appears to be becoming a more popular choice, where buyers look to regional and interstate property markets to purchase an investment property whilst continuing

to rent in an area where they want to live but can’t afford to buy.

ConclusionThe home buyer is the most active buyer in the market at present. With increased incentives for first home buyers and tighter restrictions around investor lending, owner occupier demand is expected to remain strong over the coming months. The great Australian dream of home ownership still appears to be that of many, however the type of home that represents continues to evolve. From new housing estates comprising smaller blocks of land to duplex and granny flat construction in existing areas to boutique and larger scale unit developments, there are many options now available to the home buyer to meet their changing needs and budgets. With housing affordability in Sydney becoming an increasing issue, the next generation will have to continue to look to new alternatives such as rentvesting as their first step into property ownership.

CanberraLately there has been a lot of activity in the Canberra market with several different demographics keen to make the most of the current market conditions. First home buyers, downsizers and families looking to upgrade have all been active in the property market as well as those who are new to Canberra.


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First home buyers have affordable detached housing options in the outer suburbs of Belconnen and Tuggeranong, while Gungahlin provides newer detached housing at more of a premium. Alternatively, there are affordable unit options available throughout the Canberra region with new developments being completed in the city and town centres. There is also a large supply of older units close to the city and in the suburbs that would be suitably priced for first home buyers. The strong detached housing market has forced most first home buyers to look to apartments to climb onto the property ladder.

Recently, there has been strong demand from downsizers looking to move out of the family home into something smaller. The demand has been so strong that some developers are targeting this market specifically for their new projects. This move has been prompted by several things, and downsizers are taking advantage of the strong housing market, selling homes often in established suburbs for record high prices, and a proposal announced in this year’s budget, allows downsizers to allocate some of the profit made selling the family home into their Superannuation.

New Canberra residents have been active mainly in the Gungahlin market where they can buy new homes in a newly established suburb. Demand has been very strong from these buyers with land

selling at a similar rate per square meter to land in established inner suburbs. This demographic has also been active in the new apartment market especially dwellings in close proximity to universities and town centres.

IllawarraHome ownership continues to be an aspiration in the Illawarra. The 2016 census reports that 67.7% of occupied private dwellings are owner-occupied with the remainder either rented (28.6%) or unclassified (3.6%). This is a slightly higher proportion than that of NSW (64.5%) and Australia (65.5%). Local agents are reporting owner-occupiers are very active in the market.

We find there can be three categories of owner-occupier: first home owners, families; and empty nesters. Each of these types of buyer will have their own personal criteria for their home with style, location and budget being the main factors. Broadly speaking first home buyers will be purchasing a strata title property or an older style single dwelling at the lower end of the market. Families look to upgrade to a 3- or 4-bedroom suburban home and this can include an established dwelling or construction in a new land estate. Empty nesters will often downgrade in size however may increase in price point.

It is first home buyers who face the most competition for property from investors as they are typically looking for similar property attributes such as convenient locations and affordability. Both first home buyers and investors are particularly active in the unit market in the Illawarra.

As it stands, all areas of the Illawarra residential property market have experienced significant growth recently. At this stage the Illawarra is still affordable to many owner-occupiers, especially when compared to Sydney. In fact part of the driving force behind the strong market is Sydney buyers who are priced out of their local market looking further south.

Southern HighlandsThe Highlands property market is heavily influenced by what is happening in Sydney and historically lags that market six to 12 months. The most active market segment in the Highlands is in the sub $1.5 million price point for properties located close to infrastructure and the townships of Bowral, Moss Vale and Mittagong. The market continues to benefit from the ripple of the Sydney market, albeit over the past month agents are reporting that the heat seems to have subdued somewhat with respect to days on the market of listings.

New land releases across the townships and fringes of Bowral, Moss Vale and Mittagong provide first home owners and speculative investors entry


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point to the market from $350,000 (Nattai Ponds, Mittagong, 500 square metres) to $1 million (Retford Park, Bowral, 2 hectares). Likewise, established homes close to the townships of Bowral, Moss Vale and Mittagong provide families and retirees a wide choice, from $650,000 for an older style property in Mittagong to $2.5 million to $3 million for a contemporary residence on minimum land of 4,000 square metres.

The rural / lifestyle market appeals primarily to retirees and weekenders, with these properties typically from 20 to 40 hectares ranging in price from $1.5 million to $4 million, located on the outskirts of the townships of Bowral, Moss Vale and Mittagong and villages of Sutton Forest, Exeter and Robertson. It should be noted that this market is less defined with purchasers being more discriminating in their purchasing considerations.

Southern TablelandsOwner-occupiers and investors from Canberra, Southern Highlands, Illawarra and Sydney have been prevalent over the past 12 months with this trend expected to continue. New land releases from $250,000 for the first home owner close to the township of Goulburn are available, albeit becoming more difficult to source. Established homes from $550,000 to $800,000 are the domain of families and investors. Similarly the rural / lifestyle market has seen an uptick in sales activity, together with

the resurgence in rural property sales driven by increases in cattle and sheep prices, with strong sales activity from owner occupiers in the 20 hectare plus market.

NewcastleNewcastle has traditionally been a working class city with reasonable housing prices, but as the Sydney market has become increasingly difficult to near on impossible for new investors and new homebuyers, Newcastle has felt the effects and demand is pushing prices.

Newcastle homebuyers are now moving further out into developing suburbs like Thornton and Fletcher. Some home buyers however are investing in smaller older homes in the traditionally cheaper suburbs and choosing the renovation option. Carrington is one of these suburbs.

Not many suburbs epitomized Newcastle’s working class image more than Carrington, with much of the suburb zoned industrial and Newcastle’s major wharf located on the North side, Carrington has always been a blue collar suburb, however that is changing and homebuyers are moving in.

With its close proximity to the city, beaches, schools, numerous parks and most of all affordability, Carrington has become trendy to families and first home buyers not wanting to live in attached dwellings or move to the outer suburbs.

Older inner city suburbs like Carrington are seeing rejuvenation as home buyers are turning old into new again.

On the flip side to this, those not wanting to renovate are still finding homes in the outer suburb estates or inner city duplex’s and townhouses that seem to be popping up everywhere.

Even though housing prices are certainly increasing the dream is still very much alive and achievable in Newcastle for those wanting their own home. Whether it’s old or new, it’s up to you.

NSW Mid North CoastThe market within the Port Macquarie area is still receiving strong activity from home owners. Recent sales show a trend of home owners purchasing new residential properties in the outer suburbs of Port Macquarie within new subdivisions. Here the land component is less expensive than the beachside suburbs with blocks ranging from $210,000 to $240,000.

Older standard and more centrally located 3-bedroom, 1-bathroom dwellings are proving to be popular with the first home buyer section, however steep competition earlier in the year has caused rapid increases in prices. This rapid increase has slowed and we are now seeing some of these houses taking longer to sell and often at below asking price. In the first half of 2017 these properties were mostly


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selling at listing price within one to two weeks.

We have noticed that the investor market has somewhat cooled with rental returns within the township of Port Macquarie decreasing slightly and allowing entry level owner-occupiers to be more active within the sector.

Houses within the middle range are still selling well with many of these properties being more suitable for middle to high level income families. A high percentage of these houses include pools, indicating that family friendly houses are being sought after within the region.

We have also noticed that there is limited stock of rural residential properties available for sale in the popular rural residential areas along the Mid North Coast.

Generally though, as investor activity has dropped off, owner-occupier activity has increased and overall market activity has lessened slightly during the second half of the year to date.

In our region we often see a slowing of the market during the winter period, but come springtime the markets tend to pick up again. We expect that over the next few months, the movement of the current market will indicate whether the area is going to experience a downturn over the next year.

NSW Central CoastThe local Central Coast real estate market continues to be quite active and strong. Feedback from real estate agents varies slightly with some complaining of limited stock to service their clients and others saying they worried that the market may be slowing. We tend to think that yes, there has been a slight slowing of sales but whether this is a seasonal thing or whether it will be an ongoing slowing of the market can only be quantified over the next few months.

At present, we and other observers have noted the inconsistent auction clearance rates lately. We have also noted that recently, quite a few more real estate agents are attending our valuation inspections for sale properties when only a few weeks ago, it was rare for them to attend as they were too busy.

Drivers in the market are well represented by Sydney residents relocating or investing here on the back of the comparative levels of affordability between the Sydney and local markets. Included in the mix though are the local residents who are entering the market for the first time, or sellers looking to upgrade or invest.

When we speak about first home buyers, typically we see them falling into three types of buyers: those who will only purchase a new dwelling; those targeting the unit market; and less common, those

looking at old homes with a view to value add. What we are hearing a lot though is a strategy of buying and occupying for a short time before moving out and renting the property.

Real estate agents across the region are currently targeting the market up to $600,000, however we have yet to see any real results of the government’s first home buyer’s grant or stamp duty relief in the market. We expect to see the results becoming more noticeable over the next few months.

Second and subsequent buyers are more often simply looking to upgrade after selling their previous home and finding themselves with enough deposit to afford a much better property. Interestingly, although not overly represented are those selling their homes and moving onto rural lifestyle properties. The two main Central Coast valley areas of Matcham/Holgate and Yarramalong/Dooralong Valleys are getting most of the attention in this space. Expect to pay between $1.5 million to $2 million for a nice property in Matcham/Holgate and between $1 million and $1.5 million in Yarramalong/Dooralong.

With kids hanging around the house longer these days, empty nesters are becoming so much later in life - that is those who don’t find themselves looking after the grand children while the parents are both working. We read recently that once again the Central Coast region is a magnet for the grey hair


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types and that might explain why there has been a few more retirement villages and complexes built lately.

Attached housing is certainly front and centre in many of the region’s suburbs. This includes predominantly villas and townhouses seen across the various suburbs. The spread of ownership of villas and townhouses appears to favour owner-occupiers, but not by much as this type of property also attracts quite a few of the region’s investors due to the currently good yields being achieved.

We find that units are more centred around the main beach front areas or the Woy Woy, Gosford and Wyong railway stations, but we think that investors outnumber owner-occupiers overall here with solid returns available. This is dependant on the size and quality of units because we find that most of the higher standard (and value) units in the beachside locations are owner-occupied or weekenders with a few used for holiday lettings with very good returns available. If that sounds complicated, then we agree it can be.

At the moment, the Gosford CBD is going through a period of revitalisation with a number of unit complexes under construction, recently completed or due to start. Marketing is mostly being done at a local level and we must say, it is to a very professional standard. Off the plan sales and purchases are the

norm and we understand that most of the complexes have been sold out. This is good for the region and at this stage, we cannot see an oversupply of units developing as in previous strong markets. We attribute this to the controlled or limited nature of developments occurring simultaneously either from the lenders (shackled by the authorities) or the developers themselves or some other providence.

NSW North CoastLismore / Casino / KyogleAn interesting scenario has been developing in the past six months where first home buyers are experiencing some difficulty entering the property market.

This is not necessarily due to inability to secure finance or not knowing what house product to aim for, but is primarily due to the competition from other corners of the boxing ring…in this case, upgraders and investors.

Let’s face it…the price range for established houses and units in the Lismore, Casino and Kyogle areas is a mere speck compared to the large metropolitan cities of Brisbane, Sydney and Melbourne, yet lenders still seem to be relatively comfortable in granting loan approvals to first home buyers there for properties close to $1 million.

Within Lismore City suburbs, we are now seeing the odd house breaching $600,000 as demand for well

presented homes is becoming increasingly buoyant. We note that lenders still seem willing to entertain the first home buyer for near new established homes or new build development which can hit in around the $350,000 to $500,000 price bracket…something relatively unheard of for a first home buyer even five years ago!

However, therein lies the problem. Not only are first home buyers having the opportunity to skip a long tradition of building up to the new build or near new home, other interested parties such as investors (as long as there is a good rental yield) and upgraders are competing for the available housing stock.

One may shudder at the $450,000 plus price bracket for a first home buyer which may suggest they prefer a millstone around the neck for a necklace. However, this is a decidedly better proposition than coughing up near to a $1 million in the larger cities or on the coast.

For some months, local real estate agents are lamenting the lack of stock and listings…and when they do get them, they are gone sometimes in a matter of days.

Picture a half-eaten, marinated chicken leg left overnight on the greasy kitchen bench and within a matter of minutes a horde of half-starved black ants are all over the discarded morsel – that is how I sense the first home buyer is feeling at the moment when


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missing out for the umpteenth time on securing their first purchase!

Another option to consider is the increasing volume of detached, free standing duplex units with a small yard. Slightly cheaper but still provides the 3- or 4-bedroom, 2-bathroom, double garage with less lawn to mow!

In summary, the first home buyer has not given up on their dream of buying their home, but it is definitely getting tougher….thanks to those pesky investors and upgraders.

Ballina /Byron Home buyers are active in the market at present however a lack of stock coupled with continued strong demand is limiting the number of transactions across the Ballina Shire. A family home buyer typically looks for a conventional 3- to 4-bedroom freestanding dwelling, whilst it is typical to see empty nesters down sizing to more low maintenance properties. Demand for lowset housing in Ballina is typically much stronger than for properties of two levels or walk-up style units because of the older demographic active in this locality. We are not seeing a rise in people renting for lifestyle and investing rather than owning - that has always been popular across the Ballina/Byron region.

Home buyers are also very active in the Byron Shire LGA. They are evident in all suburbs from

the high end of the spectrum in Byron Bay to the lower end coastal resort towns of Ocean Shores and Mullumbimby.

Typical home buyers appear to be middle aged families and are evident across all other market levels dependant only on their funds. There are also a significant number of baby boomers (home buyers between the ages of 55 and 75) in the prestige locality of Byron Bay.

The main price points for home buyers in the most popular suburbs in this location are as follows:

• Byron Bay NSW 2481 - Has an estimated purchase price of between $1 million and $2 million

• Lennox Head NSW 2478 - Has an estimated purchase price of between $700,000 and $1 million

• Sub coastal resort towns such as Mullumbimby NSW 2482 and Ocean Shores NSW 2483 - Has an estimated purchase price of between $600,000 and $850,000

As the prices push up in the coastal resort towns in Lennox Head and Byron Bay, migrating families who are used to smaller allotments are happy to divert their attention away from grand houses to freestanding duplex units on smaller allotments. In terms of attached housing, the only difference identified between investors and home buyers when looking is that of land area. Homebuyers would pay a

little bit more attention to the total strata area of any given unit.

The specific sector of the home buyer market on the move is that of Interstate or migration buyers. This type of buyer is generally workers who can keep their jobs in Sydney or Melbourne without a physical presence being necessary. As business grows across Australia, the Byron Shire becomes more appealing with easy access to nearby services such as the Ballina/ Byron airport and Gold Coast airport.

The home buyer sector of retirees does not appear to be active at all. In the Byron Shire LGA, retirees are already established home buyers who are not going to sell out only to buy back into this ever increasing market. The next generation of home buyers is also less common in this particular market due to the high purchase prices generally unachievable for this buyer type. First home buyers born and raised here are having to look outside these suburbs in order to get their foot in the door. Otherwise their only option is to buy and build in secondary location areas within Lennox Head, but only when the opportunity for land is available.

In one particular pocket in Byron Bay, there is a rise in the number of people investing in the holiday rental market. This is an ever increasing trend and is known locally as holiday hot spots. As the rent amount in this sector is similar to the affordability


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to own, there is little investment incentive, however there is much to gain as the yields from holiday rental properties continue to increase.

The Clarence ValleyHome buyers, first time, empty-nesters and otherwise, remain active in the Yamba/Maclean housing market. Whilst current market conditions are strong and investor interest continues, home ownership remains appealing to owner-occupiers due to the relative affordability of beach/country living available.

New homes are available in Maclean and Yamba for sub $450,000 and sub $600,000 respectively while older homes start at $300,000. Smaller lot living or unit living is also still appealing with units and townhouses available for between $250,000 and $300,000. On the other end of the spectrum, the rural residential market, particularly in Gulmarrad has a strong level of interest.

With so many options, there is no real trend towards attached or detached living as personal preference varies.

As opposed to investors, owner-occupiers are more concerned with capital returns in the medium to short term as well as being comfortable day to day. For instance, owner-occupiers in this market are more selective with features while investors remain

driven by the highest rental returns and ease of ownership.

Due to the affordability of the market compared to nearby capital and major cities, first home buyers have not given up hope of home ownership, however we are seeing more land purchased and dwellings erected a number of years later, indicating a slower financial process. Also, the mention of guarantor or the like appears to be becoming more common.

Coffs HarbourAlthough we have seen considerable activity from investors over recent years, owner-occupiers still make a sizable sector of the market. When you consider that there are first home buyers, trade up or down buyers and retirees all looking to secure properties, there is no one size fits all in relation to property. It is difficult to pigeon hole what each buyer profile looks like or the attributes sought after in a property. The first home buyer conjures up images of the young twenty something purchaser when in fact we are seeing the thirty or forty something age bracket also trying to get off the rental treadmill. The younger generation seems to be attracted to the shiny new product whist the older group looks towards an older home. As property prices continue to strengthen, new product is becoming less affordable and it is becoming increasingly difficult to find a house under $500,000. Therefore the trend is

to go to unit product (townhouse or villa) or further afield to the smaller townships in the more affordable price range of under $500,000.

The trade up or down buyers are diverse in their requirements and will generally be attracted to areas which suit their lifestyle depending on age and family needs. On this basis it is difficult to stereotype the style of product or price range they are seeking.

Downsizers typically look toward the unit and small lot properties. We have seen an increase in unit development within Coffs Harbour generally centred on the Jetty precinct and Park Beach areas. These two areas are only two kilometres apart however miles apart in value. The more affluent downsizer looks toward the Jetty precinct close to the harbor and CBD with local restaurant and tourist facilities. The average price for modern units is $500,000 to $800,000. Park Beach although having similar attributes of a good beach and shopping facilities has a more modest unit price range of $370,000 to $600,000 for modern units.

Highway upgrades north and south of Coffs Harbour have reduced travel times making commuting easier which has attracted many potential home purchasers to more fringe beachside localities such as Corindi Beach to the north, being popular with commuters from both Coffs Harbour and Grafton, and Nambucca Heads to the south where property prices are


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considerably more affordable in the $300,000 to $400,000 price range.

Home occupiers have many options with no one sector or locality being seen as more active in the market place, rather it is dependent upon the affordability factor of the purchaser and lifestyle benefits they seek as to where they choose to purchase and what they may buy.

Generally speaking the Coffs Coast is known for its lifestyle benefits. Demand has traditionally been driven by population growth due to its destination for retirees and more significantly for families moving from the southern regions looking for a more affordable and relaxed lifestyle. The appeal of the area is a reflection of the climate, attractive nature of the locality including many beaches and diversity of housing product close to the coast with good regional facilities.

The next generation can still afford to purchase within the Coffs Coast as there is an ample range of property priced under $350,000 so long as they are prepared to look at the older units in central Coffs Harbour or homes further afield in the lesser known townships such as Nambucca Heads, Macksville and Grafton. We note a main factor for the next generation and current generations for that matter is the availability of work. Although work is readily available it is the type and quality of work which can

be limited and we are seeing more potential home occupiers investing in these areas with a view to re-locating in the future.

AlburyHome buyers are significantly active in Albury-Wodonga and as a strong regional area, all the traditional life stages are still clearly evident in the behaviour towards home ownership which is achievable on both sides of the border. We run the gamut in regard to home owners with housing stock available in many different market segments. First home owners appear to be enticed by their first home being a new home and often this is achievable if they have been living at home or renting affordably whilst saving a deposit. However, recent increases in vacant land prices may have given rise to first home owners reconsidering existing dwellings as their starting point.

We have seen the detached dwelling sub $200,000 market diminish significantly, in most part due to investors rather than home owners. First home owners appear reluctant to buy the basic starter house despite a good supply of dwellings available sub $300,000. Upgraders seem to be on the move with better prices being achieved for basic housing stock and they are paying more as a result for the next home or trying to keep the first home as well. The 2016 census results indicate an even spread of age groups across Albury-Wodonga, with a spike

in the 2 to 29 age group for Wodonga and as many people never married as married. So still plenty of life stages to come and with entry levels into the housing market still achievable, people generally have a plan to upgrade.

First home owners have options in Albury-Wodonga and a budget of between $280,000 to $350,000 will secure a detached dwelling in a new housing estate or sub $300,000 budget gives options in the existing dwelling market. The upgraders’ budget is around $350,000 to $450,000 depending on the property they are jumping up from and can be spread evenly between new and existing stock. The forever home owner has the largest budget range of between $500,000 to $800,000 which may be a build or fully renovated dwelling. The downsizer’s budget may also be dependant on where they have divested and is usually between $400,000 and $600,000 - low maintenance, central, all done or ready to tackle major renovation in prime locations with cash to spare. The last two categories are experiencing competition from many cashed up ex Sydney or Melbourne relocators and the lower end of market is facing competition from out of town investors.

There is little commentary required regarding attached or medium to high density housing trends in Albury- Wodonga. Approximately 85% of dwellings are detached, with the remainder more likely to be semi-detached and very few units. The new housing


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stock is predominantly 3- to 4-bedroom, 2-bathroom detached dwelling on varying allotment sizes. There have been some new developments completed with small allotments and some semi-detached streets within this subdivision and there is a mix of homeowners and renters occupying these dwellings. There was also a recent spike in duplex construction usually with configuration of 3-bedrooms and 1- or 2-bedrooms, although the majority were marketed and sold to the investor market. Overall, probably due to the expectation of living in the country, a detached dwelling is preferable, in plentiful supply and still top of mind for most home buyers. There is however very often a premium paid for quality 1- and 2-bedroom dwellings, be they detached or not. This smaller market segment looks for location, privacy, neighbourhood and dwelling condition.

The sector of the homeowner market on the move is not particularly defined, however housing stock on the move seems to be established homes between $300,000 and $400,000 in Wodonga and more mixed in Albury, where home owners are seemingly able to find fully renovated character dwellings in prime central locations. Possibly all sectors are having a rethink on the value of established dwellings versus the rising cost of building with higher vacant land and construction costs. And looking at the increase in young people in Wodonga and older

people in Albury, the pattern of demand for stock to meet these different needs will impact the next generation who have not given up on the idea of home ownership. Actually in our region they seem more savvy and informed than ever, and increasingly aware that they are competing with out of town investors on lower priced properties and stable, long term employment more the focus than affordability at present.

The range of affordable housing stock and the lifestyle on offer are draw cards for regional areas generally and specifically for Albury-Wodonga there are many dynamic growth and infrastructure investment projects nearing completion. Home ownership will remain desirable, especially against the backdrop of entry into the property market in the major metropolitan areas now out of reach for so many and no relief in sight for the housing affordability crisis in Melbourne and Sydney

OrangeWhile housing affordability seems to be trending towards becoming more of a challenge in Central West NSW, it is definitely not at the crisis proportions of Sydney, and unlikely to be for the foreseeable future. Despite land values increasing noticeably over the past two years, home ownership (with or without a mortgage) is not out of reach for average

income earners and is the situation for the majority of households in the area. The level of purchaser activity over the past 12 months has been remarkable amongst local home owners, investors from all locations and tree changers alike. With interest rates at all time lows and affordability and investor returns worsening in Sydney, it seems like a case of no end in sight. Local agents are reporting record online views and some properties have been selling for slightly over asking price, giving us all pause to reconsider our benchmarks.

The change has been very noticeable for rural properties. The rural lifestyle has become increasingly convenient for purchasers from all areas as services and transport improve, adding value to such properties. If anything there is the potential in the region for an oversupply in the residential market between $350,000 and $450,000 as construction continues apace. These are typically dwellings in more recent developments on the fringes of towns, which is nothing if not encouraging for future first home buyers.

Tamworth Tamworth has a strong owner-occupier sector throughout all levels of the market. From first home owners who are typically 20 to 30 years old and in the market from $250,000 to $400,000, to


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upgraders who are 30 plus and in the market from $400,000 plus, the owner-occupier market remains accessible and strong within the Tamworth region.

First home owners are buying in the Hillvue, South Tamworth and Oxley Vale areas when looking at houses between the $250,000 to $350,000 mark. Over this price, the suburbs of Calala and North Tamworth come into play, especially when it comes to building a first home. Though we have not noticed a significant decrease yet, the elimination of stamp duty for first home owners may steer people away from constructing their first home. Some of the biggest draw cards to building a home was that there was no stamp duty and the availability of the first home owner’s grant, meaning that when looking at a $370,000 to $400,000 house, first home owners required less deposit if constructing.

Upgraders tend to look more towards parts of Hillvue, East Tamworth and the rural residential suburbs surrounding Tamworth such as Moore Creek and Daruka. They are looking more at the perfect family home, rather than just getting their foot in the door.

The majority of these buyers are focused on the detached dwelling market as the unit market in Tamworth is comparatively small and aimed more at investors or older people looking to downsize. There is also a strong mentality of living the great

Australian dream where buyers want that backyard for the dog and given the affordability of Tamworth they can do this.

The removal of stamp duty has seen an increase in interest from first home buyers, however as yet this hasn’t translated into a notable jump in sales. At present all sectors of the market continue to tick along steadily with no one sector leading the charge. Due to the affordability of Tamworth where a nice 3-bedroom home can be purchased for $250,000 we certainly haven’t seen a shift in people giving up on the home ownership dream or a trend in rentvestors and expect the dream to stay a viable option for the future.


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MelbourneInner CityHome ownership rates in Melbourne and the surrounding inner suburbs continue to fall simultaneously with house prices continuing to grow, forcing couples and prospective home buyers to settle for renting rather than ownership. The family home is continually changing and being redefined in Melbourne, with only 10% of households overall being made up of couples with children and only 20-25% within the suburbs of Richmond, Prahran, South Melbourne as home buyers looking to start a family are being pushed further out to accommodate their budgets.

We are seeing the Millennials choosing to rent for the lifestyle of being close to Melbourne’s Central Business District (CBD) and other amenities, rather than investing in home ownership. The rental rate within Melbourne is 63% and the inner suburbs average 50% to 55% of households being renters. First home owners within the hub of Melbourne are young couples (32%) and single households (24%) who aren’t in need of large areas of land, but prefer to be nearby work and also enjoy the benefits of the night life of Melbourne. The home buyer frenzy has flattened, with the lowest sales per month in recent years being recorded in April this year (1,511) as activity continues to subdue.

House prices within Melbourne continue to stay strong with recorded growth of 10.1% in the median house price since the beginning of 2017.

South Eastern SuburbsInterest for housing opportunities in the south-eastern suburbs continues to strengthen. Clyde North, Botanic Ridge, Cranbourne East and Officer have been experiencing a housing boom since 2016 as the south-east region grows year on year.

The typical buyer in the area is a young family consisting of two adults and children (ABS, 2016). Typically they are first home buyers who take advantage of the stump duty saving opportunity by purchasing a property under $600,000. They are large inside space seekers (i.e. the number of bedrooms, living areas, etc. is their established and important preference). The second and third group of buyers are downsizers from established large homes and investors who enter the market because of the relatively low property price range (below median) and prospective capital growth coupled with moderate rental returns.

The Australian dream notably transforms over time as the south-east Melbourne corridor continues to densify. A quarter acre block becomes a developer’s opportunity rather than an average solo homeowner prospect.

Eastern SuburbsHome ownership has been touted as the great Australian dream for decades, but the definition of a home is changing.

Within the middle eastern suburbs such as Glen Waverley, Vermont and Wantirna, purchase of a family dwelling is considered out of scope for first home buyers, with the entry level valued at above $1 million. There appears to be an equal distribution throughout these suburbs between investors and established owner-occupier families. Families who have settled into these suburbs are not tending to move to other municipalities, but more so they are either re-developing a new family home on their land, or relocating nearby. Further to this, the recent activity between APRA and the major financial institutions has seen a slight decrease in investor activity. This is creating an almost even market between investors and established owner-occupiers.

Within Ringwood there is a strong investor market in comparison to adjoining suburbs of Ringwood North, Ringwood East and Park Orchards where there is a strong owner-occupier market. These suburbs identify with a large growth in apartments whereby they are either purchased by first home owners or investors to then lease. Similarly, Croydon and Croydon North are comprised of mainly first home


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owners and families, with a smaller emphasis on investor activity in apartment purchases.

The outer eastern suburbs are seeing a lot of investment activity within Ferntree Gully, Kilsyth and certainly Boronia, making it difficult for first home owners to compete in these suburbs. The supply for investors appears to be fuelled by the older generation down sizing and moving closer to the city.

Similarly, further east into Belgrave, Upwey and the Mount Dandenong Ranges, the same supply is being created with baby boomers moving towards the city however, these properties are being purchased by a younger generation. These properties are more affordable, at approximately $600,000 to $650,000, appealing to young families who prefer a larger property over a closer location to the CBD. In addition to this, younger families are also purchasing in and around Chirnside Park and Lilydale due to the increase of newer properties available.

Northern SuburbsMelbourne’s northern suburbs continue to offer various options for prospective home owners from empty nesters looking to move from larger eastern properties and downsize and settle in the inner northern suburbs to families who are able to upgrade to accommodate growing families. Larger 3- and 4-bedroom detached dwellings continue to be in high demand in Melbourne’s outer north.

While median sale prices for detached houses in the metro Melbourne area are currently at $822,000 according to REIV, outer northern suburbs such as Craigieburn and Mickleham are more affordable with median house prices of $495,000 and $515,000 respectively.

Whilst detached housing remains a preferred property type for potential home owners, the steady property market increase in Victoria limits the ability of some first home buyers to afford detached housing. This makes more affordable villa units and townhouses in the outer northern suburbs further from the city centre popular choices, with median unit prices of $365,000 and $333,000 in Craigieburn and Sunbury respectively (REIV).

Downsizers who decide to move to Melbourne’s inner northern suburbs are usually represented by baby-boomers and empty nesters who choose to swap their large (and thus hard to maintain) houses in the suburbs for smaller units and boutique developments catering to owner-occupiers who wish to be closer to the Melbourne city centre in order to enjoy a more active life style. Typically, downsizers choose Melbourne’s inner and middle ring suburbs, such as Hawthorn to move into. Property prices are not the main driver within this market, as downsizers are looking for better infrastructure and quality of the developments.

Western SuburbsFamily buyers are active in the inner suburbs of Seddon and Yarraville, approximately six and eight kilometres west of Melbourne’s CBD respectively. Families are lured by the intact streetscapes, period housing, public transport, schools, access to the city, cafes and shopping that these suburbs offer. As of June 2017 the median price for Seddon was $917,000 and the median for Yarraville was $1,101,000 (REIV, 2017) which typically would put these suburbs out of reach of first home buyers. However, relative to other eastern suburbs a similar distance from the Melbourne CBD, the lower price points of Seddon and Yarraville mean they are attractive for family buyers.

Further out, the suburb of Deer Park has seen its median house price rise by 17% to $590,000 in the June 2017 quarter (REIV, 2017). Deer Park provides good transport and infrastructure and offers first home buyers larger land sizes and family properties with a median price that is just under the $600,000 stamp duty threshold. Surrounding suburbs such as Cairnlea and Ardeer are also popular with first home and family buyers. St Albans’ median unit price increased by 22% to 22.2% in the June 2017 quarter (REIV June 2017).

The house and land market in outer western suburbs such as Wyndham Vale, Tarneit and Truganina and north-western suburbs such as Melton, Thornhill Park, Brookfield and Harkness is remaining buoyant


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as first home buyers and families continue to seek out affordable housing. The changes introduced on 1 July 2017 to the First Home Owners Grant and stamp duty are expected to keep this demand constant as the majority of purchasers in this area aim to spend under $600,000 on their house and land to avoid paying stamp duty.

The predominant property type purchased in these suburbs is new house and land packages as there is new stock coming onto the market frequently and the savings offered to first home buyers coupled with the ability to personalise the dwelling being great incentives. There are a small quantity of townhouse developments within Point Cook, Tarneit and Truganina however the majority of purchasers favour detached dwellings, particularly young families as many want a backyard or a larger style house to accommodate their family.

Investors form a smaller portion of the purchaser profile in the outer suburbs as there is less demand in these areas in comparison with inner suburbs such as Footscray, Moonee Ponds and Essendon.

BallaratAs housing affordability in Melbourne continues to be a major issue, people are looking to regional areas as a way to get their foot in the property market. The Melbourne buyer has entered the Ballarat market targeting centrally located properties and

more specifically properties within close proximity to the railway station. Soldiers Hill situated north of the railway station has experienced steady growth over the past year with the median house price in April 2017 at $365,000 up from $318,000 the same time last year. Central Ballarat and Alfredton also experienced a 6.5% increase in the first quarter of the year.

Market confidence in Ballarat continues to rise with the State Government moving 600 jobs to the Ballarat Civic Hall site in 2020, upgrades to the railway line to decrease commuter time to Melbourne and redevelopment of the Ballarat Station precinct.

July 1st saw the commencement of the new First Home Owner’s Grant, with stamp duty concession on existing dwellings under $600,000 and an increased incentive to newly built homes. In the lead up to July 1st, first home buyers withdrew from the market waiting to cash in on the government incentives. As the financial year clicked over, central areas of Ballarat experienced the greatest growth in prices.

The volume of vacant land sales spiked in new residential estates as of July 1st. Ballarat has no shortage of vacant land for sale with new residential estates offering land in Bonshaw, Lucas, Delacombe and Alfredton. Prices have eased for land due to the oversupply over the past few years.

Stats are yet to be released for the month of July but the general consensus amongst property professionals is there is greater demand and first home buyers are making up a considerable portion of buyers in the market in central areas. Outer areas of Ballarat including Sebastopol, Wendouree and Miners Rest remain steady, recording limited growth.

BendigoThe Bendigo residential market has seen consistent growth over the past 12 months with increasing government support for first home buyers in regional areas. This increase in funding has seen a lift in new home construction rates in the Bendigo area particularly in the new estates around Epsom, Marong and Huntly.

With property prices rising in the capital cities, regional centres such as Bendigo offer first home buyers an opportunity to live in a new home within 20 minutes of a CBD for less than half a million dollars. For homes under $350,000 in value, rental rates are only marginally cheaper than paying a mortgage. With the Calder Highway and V-line trains connecting Bendigo to Melbourne within two hours of travel, Bendigo is far from isolated.

EchucaHome ownership has taken a variety of forms in recent times with a key focus being on new developments on account of very little existing


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housing stock being available in the marketplace. Consequently the combination of land price, building cost and final value have come into sharper focus for most home owners, with most focused on West Echuca on the Victorian side and West Moama on the New South Wales side.

HorshamThe reintroduction of the first home owner’s grant by the federal government has seen an increased confidence in the residential property market in Horsham in recent months, with an increased volume of sales, Many young couples and families are entering the property market for the first time, either buying an existing home or buying land within a new residential estate to build a home.

Coming off an above average harvest for the 2016 season and early signs of a relatively good harvest for the 2017, the Horsham region has also seen many farmland transaction occurring and consequently seeing farmers retiring into the city centre, looking for modern established homes to enjoy their retirement in.

With the housing market within the Horsham region still ranging between $200,000 and $400,000 the Australian dream of owning your own home is still very much obtainable and evident given that the rental market only makes up approximately 29% of the region’s occupancy.

MilduraHome ownership in Mildura is still a realistic goal, with the median house price being around $260,000 and for units $180,000. Families and older couples make up the largest percentage of people living in Mildura and the majority of buyers in Mildura are owner-occupiers. Statistics prepared by Corelogic tell us that the average time a home in Mildura is held is around eight years, which supports our observation that many buyers gradually trade their way up from entry level homes to better standard homes as their financial circumstances improve.

Over the past ten years, first home buyers have shown a willingness to take on more debt in order to acquire more expensive first homes. No doubt the low interest rate environment has contributed to this confidence, however it appears that many first home buyers have much higher expectations than previous generations. Most first home buyers in Mildura are looking for modern detached dwellings in better locations and will typically spend from $280,000 to $350,000.

The presence of attractive first home owner grants has made building a home an attractive option for many young people. Currently there is $20,000 available to first home buyers who build a home in Victoria and $10,000 in NSW, which when combined with the stamp duty exemptions currently available make this attractive for many people. We note

however, that the cost of land and building has increased in recent years by at least this amount, making this option less attractive than it once would have been.

Townhouses and units are mostly being purchased by either investors or retirees, attracted by the lower maintenance requirements. There has been a trend in the past five to ten years for many empty nesters to move from their large family homes to new townhouses on compact lots. The development of around 70 residential lots within part of the Mildura golf course has met with strong demand from this buyer segment who are typically spending between $450,000 and $650,000 to acquire good standard housing on lots of around 500 square metres.

Buyers in Mildura still have a preference for detached dwellings and the relative affordability of land makes this possible.

Our constant theme is that owner-occupiers (and tenants) always show a preference for homes which have functional outdoor living areas designed to be shaded in the summer months. Mildura has long, hot summers, and the ability to spent time outdoors is an important consideration for home buyers.

WarrnamboolWarrnambool’s residential market is somewhat removed from the affordability issues which dominate the metropolitan markets. As such, home


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buyer activity continues to occur across most demographic groups within Warrnambool.

First home buyers within Warrnambool are currently operating in the $300,000 to $400,000 price range. However a recent trend for first home buyers has been going down the path of a house and land package. This is on the back of recent government incentives that offer stamp duty exemptions and construction allowances for properties built within regional areas.

Financially secure families are looking at purchasing well established properties located within Central Warrnambool or selective north Warrnambool pockets, with retirees or couples looking to downsize generally looking at the Central Warrnambool market. Being surrounded by a larger rural and rural lifestyle demographic we are seeing a current trend with older couples in these areas choosing to cash out, downsize and bank or invest any surplus funds. These buyers focus on low maintenance, centrally located properties and operate at a higher price point than most family buyers. Both demographics are confident with purchasing within the Warrnambool market as owner-occupiers.

Demand from home buyers remains focused on traditional detached housing. This tendency to remain traditional rather than seek out attached housing options is solely due to very limited stock of this type in area.

The great Australian dream of home ownership is alive and well in Warrnambool. This is due to the continuing release of new residential land supply on the city’s extremities, a steady median price as well as the existing low-cost, affordable pockets in area such as Dennington and North Warrnambool.


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BrisbaneOne thing remains true about Brisbane - we have all the makings of a great home-ownership location.

There’s an abundance of affordable housing on hand, an enviable lifestyle to enjoy and the cost-of-living isn’t too shabby either – particularly when compared to Sydney and Melbourne.

The downside has been jobs growth. While this figure stays subdued, less new residents than we rightly deserve are crossing the border to make Brisbane their home. History suggests things will turn around, but we are in a wait-and-see pattern at present. Our property is trading well and prospects remain positive (except for small high-rise apartments pitched at out-of-town investors. Frankly, those remain a bit dire) but until we can see a tick-up in job numbers, then don’t expect a boom.

As we’ve already alluded to, property is a relatively affordable affair here in south east Queensland, so our demographic of homeowners is broad – there really is something for everyone.

First homebuyers tend to have budgets that are sub-$500,000 and those looking for detached houses tend to haunt the city’s fringe. Big new estates to the north in North Lakes, Mango Hill and Griffin are popular. The Ripley Valley to the west has also become a ‘go to’ for young buyers, and Ipswich stalwarts such as Collingwood Park and the mega-

development of Springfield Lakes are attractive too. Southern suburb first-time buyers are active around Logan.

As most first buyers graduate into long-term relationships and expanding families, they will generally find their income rises as well. This family-buyer set will look for a home across all areas - inner, middle or outer ring suburbs – with their budget being the determining factor in most cases. Other drivers for this demographic will be proximity to fundamentals. “Schools, shops and transport please,” would be their catch cry. Certainly, most still want the great Aussie dream – a detached home with plenty of space on a good size block so the kids can exhaust themselves running around the yard. That said, there’s a rise in the new family as well, where clever house design can allow them to adapt to a smaller plot of land. There’s even been claims that Brisbane ‘hipster’ families could be among the first generation to make apartments home to a growing brood. Certainly, this approach to housing is a distinct possibility, but while homes with land remain reasonably affordable, it’s hard to imaging these buyers flocking to attached living in great numbers. Most family homeowners would be budgeting up to the $1 million mark if they’re looking for a decent size, mid- to inner-ring home on its own block.

Empty nesters are another homeowner subset on the move. This group are looking for all the good things

in life without the hassle of a large house to clean. The new generation of empty nesters who haven’t quite flown into grey nomad status, are buying good quality apartments with plenty of room for when the kids, or grandkids, want to drop in and stay over. While some fancy themselves inner urban elites, there’s also a fair chunk of this demographic enjoying the middle-ring locations as well. Most of all, facilities should be in easy reach – hospitals, shopping and transport would certainly be among the mix. Most are selling out of their long-held family home and enjoying the CGT-free outcome to purchase a quality apartment. The result is, many will fork over up to $1 million for the right type of abode, even more if they want to be right in town where the action is.

For all homeowners, there’s a difference in the elements of a property that will appeal to them when compared to the investor buyer. They want a good quality finish with plenty of space. It would be nice to enjoy low maintenance, although this won’t be a deal breaker for those who like to potter and tinker around their own bricks and mortar.

Of all the demographics at the moment, the most active buyer group seems to be the retirees. No surprise, given our ageing population is looking to downsize and enjoy themselves. For Brisbane homeowners, there have always been the coastal options too with a relocation north or south, but for those retirees that want to remain a little closer to


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the big smoke and the water, some might elect to choose the Redcliffe Peninsula, Redlands area or around Manly.

One of the flow-ons for Brisbane as a result of this retiree shift is the domino of home ownership upgrades. As the older generation graduates out to their retirement, families hunting for their second or third home start making their way into the inner suburbs – many with a view to renovating the stock left behind.

The other big home-ownership move we’re seeing in Brisbane is one of ‘non-home ownership’. Younger generations seeking lifestyle but keen to have a foot in the market are looking to purchase their first investment in an outer suburb –affordable, accessible and well serviced addresses – and then rent in near CBD positions where they can enjoy all the benefits that 20 and 30 year olds hanker for.

If the idea of fringe ownership is abhorrent to them, then more than a few are re-assessing their view on detached housing and instead looking to settle in a townhouse or unit. Some savvy youngsters are making second-hand unit stock in prime positions within five kilometres of the CBD their first home. If it could do with a little renovation, all the better. Their plan is to take advantage of the currently subdued market and then use the unit as a portfolio starter when it comes time to upgrade. It’s a nice idea if you have the finances and a solid long-term plan.

ToowoombaThe Toowoomba and surrounding residential property market remains steady at present with low sales volumes wide spread across all sectors.

Being one of the more affordable regional locations in Australia, Toowoomba and surrounding suburbs offer an opportunity for many different types of home owners. With various industry and job opportunities, a central hub location, a diverse property market and varying segments, there are many different home owners whether first home owners, families, or empty nesters. While lending has tightened and property ownership has become more difficult for the next generation, there are still good opportunities in the Toowoomba region to become a home owner. Strategies such as joint ownership can also bring affordability to young people getting their foot in the ownership door and out of the rental market.

The typical product attractive to first home buyers tends to be in the sub $450,000 segment, being new 2- and 3-bedroom units as well as 3- and 4-bedroom houses located in active investor areas in the western suburbs of Toowoomba and satellite suburbs such as Cambooya and Wyreema. The other trending option is to buy older housing in more established areas. Families generally seek slightly different properties to first home buyers, with a focus on more space (i.e. 4-bedroom houses), bigger back yards and close

proximity to schools. This type of housing is found throughout Toowoomba, Highfields and Westbrook in the sub $600,000 segment. Empty nesters seem to stay put in the family home or down-size to unit or villa living and seem to fill the higher priced property segment.

Attached housing and detached housing on small lots are tending to grow in popularity throughout the Toowoomba area, particularly in the older areas close to the CBD. The dream of having a big back yard appears to be changing. Many infill blocks have been sub-divided into smaller lots or have had unit complexes built on them. This type of product may be attractive to empty nesters looking to downsize for maintenance and convenience reasons. Attached housing is also becoming more appealing to first home buyers for affordability. This product is often more suited to home buyers than investors due to costs for the location and resulting returns on capital.

The sector in the home buyer’s market which appears to be most active is upgraders looking to get into a bigger house or a more desirable location. Properties in areas such as Rangeville, Middle Ridge, East Toowoomba and Mount Lofty seem to be what is sought after by this sector.


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Gold CoastNorth-Western Gold Coast and Lower LoganThe northern (Gold Coast/Southern Logan) corridor provides affordable options for home owners, being cheaper than its central and southern Gold Coast counterparts, especially since the improvement of the Gold Coast market over the past few years.

First home owners are active in this area. They can purchase house and land packages from the high $300,000 mark to $500,000 in a number of suburbs such as Ormeau, Ormeau Hills, Pimpama, Holmview, Bahrs Scrub, Yarrabilba and Flagstone. The Queensland first home owner’s grant and low interest rate environment have also contributed to this market. First home owners also purchase affordable older or semi-modern detached dwellings and attached duplex and townhouses or units within the $280,000 to $400,000 range, especially in suburbs where the detached house may just be out of reach.

Families are active in detached home ownership around the $400,000 plus mark in suburbs such as Upper Coomera situated near schools, transport, shopping and infrastructure. Families upgrading and looking for space and lifestyle have also been purchasing rural acreage detached housing in areas such as Kingsholme and Jimboomba. An example is Montego Hills estate in Kingsholme (approximately 30 kilometres north of Surfers Paradise and 45

kilometres south of Brisbane CBD). This estate offers vacant rural residential allotments between one and two acres ranging in price from $370,000 to $480,000. These blocks are being purchased by families and upgraders wanting the lifestyle block and space.

Empty nesters typically purchase attached duplex/villa/unit type accommodation starting from $280,000 plus with low maintenance and affordability in mind.

Home owners tend to look for accommodation to cater for their needs. For example families will purchase homes that include larger or multiple living areas and yard space, whereas investors will purchase housing that will maximise yield return, opting for more bedrooms and less living areas and yard space.

The next generation have not given up on the idea of home ownership within the northern Gold Coast corridor due to the affordable options provided, especially when prices within the central and southern Gold Coast precincts start at the $550,000 to $600,000 mark.

Northern Gold CoastThe northern Gold Coast typically represents an established market with first home buyers not a large or very active market segment. Agents are reporting that a lot of the first home buyers that they do see

are now struggling to get mortgage approval with some sale contracts failing to transact.

First home buyers in this locality typically favour semi-modern circa 1980 to 1990s, 2- and 3-bedroom duplex and townhouse style units. This product is priced from around $330,000 to $380,000 and is located in the central areas of Southport, Arundel and Labrador.

Affordability is the main driver for the first home market in this area and there has more recently been a strong and obvious trend towards attached style housing. Preferences with regard to proximity to schools, public transport, the CBD, hospital or university and proximity to Broadwater are front of mind for this product type, with the more bedrooms the better and then buyers will look at the condition of the improvements.

The market on the northern Gold Coast is driven by two main sectors being local upgraders and people migrating to the coast from interstate or Brisbane. Buyers in each of these sectors are looking at improving their life styles. The Gold Coast is a desirable location and upgraders are motivated by improving on their quality of home and location, i.e. canal, golf course and Broadwater locations.

Potential first home buyers are now looking at lifestyle more and more and seem to be renting in a more desirable location, however this comes with


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the potential of being caught in a rental trap. Rents have strengthened over recent years and would be impacting on the ability of many to save a deposit for first home investing.

Central Gold CoastHome owners have been very active in the central areas of the Gold Coast over the past twelve months, however it has become evident in the past few weeks that there is now a lack of urgency to move. In most cases, buying property in this particular patch is seen as a lifestyle decision for owner-occupiers. Beachside or waterfront property are typically the most sought after. The market for residential property that offers beachside living or boating access has been quite strong over the past two years. Mermaid Beach property has been very popular for those wanting to live by the beach. This suburb offers a variety of housing choices from small walk-up units to duplexes to large beach front homes and property here is always seen as an attractive investment because it offers something for home buyers of all budgets. Broadbeach Waters has been arguably the best performing suburb in terms of price growth in the past five years and housing in this suburb is primarily dominated by canal front dwellings. Entry level for waterfront housing would be around the $800,000 level.

It appears local home owners are becoming aware that prices have shifted upwards significantly over

this period. There is a sense that home owners realise that the market may be close to overheating. Whilst most home owners would be confident of achieving a good result if they had their property listed on the market, many would also be concerned of having to pay an over the top price to re-enter the market if they wanted to upgrade in the same suburb or shift to a neighbouring locale. There is a real lack of stock for most property types in the central suburbs, except for highrise apartments in Surfers Paradise, which is more of an investor-driven market.

A typical first home buyer in the central areas of the Gold Coast would most certainly desire to invest in detached housing in a central locale, however in the current market it would be quite difficult to find this opportunity. A buyer would be expected to pay more than $600,000 for an entry level 4-bedroom detached house in Robina, a suburb which is a few kilometres away from the beach. There are still some affordable detached housing opportunities in suburbs such as Carrara and Mudgeeraba in the $475,000 to $550,000 price range but agents report that demand for these type of properties is far outstripping supply.

We are seeing a trend where many first home buyers in this area are willing to sacrifice the dream of having a detached house in a central spot and target something smaller in living size (e.g. a townhouse) but it must have modern finishes. Home owners

who consider townhouse living as an option are also looking at properties which can offer suitable car accommodation and at least have proximity to amenities such as shops and schools. Even with the low interest rate environment, we have not seen a huge amount of sales activity that has originated from first home buyers over the past few months. Properties in this area are generally in the higher price bracket, being out of reach for the large majority of first home buyers. Some developers who have built townhouse or low to medium rise projects in Robina and Merrimac have had reasonable success in selling new product to first home buyers and owner occupiers this year.

With the Gold Coast residential property market appearing to show signs of overheating in most coastal suburbs, it’s probably not the best time for first home buyers to enter the market right now. Those home owners who have been mulling over selling or even down sizing should possibly look at renting as an option in order to avoid re-entering a hot housing market. The Gold Coast property market can be volatile at times and should interest rates spike or economic conditions soften over the upcoming months, the thought of owning a home will be less gratifying.

Central West Gold Coast And Lower LoganIn the central west Gold Coast and Lower Logan areas it appears a lot of purchasers are home


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owners and less are investors due to the locality and lower price compared to central localities. The cheaper prices are attracting home owners who were previously renting and want the my home feeling. Deposits for the contracts appear to be less than 5% in a lot of instances.

In the central west and western areas, home owners appear to be young couples getting their foot in the door as prices appear to be cheaper than the central coastal areas. They are typically purchasing new products, particularly throughout the new Maudsland estates, as well as small villas and townhouses within complexes.

Out west, it appears established families are upgrading to larger properties in superior localities such as Tamborine and Cedar Vale.

Central western localities offer good value for money with prices for dwellings such as an older style, 3-bedroom in Nerang being circa $400,000 and a semi-modern, established dwelling in Carrara being circa $550,000 to $650,000.

New stock in Maudsland is priced between circa $500,000 and $650,000 depending on the size and quality, etc. This still offers good value for money being within close proximity of the M1 and major shopping centres.

Out west, prices vary significantly depending on the property type, from $300,000 in Beaudesert for an original dwelling within the township to $600,000 plus for larger acreage properties.

First home buyers are leaning towards any affordable product in suburban areas (attached or detached) and out west, home owners (minimal first home buyers) appear to be attracted to larger land areas with good quality ancillary improvements.

It appears home buyers are attracted to the price, age and accommodation. Accommodation is typically seen in 2-bedroom duplexes throughout Oxenford, where garage conversion to a bedroom is becoming more typical. Home owners’ attraction to new products is seen throughout central western areas amongst townhouse villa projects such as Hilltop Villas in Carrara and new townhouse projects west of the M1. We are occasionally pulling back prices within these complexes.

Throughout central west and western localities, there appears to be a mixture of first home buyers, upgraders and sideways movers with an evident attraction to central localities for first home owners and larger, older properties for upgraders.

There appears to be minimal retirees throughout the central west localities, however we have come across a few instances of retirees selling in order to relocate to a retirement home.

We believe the next generation has not given up on home ownership and are strongly attracted to owning their home. The current prices and competition in the market appear to make it more unrealistic within central west and western localities, however it is very circumstantial to the state of the market and economy when the time comes.

We have seen a strong mixture of home owners and investment properties throughout central western areas as there is no appealing lifestyle in western suburban areas, however it appears larger properties in the western areas are definitely favoured for lifestyle, however these are typically owner occupied.

Southern Gold Coast & Tweed CoastHome owners/buyers are very active in the majority of areas on the southern Gold Coast with the majority of sales being to families relocating to a coastal suburb. In the higher price brackets, we are seeing a number of interstate buyers migrating north, however the majority of agents believe that properties being purchased by interstate buyers are for the owners to occupy in the near future rather then investment purposes.

The market and property values have improved considerably over the past few years and areas such as Burleigh Waters, Elanora and Currumbin Waters have been popular with families as they are within close proximity of the higher priced suburbs and


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beach side areas of Burleigh Heads, Miami, Palm Beach and Currumbin.

Entry level housing in Burleigh Waters, Elanora and Currumbin Waters is typically around the $600,000 mark for a detached dwelling and depending on the position/location and quality/size of improvements, this can vary up to as much as $1,200,000.

There has been a substantial amount of older homes demolished in our coastal areas with new attached housing and duplex units being constructed. These modern duplex units are also very popular in the market place and are attracting record sale prices for modern, low maintenance and easy lifestyle properties.

With duplex units, home owners prefer to have a double car garage and additional living rooms whereas investors are after more bedroom and bathroom accommodation with living areas and car accommodation not appearing to be as important.

One sector of the market which has improved considerably over the past few years is the older style, attached duplex units with yard space. As the entry level price for detached housing has risen, first home buyers have been priced out of buying a freestanding house and rather then buying a unit within a complex with body corporate fees, the older single level attached duplex units have become very

popular in the marketplace with buyers wanting an outdoor living space and yard area for kids and pets.

The next generation of buyers appears to still be active, however the higher the price the thinner the market.

Sunshine CoastHome ownership is still the dream for most people living on the Sunshine Coast and owner-occupiers are again making up the majority of sales, particularly since APRA announced changes to investor lending.

We are seeing first home buyers still very active throughout the more affordable hinterland townships as well as in the new small lot residential estates at Caloundra and Palmview. Land in these estates is selling before titles are issued and is very popular amongst first home buyers. The Sunshine Coast is seeing some change with several new high density unit developments recently completed around the new hospital precinct and a large supply of small lot developments providing affordable housing. Lot sizes above 500 square metres are becoming scarce along the coastal strip and the number of attached housing developments is increasing. Both of these residential options provide an opportunity for first home buyers to get into the market at around $400,000. Investors are also active for these types of properties at this price point.

Upgraders are also active given the ability to exit out of their current home. Also the Sunshine Coast has always been a popular destination for retirees seeking the sea change. This group of buyers makes up the majority of the market for the better family homes along the coast and rural residential properties inland. Upgraders are more active in the $600,000 to $1,000,000 price range, with the main reasons being the want of a larger dwelling or a property in a more desirable location. This price range will still secure good quality properties right up and down the coast, from units with views to a family home within walking distance of the beach and are still considered affordable in comparison to Sydney and Melbourne.

The prestige market is dominated by upgraders and retirees with a fair chunk of buyers coming from Brisbane and the southern states. These buyers make up the majority of million dollar plus residential sales on the coast. Whilst some well located good quality units sell in this price range, the majority of million dollar plus sales are beachside and canal front dwellings or larger hinterland properties, many of which afford views.

The residential market in general is still moving along nicely. Vacant land is still very popular and most agents are reporting difficulties in securing listings at present. Anecdotally we hear that owners


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are reluctant to sell at the moment as they are anticipating that there will be a further improvement in future capital growth. First home buyers, upgraders and retirees are active in the market which is unlikely to change given we live in a great part of Australia. The great Australian dream of home ownership is still alive and well on the Sunshine Coast.

Hervey BayHervey Bay has traditionally been an owner-occupied market generally due to its beachside location and affordability. The boom period of 2006 to 2008 saw investors take advantage of cheap property compared to their local southern markets however some of these initial investors are now local residents. There are many different housing options for home owners including villas, townhouses and units close to the foreshore, existing detached housing or vacant land with a view to building their new home. Land generally starts from around $150,000, established older housing ranges from $250,000 to $450,000 up to esplanade and beach front property in excess of $750,000. New turn key house and land packages generally offering 4-bedroom, 2-bathroom accommodation with a double garage ranges from $375,000 to $500,000 depending on the estate. Land sizes also vary considerably from the older, traditional 800 square metre to quarter acre block down to 400 square

metres in some of the new estates. Some acre or larger lots are still available however zoning changes have seen quite a lot of these larger blocks now being subdivided. First home owners were active over the past two years however this now appears to have slowed as a consequence of local government incentives no longer being offered or offered at a reduced level. Appetite for homes requiring renovation is improving with older beach shack property being prime targets due to location.

The rental market has also been strong for a number of years now with a 4-bedroom home receiving $360 to $400 per week. This return has maintained an investor presence in our market. Most investor activity is however in the new estates which also has tax benefits for new homes. Generally Hervey Bay has a balanced market between investors and owner-occupiers with an adequate supply of all property types for a potential home owner.

BundabergThe Bundaberg home owner comes in many forms, with first home owners, upgraders, families and empty nesters all being relatively active within the Bundaberg residential markets. The most active localities are the coastal corridor around Bargara and the suburbs surrounding the city. Recently buyers have had a preference for established houses with the volume of sales having a slight increase at the expense of vacant land and unit transactions. Due to

the relatively affordable level of housing throughout the region, Bundaberg remains attractive to all types of home owners.

EmeraldHome owners make up approximately 95% to 99% of the current market. They are active in all price ranges from $200,000 to $600,000. There is a quiet confidence starting to filter around the town that the resource sector has stabilised and employment demand appears to be trending upwards slightly. If coal prices remain where they are or improve we will only see the employment demand increase. Purchasers appear to have more confidence in the market being stable or perhaps firming over the next two years. Those moving to town for work think our house prices are good buying (compared to the east coast and south east corner). Renters have been active in purchasing homes and some are choosing to upgrade. Good value for money is across all types of properties. Many in town purchased during the boom period of 2005 to 2012 and now owe more than their property is currently worth. Had they still had equity or could sell and break even the upgrade market and local investor market would currently be very active.

GladstoneThe landscape of the Gladstone property market has changed dramatically in five short years. During the boom, the market was dominated by investors trying to cash in on the hype that surrounded Gladstone.


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Value levels and rents were the highest Gladstone had ever seen, vacancy rates were essentially 0%, motels were running at 150% occupancy, etc etc. They were crazy times!

Fast forward five years and the property market could not be more different! You would be hard pressed to find a property owner who has not suffered some sort of loss in the past few years. On the other hand, the buyer’s market we currently find ourselves in has attracted many different types of home owners to the market. The affordability of property in Gladstone has turned us from one of the most expensive places to live in the state to one of the cheapest. Value levels have not been this low for nearly two decades.

We have seen a large contingent of first home owners enter the market. First home buyers appear more active in the sub $400,000 market for both existing and newly constructed homes, however if purchasing existing homes they are generally looking to buy at a lower price point. Upgraders are also taking advantage of the current affordability. These buyers are typically looking for detached housing with space for the children, both internally and externally. Proximity to infrastructure such as schools and shopping play an important role in these buyers’ decisions.

Investors have slowly been starting to re-enter the market over the past few months. While the properties being purchased vary, most are looking for long term capital gains as the rental yields are likely to remain very low for a while yet.

Overall, the dream of home ownership in Gladstone is definitely easier and within reach for many more aspiring home owners.

RockhamptonThe great Australian dream is an ever changing ideal for many Australians and in Rockhampton it is no different. There are many different housing options which a potential home owner can purchase, including inner city apartments, existing detached housing or vacant land with a view to building their new home. For each of these options, there are various price points ranging from $100,000 to in excess of $750,000. First home buyers appear more active in the sub $450,000 market for both existing and newly constructed homes, however if purchasing existing homes they are generally looking to buy at a lower price point. Second plus home owners are typically upsizing or upgrading and their budgets vary depending on their desired location, house size and quality. Second plus home owners generally have families and are looking for detached housing with space for the children, both internally and externally. Proximity to amenities such as schools

and shopping play a particular role in an upgrader’s decision. The retirees of the area have in the past typically migrated to the nearby coastal towns of Yeppoon and Emu Park, however over the preceding years, there has been an increase in the number of inner city high-rise residential towers which provide a great lifestyle for those looking to downsize and reducing property maintenance which has proved popular.

Home buyers are the most prevalent buyer in the current market, with limited appetite from investors. Overall a consistent theme from first home buyers to upgraders and retirees is that there appears to be an overwhelming preference for better maintained and presented properties that require minimal, if any work. With a large number of properties on the market, buyers are discerning in what they are buying, however the right property at the right price will still attract plenty of interest from potential home owners. The major difference between home owners and investors would be that home owners are more concerned with location, price point and quality compared to investors who are focused on maximising returns. The dream may be changing, but it is still well and truly alive in Rockhampton.


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MackayThis month we discuss home ownership and its different forms within our markets. It’s such a broad topic that got us thinking about how the Mackay residential market and home ownership possibilities have changed over say the past three to five years. Prior to 2013, Mackay had one of the highest median house values in regional Queensland sitting around the $430,000 mark in 2012 and one of the major issues facing the market was affordability. Mackay had a reputation as a mining town and was often not on the radar for professions such as teachers, police, ambulance or entry level job seekers not related to mining because of the high rents and purchase price for dwellings. Even in our own business we found it extremely difficult to move our trainees to Mackay because of the high costs associated with housing.

However, since the downturn in the resource industry and flow on effects to the Mackay residential market, we saw significant falls in both house prices and rental levels across the board. This downward cycle lasted well into 2016 and saw median house prices drop by over $100,000 to sit at around the $315,000 mark, with many properties available for under and in some cases well under $300,000. While this result was has been difficult to take, it has presented opportunities in Mackay not seen in over 13 years. The issue of affordability and the ability to move non-mining related staff and employees into the region

has become easier. For example, we had an assistant valuer move to Mackay in 2012 to further her training and she was paying $375 per week rent for a small 2-bedroom walk up flat with poor quality fitout, with virtually no prospects of being able to purchase. This level of rent was unsustainable and she moved south to further her training. Since the downturn, we have been able to transfer one of our junior valuers to Mackay who now rents a 3-bedroom dwelling in Beaconsfield for $250 per week and is on the hunt to purchase a dwelling. I imagine this scenario is being played out across a variety of industries in Mackay.

This new level of affordability isn’t just rewarding the lower end of the market. We have seen this across most sectors of the market from first home owners to middle level upgraders, even to the top end prestige market. For example, in the boom to purchase good quality executive dwellings in the newer estates such as Northview Gardens, you were looking at the $600,000 plus. This may have been out of the reach of some purchasers. Since the market has fallen, we have seen a number of sales within the estate at between $450,000 and $500,000, which when combined with record low interest rates becomes more achievable.

Overall, the dream of home ownership in Mackay has become that much easier!

Whitsunday Here in the Whitsundays it appears that we are just starting to bounce back since Tropical Cyclone Debbie hit us with all her force and more!

At present there appears to be movement in the land sales area with new home buyers and upgraders jumping in and looking to build their dream home. The only problem is that there is a limited number of tradies and lots of them are working on the insurance work caused by the cyclone.

There are still so many people waiting for repairs to their homes to commence and homes being sold in their present state with the owners signing over the insurance claim to the incoming purchaser.

It is far from the normal here in the Whitsundays but it is bouncing back. There are still some southern investors entering the market but these appear to have slowed.

The rental market has moved as you can imagine with the additional tradies here to complete the insurance work and the locals not able to live in their houses while repairs take place pushing the rental market.


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TownsvilleActivity in Townsville’s residential property market is currently dominated by owner-occupiers with a number of these buyers being first time participants in our local market.

Sentiment is building in Townsville’s residential property market which is consolidating at the start of recovery phase, although the market is showing a dichotomy with the recovery in the housing sector advancing, whilst the market for land and units continues to teeter.

First time participants in the local market are buying houses across most suburbs of Townsville and include a mixture of new, semi modern and older style homes. This sector of the market would appear to be mostly active in the $300,000 to $400,000 range.

Other owner-occupiers include upgraders moving from units to houses, renovators, those moving to superior locations and downsizers. This market encompasses a wide range of values and suburbs.

Townsville’s median house price remains soft and it would appear that first time participants in the market have realised that now is the time to buy with record low interest rates, good affordability and a buyer’s market creating favourable conditions for these buyers.

CairnsThe Cairns market is best described as a steady state market that has been flatlining for some time, but nevertheless maintains a reasonable balance of market power between buyers and sellers. However it is the homeowner sector that is mostly sustaining the market, with the investor sector progressively thinning out. Cairns houses presently demonstrate a mainstream market ranging from around $250,000 to $750,000 in price, with a median level of $405,000.

The primary home buyer market typically consists of a mix of first home buyers, upgraders, downsizers and relocators from out of town. Due to an absence of new apartment construction, first home buyers wishing to utilise their grants are restricted to houses in mid to outer suburbs, where we are seeing estates for instance from Bentley Park to Gordonvale active in the $380,000 to $420,00 range with first home buyers as a target market. People relocating to Cairns from out of town, including cashed-up buyers originating from southern capitals, sustain a variety of housing styles and price points in the market and are a key demand element in areas such as the northern beaches.

Meanwhile the investor market, where it exists, typically confines to the sub $450,000 market. This arises due to purchases above this level becoming

less attractive rental propositions. For instance a new 4-bedroom, 2-bathroom house in Gordonvale with a purchase price tag of $375,000 is liable to rent for $395 to $400 per week, but when the ante is upped to a $450,000 house in the same area, the achievable rent only rises to around $450 per week due to the market topping out for affordability reasons.

Buying decisions in the Cairns market have little to do with price levels and affordability. Indeed on the affordability score the Cairns market scrubs up extremely well compared to the overheated markets of the southern capitals. The stumbling block in the Cairns market is more about job security and the confidence to borrow, but this is gradually recovering as tourism and development continue to rebuild.


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AdelaideHome buyers are active in the Adelaide market at present. The typical catch cry regarding proximity to the CBD consistently applies to the market. Detached housing (character in particular) within proximity to the CBD continues to be appealing for home buyers. There is consistent market activity from second home buyers, particularly those upgrading to a larger and/or renovated dwelling. There appears to be increased upward pressure on properties in this price range as first home buyers are consistently older than previous generations. This is causing some competition in the market as this market segment has been typically saving for a deposit for a longer period of time and is keen to secure a property.

A typical home owner in Adelaide is a family although there is continued activity from investors particularly in suburbs undergoing in-fill development. Discussions with some local agents have suggested that interest from investors in some areas has slightly declined in recent times since the recent rate rise in investment loans and the tightening of lending policies for apartments.

In the $500,000 to $800,000 price range, there is always activity in city fringe suburbs. Home buyers who can purchase a quality property under $500,000 within proximity to the CBD are typically in an appealing position.

Detached housing continues to be regarded as better by home buyers in the Adelaide market. Purchasers seeking quality property in proximity to services and the CBD are having to reconsider their options in this regard due to upward pressure on prices and decreased supply.

There is increased advertising of apartment complexes in the Adelaide CBD directed towards retirement living. We understand a soon to be completed complex on South Terrace has been primarily sold to home owners down sizing from large family homes. We will continue to monitor this market for changes in future.

Home buyers looking at attached housing may seek out higher quality fittings and fittings whilst an investor is typically seeking a low maintenance property with potentially less regard for high quality items. Also, investors generally prefer newer housing due to potential depreciation benefits.

The market on the move in Adelaide continues to be purchasers upgrading to larger properties, typically family homes.

The next generation in Adelaide haven’t given up but are having to reconsider their options. Detached housing is less attainable in some areas and first home buyers will need to consider attached housing, townhouses or units as possible alternatives.

It is becoming increasingly difficult for purchasers with a single income to enter the market at this price point without a substantial deposit to cover stamp duty in particular.

Some home buyers are purchasing their first property as an investment whilst continuing to reside in share accommodation or in their family home. As a result, there are less empty nesters as older children remain at home for longer.

Mount GambierWithin the Mount Gambier region, home buyers are presently active in the current market. The graph below shows house sales increasing since 2014, with 2017 appearing to continue in a similar trend. With interest rates still at low levels and the local market showing stronger demand than in previous years, it is likely that these sales numbers will remain stable throughout 2017. Under the current market conditions we do not see a foreseeable decrease in sales numbers.


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A typical home owner in Mount Gambier could be a first home buyer, a family or an empty nester. First home buyers are generally younger and look for a property that is within the $150,000 to $250,000 price range. Families are generally after a home that has 3- to 4-bedrooms and perhaps two living areas and is within the price range of $250,000 to $450,000. For empty nesters it is varying. They may be looking to downsize from a large family home. They are pretty flexible and may choose to either buy or build a modern, smaller dwelling for easier maintenance. A lot of empty nesters are also selling and following their children to university or even packing up and travelling.

With the construction grant still in place for first home buyers, it is still common for first home buyers to build their first home. These homes are generally within the price range of $250,000 to $350,000.

So, there are a number of options for home buyers within the Mount Gambier region, whether it be buying or building. Home buyers will generally buy or build detached houses on decent sized allotments. In the cities, attached housing may be a popular option for home buyers however, in regional areas attached housing isn’t prevalent as we’re still in a position where houses are detached and are on good sized allotments of approximately 600 to 1,000 square metres. Therefore, attached housing isn’t really a factor in the region at this point in time.

In recent years, the upper end of the market has been on the rise. Houses from $400,000 and above are typically purchased or built by families looking to upgrade to suit their needs and something within this price range is generally more affordable for them, compared to first home buyers.

In the south-east of South Australia, housing affordability is still good in the current market, with basic houses starting from as low as $150,000. There are a variety of properties available that are affordable relative to wages so therefore those looking to enter the market can easily do so.


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Some property market commentators are predicting that 2017 could see Tasmania turn over its highest volume of residential property sales in more than ten years if property sales continue at the same pace as they have in the first half of this year.

The north has experienced the greatest percentage increase in residential sales volumes when compared to the same period last year. This may be as a result of reported stock shortages and capital growth in the south with buyers looking further afield for investment opportunities.

It would appear that prospective home owners have more competition from investors as reported investor purchasing has increased and currently represents a 20% to 25% chunk of residential property transactions. Interstate investor activity has also increased. With Tasmanian investors achieving average gross yields of 5.2% and Hobart out performing all other capital cities it seems the returns on offer in Tasmania are capturing more investor attention.

The upgrader or second home buyer price bracket is where buyers are most active within Hobart’s residential property market.

Glenorchy and Claremont are experiencing the greatest amount of entry level sales activity. Both suburbs are north-west of Hobart approximately ten and fifteen kilometres respectively north-west of the city centre. The Museum of Old and New Art

(MONA), a popular tourist destination sits within an approximately three kilometre radius of both Glenorchy and Claremont. Examples of recent sales in Glenorchy include an older style, 2-bedroom, 1-bathroom unit in original condition which sold for $225,000 and an older style, dated, 3-bedroom, 1-bathroom home with single garage that backs onto Hobart’s show grounds that was purchased for $297,500.

Sandy Bay, Kingston and Howrah are areas where upgraders or second home buyers are focusing their attention. Sandy Bay is popular due to its position immediately south of the city with the Derwent River forming its southern border. Contained within the suburb are the University of Tasmania campus, casino, private and public schools, local shops and recreational facilities. Recent sales within this price bracket in Sandy Bay include an older style, first floor, renovated, waterfront 2-bedroom, 1-bathroom unit with uninterrupted water views and single carport which recently sold for $850,000 and a renovated, 4-bedroom, 2-bathroom, period terrace that transacted for $985,000.

Within Hobart’s prestige market a modern Sandy Bay home offering 5-bedrooms, 5-bathrooms, indoor pool and double garage with views of the Derwent River recently sold for $3 million.

Similar levels of activity are occurring in the first home buyer and upgrader price brackets of the northern residential market.

The greatest activity occurring in Launceston’s more affordable suburbs is taking place in Newnham, Invermay and South Launceston. Newnham is located approximately five kilometres on the northern outskirts of Launceston and is predominantly residential with the University of Tasmania and The Australian Maritime College located nearby. Properties that have recently sold in Newnham include a modern, 2-bedroom, 1-bathroom unit with one off street carpark which sold for $255,000 and an older style, renovated, 5-bedroom, 2-bathroom home with double garage that sold for $270,000.

Within the upgrader residential market segment Riverside, Newstead and Legana are proving to be the most popular with purchasers. Riverside is located along the western side of the Tamar River and is well contained with a shopping centre, public and private schools and sporting facilities. It is approximately a six kilometre commute to the city centre. A modern, 4-bedroom, 3-bathroom home with double garage and river views was recently sold in Riverside for $610,000 and a modern, 3-bedroom, 2-bathroom unit with river views and double garage sold for $360,000.

A recent notable sale in Launceston was for $1.4 million for a modern, 4-bedroom, 3-bathroom home located at Launceston’s Seaport overlooking the Tamar River.


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DarwinHome ownership has become more of a reality in Darwin over the past two years. With the market continuing to soften, home owners now have an abundance of choice in regard to what they can purchase. Currently home owners are most active in the developing estate of Zuccoli in Palmerston and the newly released Northcrest development in Berrimah. Home owners have also started to become active in the northern suburbs and Palmerston dwelling markets. However, semi-detached and attached units still seem to be struggling across all sectors of the market.

Vacant land continues to be a staple for home owners. As developers continue to release land in both Zuccoli and the Northcrest development which is now starting to come online, home owners continue to gravitate towards this segment of the market. Although established dwellings have decreased in value, the option of new builds remains attractive to home owners, in particular first home owners. This is primarily due to attractive government incentives to purchase new land that is becoming cheaper and builders’ margins decreasing (we have seen rates as low as $1,700 per square metre in comparison to $2,000 and above in the peak periods of the market).

Within the established market, home owners are active in the northern suburbs in particular. Suburbs in this area such as Leanyer, Anula, Wagaman and Karama have had a number of sales transact since the start of 2017 and this has primarily been to home owners. These suburbs seem to be attractive as they are affordable and allow consumers to purchase a structurally sound dwelling on a decent size block all within close proximity of the Darwin CBD. We have seen sales as low as $360,000 for a basic 3-bedroom, 1-bathroom, ex-government dwelling in the less preferred suburb of Karama and basic 3-bedroom, 1-bathroom dwellings sell for $460,000 in the more preferred section of Leanyer.

Other areas also active within the established dwelling market in Palmerston are Gunn, Rosebery and Durack. Home owners have taken advantage of the declining value levels and we have seen sales as low as $410,000 in Durack for a 3-bedroom, 2-bathroom dwelling. Gunn has also produced some good buying with a basic 3-bedroom, 2-bathroom dwelling selling for $370,000.

The unit market continues to struggle as the Darwin CBD is completely saturated with stock. Potential purchasers are faced with the decision of why buy today when I can buy tomorrow for cheaper. Inner city semi-detached units are tightly held and when

they come onto the market seem to be received well. However, the Palmerston market has continued to struggle as semi-detached units now compete price wise with dwellings in the less preferred sections of Gray, Moulden and Woodroffe.

As value levels continue to decline across all sectors of the market, home ownership can be achievable in Darwin. Add in the RBA’s recent decision to keep the cash rate on hold and attractive government incentives for purchasing existing stock or building a new dwelling and the market is ripe for potential home owners, particularly first time purchasers. However, the greatest obstacle the NT property market currently faces is the declining population growth. As more people decide to move interstate this will continue to have a ripple effect on the property market as buyers do not consider Darwin to be a long term place of residence. Until we achieve stronger population growth we will not see a dramatic increase in the level of home occupancy throughout Darwin.

Alice Springs Due to changes in the market in recent times we have seen investors become less active in the Alice Springs market, with the vast majority of transactions relating to home occupiers.


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We are currently seeing activity from first home buyers after a quiet period for the occupiers. We are also seeing good activity to upgraders locally, however the empty nesters and downsizers are very quiet due to these purchasers typically leaving town to be close to family, making way for new entrants.

In the first home buyers category we typically see activity up to around $500,000 with a broad range of property from older style units to renovation projects or new larger homes. More recently we have seen a trend more towards newer property, particularly with the emergence of the newest suburb in Alice Springs, Kilgariff. This is largely as a result of the first home buyers grant available for builds or newly constructed dwellings.

We have also seen an increase in the range of property available to first home buyers such as newly renovated bed sit units, not previously available in the local market.

Going forward we are likely to see more first home buyer and home occupier activity as confidence returns to the market after a subdued period with Kilgariff now taking shape and plenty of other options around the existing suburbs.


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PerthOver the previous 18 months, we have often used terms such as subdued to describe the Perth residential market, but there are definite signs that this is changing. Whilst the Real Estate Institute of Western Australia’s June quarterly results indicate that sales activity is at a five year low, the weekly sales rates indicate that there are blips of activity in the market. Discussions with selling agents reveal more frequent incidents of multiple offers on properties and a higher level of open home attendance at lower price levels. The number of properties advertised for sale has declined over the previous 12 months, from 14,000 to 13,200 – with the market commonly interpreting 12,000 as a balanced market. Given that in an average week, 500 sales are recorded in the Perth metro area, a short period of undersupply could lead to a market correction in a very short period of time.

The market appears to be at the stage of understanding that the window of opportunity to pick the bottom of the market is narrowing, with a level of optimism becoming apparent.

First home buyers remain tempted by incentives and rebates being offered in urban fringe locations, with such incentives ranging from small cash bonuses all the way to free cars and outrageous claims of tripling the first home buyers grant – for free. Such

incentives can be difficult to track and can also be inconsistent throughout various estates, which makes it very difficult for buyers to interpret which estates offer the best value proposition. We urge all such buyers to consider advice from an independent property professional to sort through what are genuine offers – and what is actually a bitter bit of candy. Whilst it’s a great time to get into the market, if a buyer is only able to jump in by relying on convoluted finance offerings or side incentives, we strongly urge restraint.

For those in a stronger financial position, there are many sectors showing the effects of an increase in demand and prices remain historically low.

At the lower end of the market, we are seeing an increase in activity in established areas such as Thornlie in the south and Padbury in the north. Whilst well presented properties appear to be attracting the most interest, there has also been an uplift in transactions of renovators delights with buyers appearing to be leapfrogging more traditional first home buyer areas located further from the CBD. We consider both areas to offer an appealing mixture of affordability, proximity to infrastructure and traditional style housing on traditional sized allotments – all within reasonable proximity to the CBD.

In the middle price brackets, the market is more discerning, but there are also signs of green shoots. Duncraig in the north and Willetton/Bull Creek in the south are all experiencing an increase in activity, with stock levels fluctuating accordingly. These areas remain price sensitive and incorrectly priced properties are floundering, but well priced properties are often transacting in the initial weeks of marketing.

At the upper end, activity remains patchy, but very strong in certain areas. Nedlands in particular appears to be experiencing a surge of demand with stock levels declining. Similar activity has been seen through Cottesloe and Applecross and appears to be driven by owner occupiers upgrading into particular pockets that they have been aspiring to achieve.

All in all, the market is ripe for owner occupiers to make a purchasing decision. Many speculators have already called the bottom of the market and they may well be right – just not in all areas. Many areas remain price sensitive, but the ability to snag a bargain is becoming harder by the week.

South West WAThe major centres throughout the South West have seen sales volumes continue to remain relatively stable, however the residential market within rural residential localities and inland townships


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throughout the South West have continued to soften. The swings of the Perth market during the past several years have been missed in the regions as the South West is still benefiting from a strong population growth because people in general want to live here, employment permitted, as the region is characterised by pristine beaches, surf and its world renowned wine region.

Entry points into the lower end of the market range from $250,000 to $400,000 and for this amount you can purchase either a basic established residence or build a project home in one of the outlying new developments. These established homes are in general located in closer proximity to the beach than the new developments and as such the established homes generally offer better capital growth potential while the new housing market offers better yields. The lower market segment is generally being driven by first home buyers and also investors.

The stable condition of the lower market segment consequently has a flow on effect into the middle market as vendors of the lower market segment are looking in effect to trade up. It is generally the mums and dads that are active in this space as they are looking to upgrade the family home and currently this market segment is offering good value for money. This market segment is considered to be stable, however we note that it is not performing as well as the lower market segment.

This is understandable given the higher price range resulting into fewer prospective purchasers. While there seems to be a healthy balance between supply and demand the selling periods are in general longer than the lower market segment.

Unfortunately, the upper end of the market is considerably slower than the lower and middle market segments. Properties above $1 million are selling if they are priced correctly, however extended selling periods between six to 12 months are still common. This is a reflection of the limited amount of prospective purchasers in this price bracket.

That being said, the South West is considered to be a premium holiday destination and there is still demand from the wealthy to invest and holiday in the region. Therefore prestigious properties scattered throughout the South West, such as Naturaliste, Eagle Bay, Metricup and Yallingup are still regularly recording sale prices in excess of $1 million.

In conclusion, the South West market is generally stable as the weakening state economy is somewhat offset by a growing population that is characterised by a wide range of owners from home buyers, investors, families and retirees.


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OverviewWhat goes up must come down!

While not always the case in markets it is fair to say that quick shifts in upward directions are often met with equally quick shifts in the opposite direction to bring a market back to a longer term average trend line. So what is the potential for the rural landscape to see a change of direction?

The 2015 and 2016 into early 2017 years have seen large value movements in most regions and commodity types nationally. In hindsight it is easy to see that falling interest rates, new free trade agreements (FTRAs), reducing energy costs and fuel prices, falling Australian dollar, increasing commodity prices and generally good seasonal conditions in most regions barring Western Queensland have contributed to this, the impact combining to move market sentiment and values paid for most assets. So what is the impact of these drivers reversing? Other than the FTRAs, we have started to see the shift and this may also coincide with one capital market in Chinese investment having also further restrictions placed on agricultural land investment if outside the new framework announced by the Chinese Government.

The dollar rising, energy costs rising, some commodity prices falling (cattle, grains of the past six months but some bounces around), cost of debt on the rise and drier overall conditions in most regions have in this punter’s view seen a levelling of demand – not a crash by any means, but a shift none the less and lower sales activity would be expected. Does this mean values will correct as well? It is too early to tell this and given that supply has been very tight, we may not see any real change for a while yet, however most parties I speak with are not expecting a lot more upside in the short term and some are looking for a levelling out of values given that the economics of some markets are hard to justify the returns. There are and always will be exceptions and I expect we will see some record sales on a rate per HA/DSE/AE or other measure reflected in the near term. Agriculture is a long game investment and that is my focus in this note. Looking through the sharp upward cycle, what is on the other side and what else influences the current market sentiment? What is patient capital seeking and can it find value today with the current variables of market forces that influence the decision makers?

Next month in my absence, I will be asking the team to do up a local review of what they are seeing within the leasing market of rural property, comment on drivers for transactions and provide a general overview of potential returns that they have evidenced in the market. Finding the data is the hard part of this challenge I have set the team and the results will be interesting I think for many readers and investors.

Contact: Tim Lane National Director, Rural07 3319 4400

Southern QueenslandSeasonal conditions in the southern part of the state have been unfavourable which is now impacting on both graziers and farming operators. The abnormally hot winter season followed by dry westerly winds in late August has significantly reduced pastures and also brought evidence of crop stress. On the outer Downs and within the Toobeah area, losses to pulse and grain crops have been reported. Combined with the dry seasonal conditions over the past month, the cattle market has seen a significant drop in value. The EYCI is currently sitting at 543 for late


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August, down from 725 this time last year (> 25%) and 570 for August 2015 (> 5%). No doubt the beef market has enjoyed two plus years of solid returns which has provided confidence to the sector and ultimately translated to strong property prices, but the question is now being asked on the back of weaker cattle market conditions whether the fundamentals are aligning for land values to now level off. Like any sound business model, with any weakening of business returns there must be some market shift to maintain the link between profitability and associated market risks. Another influence in the market that has the greater potential to weaken market confidence is seasonal conditions. There isn’t any part of the southern area of the state that can boast to have had an exceptional season this year. If anything the market for Western Queensland and particularly the red Mulga Woodland hasn’t seen the same levels of land value growth in comparison to their eastern neighbours which can been put down to prolonged dry seasonal conditions. The Bureau of Metrology has indicated that for southern Queensland there is a 45% to 50% chance of receiving average rainfall between September and November but a 60% to 70% chance of above median maximum temperatures for the same period. So with the weakening in cattle prices and poor seasonal outlook this may ultimately weaken confidence at the present level. Will this weaken property values? Maybe, but then if the market

reacted to volatile commodity prices and poor seasonal outlook, the property market wouldn’t be where it is today and hence must be viewed over a medium to long term economic outlook.

Transactions for this time of year are historically down and agents continue to report the lack of quality listings. Recent sales include that of Mayfield, a 19,431 hectare holding 45 kilometres west of Charleville and bisected by the Quilpie Road. The property is a typical red Mulga block with adequate building improvements and surface dams combined with reticulated bore water. The property transacted off-market for $74 per hectare and was encumbered by a carbon project. To the west of Morven, Glenba, a 6,057 hectare soft red and chocolate Buffel block has sold for $3,750,500 or $619 per hectare ($250 per acre) which continues to show the strengthening in the Morven/Augathella area after Mareto sold earlier in the year for $704 per hectare ($285 per acre).

Contact: Stephen Cameron / Doug Knight - ph: 07 4639 7600

Central QueenslandA substantial cane farm in the Proserpine district has been purchased by non local buyers. Six Mile was sold in June with crop plant and equipment. Of a total area of 234.96 hectares, it has an irrigated cane land area of 219.9 hectares held over five adjoining

and adjacent freehold titles. The reported average annual production of the farm is 17,000 tonnes. It is located approximately 22 kilometres north-west of Proserpine at the end of the Up River Road and has a combined supplemented allocation of 983 megalitres from the Proserpine River. The sale price is confidential, however upon analysis we conclude that the rate per hectare is consistent to slightly stronger than previous benchmarks set by sales of smaller, dress circle farms which have been thinly traded over the past two to three years. To our knowledge this is the largest sale in the Proserpine Mill area since the change of ownership from the growers co-operative to Singapore -based Wilmar International in 2012.

Contact:Greg Williams - ph: 07 4927 4655

EchucaDemand for cropping holdings appears to have finally tapered, albeit slightly, on the back of a very dry spell from the early break to early August. Nevertheless agents would be happy to list as much cropping and grazing country as they can find. Dairy holdings are still more challenging though there appears to have been a spate of sales for smaller holdings which can be utilised for non dairying pursuits.

Contact:David Leeds - ph: 03 5480 2601


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MilduraWATER: The new water season has opened positively and has been further boosted by good rainfall (and snowfall) across the northern Victorian and southern NSW catchments over recent weeks, which has increased inflows to all Murray Valley storages.

As at 18 August 2017, the New South Wales Murray High Security allocation is at 97% and General Security at 13%. Victorian Murray River High Reliability Water Share allocations are sitting at 70% and South Australian Murray River irrigators have a 100% allocation.

The total active Murray Darling Basin Authority storage is at 69%.

Current permanent water values are as follows, noting that these levels include the benefit of the 2017/18 allocation:

• NSW Murray High Security - $3,400 to $3,500 per megalitre;

• Victorian High Reliability (Zone 7) - $3,000 to $3,100 per megalitre.

• South Australian Irrigation Entitlement - $2,950 to $3,050 per megalitre.

The temporary water allocation leasing market is presently trading at around $135 to $145 per megalitre across the Murray Darling region.

WINE INDUSTRY: Recently released data from the Murray Valley Wine Growers shows that the overall total crush in the Murray Valley region was down 2% to 360,000 tonnes in 2017 compared to 368,000 tonnes in 2016. The good news is that the value of total crush sold was up by $12 million with the overall average price increasing from $320 per tonne to $357 per tonne.

On a national basis the total crush was up by 5% to 1.93 million tonnes, whilst a 13% rise in value terms to $1.22 billion was recorded. The average purchase price nationally rose by 7% to $565 per tonne.

Wine exports reportedly rose by almost 10% year on year in value terms and 7% in volume. China exports rose a staggering 44% year on year in value terms and the USA showed 3% growth in value terms. The US rise is positive news as this growth was in the higher end of that market. The value of exports to the UK fell which is due to a number of issues including the falling value of the pound sterling, exiting the EU and the hung parliament following the election.

SALES: Property sales activity has continued in the past month with several properties across all agricultural sectors transacting. Some notable pastoral sales include:

• Eaglehawk Station, NSW, a 28,240 hectare holding which sold at auction on 28 July 2017

for a reported $3.45 million bare. The property comprises open, undulating red grazing country and is located 80 kilometres south of Broken Hill and 295 kilometres north of Mildura. The property was well improved with a 5-bedroom homestead, large wool shed and has equipped bores supplying water. The sale shows $122.50 per hectare or well over $500 per DSE which is an unprecedented level for the Broken Hill region.

• Gundalundie Station, NSW, an 11,685 hectare holding which sold privately earlier in 2017 and recently settled for $2,887,400 bare. The property comprises open blue bush grazing country and is located approximately 80 kilometres south of Ivanhoe and 175 kilometres north-west of Hay in the Mossgiel area. The property was improved with a traditional homestead, large wool shed and good yards and has equipped bores supplying water. The sale shows $247.10 per hectare which is well in excess of any sale level in this region.

• Martins Well Station, SA, a major holding in the Flinders Ranges region recently sold on a walk in walk out basis for $5,975,000. The property comprises 100,500 hectares and is located 90 kilometres north-east of Hawker and 450 kilometres north-east of Adelaide. It generally comprises open grass plains with blue and salt bush along with rocky outcrop sections. It has excellent water improvements and extensive


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building improvements including a 5-bedroom stone homestead, seven stand wool shed and several sheep and cattle yards. The sale included almost 6,000 merino sheep, 500 Hereford cattle and some nominal plant. The pastoral board maximum stocking rate is 12,900 dry sheep equivalents. After allowances for the live stock and plant, the sale shows an overall $49.50 per hectare and $385/DSE based on the pastoral board maximum stock rating.

Contact:Shane Noonan - ph: 03 5021 0455

Northern TerritoryAlthough the general perception for the NT pastoral market is that things may have peaked, there are still sales taking place that suggest strong confidence in the northern beef industry’s foreseeable future. Conways Station (1,392 square kilometres) located on the Central Arnhem Road 180 kilometres east-north-east of Katherine has contracted for close to the $9 million (walk in walk out) asking price. The property, which borders Arnhem Land to the north, had been on the market since around January 2016 initially asking around $9.3 million walk in walk out with approximately 4,500 head and a small amount of plant. The property is reportedly under contract for sale to an Australian based company. We understand that the purchaser is investing in the property primarily for its pastoral use and did not

place significant value on the property’s tourism/hunting business opportunity. The existence of the carbon credit contract in place (reportedly capable of generating between $70,000 and $100,000 profit per annum) reportedly positively influenced the purchase price. This is a strong sale and by our estimations of current carrying capacity would push the $/AE above $1,700.

Meanwhile we are aware of another three large scale northern cattle stations (ie. 20,000 AE + carrying capacity) that are at advanced stages of negotiations for sale. While there appears to be a wider range of value levels ($/AE) being paid for smaller scale cattle stations in the north of the NT (mainly due to the amplifying effect that every additional dollar spent has on the $/AE over a smaller carrying capacity - refer Table 1 beside) these larger scale sales, if they occur, should give us a better indication on where values currently sit, particularly now that cattle prices have come off the boil (refer Table 2).

Contact:Frank Peacocke - ph: 08 8941 4855


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Table 2

Property Market Indicators

© Herron Todd White Copyright 2017

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Capital City Property Market Indicators - Houses


Capital City Property Market Indicators – Houses

Factor Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra

Rental Vacancy Situation Balanced market Shortage of available property relative to demand -Balanced market

Over-supply of available property relative to demand

Balanced market Over-supply of available property relative to demand


Balanced market

Rental Vacancy Trend Steady Tightening - Steady Increasing Steady Increasing Tightening Steady Steady

Demand for New Houses Strong Strong Fair Fair Soft Fair Fair Strong

Trend in New House Construction Steady Steady Increasing Increasing Declining Declining Declining Increasing

Volume of House Sales Steady Steady Steady Steady Increasing Steady Steady Steady

Stage of Property Cycle Peak of market Approaching peak of market

Start of recovery Rising market Bottom of market Rising market Bottom of market Rising market

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Almost never Occasionally Occasionally Occasionally Occasionally Almost never Occasionally Occasionally

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating


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Capital City Property Market Indicators - Units


Capital City Property Market Indicators – Units

Factor Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra

Rental Vacancy Situation Balanced market Balanced market -Over-supply of available property relative to demand



Balanced market Large over-supply of available property relative to demand

Balanced market

Rental Vacancy Trend Increasing Steady - Increasing Increasing Steady Increasing Tightening Steady Steady

Demand for New Units Soft Soft Very soft Fair Soft Fair Very soft Fair

Trend in New Unit Construction Steady Steady - Increasing Declining significantly

Increasing Declining Declining Declining significantly

Increasing

Volume of Unit Sales Steady Declining Declining significantly

Steady Steady Steady Steady Steady

Stage of Property Cycle Starting to decline Peak of market Declining market Bottom of market Declining market Rising market Approaching bottom of market

Declining market


Occasionally Occasionally Very frequently Occasionally Occasionally Almost never Frequently Frequently



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1

1

Capital City Property Market Indicators - Retail


Capital City Property Market Indicators – Retail Factor Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra

Rental Vacancy Situation Shortage of available property relative to demand - Balanced market

Balanced market Balanced market Over-supply of available property relative to demand





Rental Vacancy Trend Tightening Increasing Steady Steady Increasing Steady Steady Steady

Rental Rate Trend Increasing Declining Stable Declining Declining Declining Stable Stable

Volume of Property Sales Steady Steady Steady Steady Steady Steady Declining Steady

Stage of Property Cycle Approaching peak of market

Approaching peak of market


Start of recovery Bottom of market Rising market Bottom of market Approaching peak of market

Local Economic Situation Steady growth Flat Steady growth Contraction Contraction Flat Contraction Flat

Value Difference between Quality Properties with National Tenants, and Comparable Properties with Local Tenants

Small - Significant Large Small Large Significant Significant Significant Significant

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating


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New South Wales Property Market Indicators - Houses


New South Wales Property Market Indicators – Houses

Factor Albury Bathurst Canberra Central Coast

Coffs Harbour Lismore Mid North

Coast Newcastle Orange South East NSW Sydney Tamworth

Rental Vacancy Situation Balanced market


Balanced market

Balanced market

Balanced market

Shortage of available property relative to demand -Balanced market

Balanced market

Shortage of available property relative to demand


Balanced market

Balanced market

Balanced market

Rental Vacancy Trend Steady Steady Steady Steady Tightening Tightening -Steady

Steady Tightening Steady Tightening -Steady

Steady Steady

Demand for New Houses Fair Strong Strong Strong Strong Fair - Strong Strong Very strong Strong Strong Strong Fair

Trend in New House Construction Declining Increasing Increasing Steady Increasing Steady -Increasing

Steady Declining Increasing Increasing Steady Steady

Volume of House Sales Steady Increasing Steady Steady Steady Increasing -Steady

Steady Increasing Increasing Steady Steady Steady

Stage of Property Cycle Rising market Rising market Rising market Peak of market

Peak of market

Rising market Approaching peak of market

Peak of market


Peak of market

Rising market


Occasionally Almost never Occasionally Occasionally Almost never Occasionally - Frequently

Occasionally Almost always

Almost never Occasionally Almost never Occasionally



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New South Wales Property Market Indicators - Units


New South Wales Property Market Indicators – Units

Factor Albury Canberra Central Coast

Coffs Harbour Lismore Mid North

Coast Newcastle South East NSW Sydney Tamworth


Balanced market


Balanced market

Shortage ofavailable property relative to demand -Balanced market

Balanced market


Balanced market

Balanced market

Balanced market

Rental Vacancy Trend Steady Steady Steady Tightening Tightening -Steady

Steady Tightening Tightening -Steady

Increasing Steady

Demand for New Units Fair Fair Very strong Strong Fair - Strong Strong Strong Strong Soft Soft

Trend in New Unit Construction Steady Increasing Steady Increasing Declining -Steady

Steady Declining Increasing Steady Declining

Volume of Unit Sales Steady Steady Increasing strongly

Steady Increasing -Steady

Steady Increasing Steady Steady Steady

Stage of Property Cycle Rising market Declining market

Peak of market

Peak of market


Peak of market


Starting to decline

Rising market


Occasionally Frequently Occasionally Occasionally Occasionally -Frequently

Almost never Almost always

Occasionally Occasionally Occasionally



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New South Wales Property Market Indicators - Retail


New South Wales Property Market Indicators – Retail Factor Canberra Coffs Harbour Lismore Mid North Coast Newcastle South East NSW Sydney Tamworth

Rental Vacancy Situation Over-supply of available property relative to demand



Balanced market Balanced market Balanced market Shortage of available property relative to demand - Balanced market


Rental Vacancy Trend Steady Steady Increasing Tightening Steady Steady Tightening Steady

Rental Rate Trend Stable Stable Declining Increasing Stable Stable Increasing Stable

Volume of Property Sales Steady Increasing Steady Increasing Steady Increasing Steady Declining



Rising market Rising market Rising market Rising market Approaching peak of market

Rising market

Local Economic Situation Flat Flat Flat Steady growth Steady growth Steady growth Steady growth Steady growth


Significant Significant Significant Small Significant Small - Significant Small - Significant Significant



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Victoria/Tasmania Property Market Indicators - Houses


Victorian and Tasmanian Property Market Indicators – Houses

Factor Ballarat Bendigo Echuca Wellington Horsham Melbourne Mildura Warrnambool Burnie/ Devonport Hobart Launceston


Balanced market


Large over-supply of available property relative to demand

Balanced market - Over-supply of available property relative to demand

Shortage of available property relative to demand -Balanced market

Balanced market

Balanced market

Balanced market

Balanced market

Balanced market

Rental Vacancy Trend Steady Steady Steady Steady Steady Tightening -Steady

Steady Steady Tightening Tightening Tightening

Demand for New Houses Fair Fair Strong Soft Fair Strong Fair Soft Fair Fair Fair

Trend in New House Construction

Increasing Steady Declining Increasing Steady -Increasing

Steady Steady Steady Declining Declining Declining

Volume of House Sales Steady Steady Steady Steady Steady -Declining

Steady Steady Steady Steady Steady Steady

Stage of Property Cycle Rising market Rising market Rising market Start of recovery

Start of recovery


Start of recovery

Start of recovery

Rising market Rising market Rising market


Occasionally Occasionally Occasionally Occasionally Almost never Occasionally Almost never Almost never Almost never Almost never Almost never



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Victoria/Tasmania Property Market Indicators - Units


Victorian and Tasmanian Property Market Indicators – Units

Factor Ballarat Bendigo Echuca Horsham Melbourne Mildura Warrnambool Burnie/ Devonport Hobart Launceston


Balanced market Balanced market Balanced market - Over-supply of available property relative to demand


Balanced market Balanced market Balanced market Balanced market Balanced market

Rental Vacancy Trend Increasing Steady Steady Steady Steady -Increasing

Steady Steady Tightening Tightening Tightening

Demand for New Houses Soft Fair Fair Fair Soft Fair Soft Fair Fair Fair


Increasing Steady Steady Steady -Increasing

Steady -Increasing

Steady Steady Declining Declining Declining

Volume of House Sales Steady Steady Steady Steady -Declining

Declining Steady Steady Steady Steady Steady


Rising market Rising market Start of recovery Peak of market Start of recovery Start of recovery Rising market Rising market Rising market


Occasionally Occasionally Almost never Almost never Occasionally Almost never Occasionally Almost never Almost never Almost never



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Victoria/Tasmania Property Market Indicators - Retail


Victorian and Tasmanian Property Market Indicators – Retail

Factor Ballarat Bendigo Echuca Melbourne Mildura Burnie/ Devonport Hobart Launceston

Rental Vacancy Situation

Balanced market Balanced market Balanced market Balanced market Balanced market Over-supply of available property relative to demand



Rental Vacancy Trend

Tightening Steady Steady Increasing Steady Steady Steady Steady

Rental Rate Trend

Stable Stable Stable Declining Stable Declining Declining Declining

Volume of Property Sales

Increasing Steady Steady Steady Steady Steady Steady Steady

Stage of Property Cycle

Rising market Rising market Rising market Approaching peak of market

Start of recovery Rising market Rising market Rising market

Local Economic Situation

Steady growth Flat Flat Flat Steady growth Flat Flat Flat


Small Significant Small Large Large Significant Significant Significant



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Queensland Property Market Indicators - Houses


Queensland Property Market Indicators – Houses

Factor Cairns Townsville Whit-sunday Mackay Rock-

hampton Emerald Gladstone Bunda-berg

Hervey Bay

Sunshine Coast Brisbane Ipswich Gold Coast Too-

woomba Rental Vacancy Situation Shortage of

available property relative to demand

Balanced market

Severe shortage of available property relative to demand

Balanced market


Balanced market


Balanced market

Balanced market

Balanced market




Balanced market

Rental Vacancy Trend Steady Tightening - Steady

Tightening sharply

Tightening - Steady

Increasing Steady Tightening Steady Steady Steady Increasing Increasing Tightening Steady

Demand for New Houses Soft Fair Fair Fair Fair Soft Fair Soft Fair Strong Fair Fair Strong Soft


Declining Steady Steady Steady Steady Steady Increasing Steady Increasing Increasing Increasing Increasing Increasing Steady

Volume of House Sales Steady Steady Steady Increasing Steady Steady Steady Steady Increasing Steady Steady Steady Steady Steady

Stage of Property Cycle Start of recovery

Start of recovery

Start of recovery

Bottom of market

Approaching bottom of

market

Start of recovery

Bottom of market

Approaching bottom of market

Start of recovery


Start of recovery

Start of recovery




Occasion-ally

Almost never

Occasion-ally

Occasion-ally

Occasion-ally

Occasion-ally

Occasion-ally

Almost never

Occasion-ally

Occasion-ally

Occasion-ally

Occasion-ally

Occasion-ally

Frequently



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Queensland Property Market Indicators - Units


Queensland Property Market Indicators – Units

Factor Cairns Townsville Whit-sunday Mackay Rock-

hampton Emerald Gladstone Bunda-berg

Hervey Bay

Sunshine Coast Brisbane Ipswich Gold

Coast Too-

woomba Rental Vacancy Situation Shortage of



Severe shortage of available property relative to demand





Balanced market

Balanced market

Balanced market


Balanced market

Balanced market


Rental Vacancy Trend Tightening Tightening -Steady

Tightening sharply

Steady Steady Steady Tightening Steady Steady Steady Increasing Increasing Steady Increasing

Demand for New Units Very soft Soft Fair Soft Soft Very soft Soft Soft Fair Fair Very soft Fair Soft Soft

Trend in New Unit Construction

Declining Steady Steady Declining Steady Declining significantly

Steady Steady Steady Increasing Declining significantly

Increasing Increasing Declining

Volume of Unit Sales Steady Steady Steady Steady Steady Steady Steady Declining Increasing -Steady

Steady Declining significantly

Steady Steady Declining

Stage of Property Cycle Bottom of market

Start of recovery

Bottom of market



Bottom of market



Start of recovery

Rising market

Declining market

Start of recovery

Peak of market



Occasion-ally

Almost never

Almost never

Occasion-ally

Almost never

Occasion-ally

Occasion-ally

Almost never

Occasion-ally

Occasion-ally

Very frequently

Frequently Frequently Occasion-ally



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Queensland Property Market Indicators - Retail


Queensland Property Market Indicators – Retail Factor Cairns Townsville Mackay Rock-

hampton Emerald Gladstone Wide Bay Sunshine Coast Brisbane Gold Coast Toowoomba

Rental Vacancy Situation Balanced market - Over-supply of available property relative to demand






Balanced market

Shortage of available property relative to demand - Balanced market

Balanced market

Balanced market

Balanced market

Rental Vacancy Trend Steady Steady Increasing Steady - Increasing

Steady Steady Steady Steady Steady Tightening Steady - Increasing

Rental Rate Trend Stable Declining - Stable

Declining Declining - Stable

Stable Stable Stable Stable - Increasing

Stable Stable - Increasing

Stable

Volume of Property Sales Steady Steady Declining Steady Steady Steady Steady Steady Steady Increasing - Steady

Steady - Declining

Stage of Property Cycle Start of recovery Bottom of market


Start of recovery Bottom of market

Bottom of market

Bottom of market



Rising market

Local Economic Situation Flat Flat Contraction Flat Flat Flat Flat Steady growth Steady growth Steady growth Flat - Contraction


Small Significant Large Significant Small Small - Significant

Large Small - Significant

Small Small Significant - Large



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Northern Territory, South Australia & Western Australia Property Market Indicators - Houses


SA, NT and WA Property Market Indicators – Houses

Factor Adelaide Adelaide Hills Barossa Valley Iron Triangle Mount Gambier Alice Springs Darwin Perth South West

WA Rental Vacancy Situation Balanced market Balanced market Balanced market Balanced market Shortage of




Balanced market

Rental Vacancy Trend Steady Steady Steady Steady Tightening Steady Steady Increasing Steady

Demand for New Houses Fair Fair Fair Fair Fair Fair Fair Soft Fair

Trend in New House Construction Increasing Increasing Increasing Increasing Steady Steady Declining Declining Declining

Volume of House Sales Steady Steady Steady Steady Increasing Steady Steady Increasing Steady

Stage of Property Cycle Rising market Rising market Rising market Rising market Rising market Bottom of market Bottom of market Bottom of market Start of recovery


Occasionally Occasionally Occasionally Occasionally Occasionally Almost never Occasionally Occasionally Almost never



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Northern Territory, South Australia & Western Australia Property Market Indicators - Units


SA, NT and WA Property Market Indicators – Units

Factor Adelaide Adelaide Hills Barossa Valley Iron Triangle Mount Gambier Alice Springs Darwin Perth South West WA

Rental Vacancy Situation Balanced market Balanced market Balanced market Balanced market Shortage of available property relative to demand

Balanced market Large over-supply of available property relative to demand


Balanced market

Rental Vacancy Trend Steady Steady Steady Steady Tightening Steady Steady Increasing Steady

Demand for New Units Fair Fair Fair Fair Soft Fair Very soft Soft Fair

Trend in New Unit Construction Increasing Increasing Increasing Increasing Steady Steady Declining significantly

Declining Declining

Volume of Unit Sales Steady Steady Steady Steady Increasing Steady Steady Steady Steady

Stage of Property Cycle Bottom of market Bottom of market Bottom of market Bottom of market Rising market Bottom of market Approaching bottom of market

Declining market Start of recovery


Occasionally Occasionally Occasionally Occasionally Occasionally Almost never Frequently Occasionally Almost never



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Northern Territory, South Australia & Western Australia Property Market Indicators - Retail


SA, NT and WA Property Market Indicators – Retail Factor Adelaide Adelaide Hills Barossa Valley Iron Triangle Alice Springs Darwin Perth South West WA





Large over-supply of available property relative to demand




Rental Vacancy Trend Steady Steady Steady Steady Steady Steady Increasing Increasing

Rental Rate Trend Declining Declining Declining Declining Declining Stable Declining Declining

Volume of Property Sales Steady Steady Steady Steady Steady Declining Steady Declining

Stage of Property Cycle Start of recovery Start of recovery Start of recovery Start of recovery Declining market Bottom of market Bottom of market Approaching bottom of market

Local Economic Situation Contraction Contraction Contraction Contraction Flat Contraction Contraction Contraction


Large Large Large Large Small Significant Significant Small


Telephone 1300 880 [email protected]

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september 2017 · property market. should the residential market be adversely affected by a decline...

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