25th May 2016

Vow Academy

Property Panel Discussion

Welcome

• Upcoming Vow Financial PD days

– Melbourne: 21st June

– Brisbane: 23rd June

– Sydney: 20th July

– Perth: 26th July

• Next Vow Academy Webinar: Veda will be

presenting - 8th June 2016

Agenda

• Australian Property Partners: Brisbane: New

World City, Greater Springfield: Australia’s

fastest growing area – Les Walden

• Nyko Property: Selecting High Performing

Property for Investment - Bill Nikolouzakis

• Blue Wealth Property: Keeping perspective in

the current climate - Daniel Joseph

Brisbane: New World City

Greater Springfield: Australia’s fastest growing community

Vow Financial Webinar, 25th May 2016

© Copyright 2016 Australasian Property Partners

2

AustralasianPropertyPartners(APP)

q APPislicensedasaCorpora+onundertheProperty,Stock&BusinessAgentsAct2002.

q APPiden+fiesandrecommendsdirectpropertyopportuni+esthroughoutAustralia,withafocusonthe

majorci+esofSydney,Melbourne,andBrisbane.

q APPoffersournetworkpartnersandtheirclientsexclusiveaccesstodirectpropertyinvestment

opportuni+esbeforetheybecomepubliclyavailable.

q APPspecialisesinoffering“offtheplan”propertyforinvestmentpurposes,throughitsstrongconnec+ons

withAustralia’sforemostbou+quebuilders&developers.

q APPalsoworkscloselywithHCAPDevelopments&HCAPAssetManagement,anexperiencedProperty

DevelopmentandAssetManagementGroup,&canofferaccesstoHCAP’sSingleAssetPropertyTrusts.

SEQ Land Supply

Important Information

6

The information contained in this document is for informational and illustrative purposes only. Whilst all reasonable care has been taken in the preparation of this document, the information contained herein is not guaranteed to be correct. It is relevant as of the date of issue of this document and is subject to change without notice. Information provided herein is not intended to be a complete historical, current or future guidance of the risk, return, investment guidelines and considerations. This document and data must not be relied on as a recommendation or forecast of any kind. Under no circumstances will any entity or person be liable for any loss including but not limited to direct, indirect, incidental, special or consequential damages caused by using the information contained herein. Investors and/or advisers must seek their own independent advice and counsel before investing in any product or service that is offered by Australasian Property Partners, its directors, officers, agents, contractors or employees. Agents interests declared.

SEQ Land Supply 7 Source: Urbis, APM PriceFinder

SEQ Land Supply 8 Source: Urbis, APM PriceFinder

SEQ Land Supply

Our major capital cities have no choice but to grow in

density.

House prices, constrained land supply, demographic

shifts, infrastructure investment (location) and

employment growth will drive this.

Sustainable investments will be made in nodes that

show key economic fundamentals (P.I.E), lifestyle

amenity, and in developments that provide high levels

of amenity (internal and communal), from reputable

developers and high quality builders.

9

Fundamental Growth - Urbanisation

Source: Urbis

SEQ Land Supply

Infrastructure

Brisbane Airport Corporation

By 2029, employment at the Brisbane Airport and projected to increase to more than 50,000 jobs and $3.2 billion in output to

the SEQ economy. The Airport is underway. One of Queensland’s most existing infrastructure projects, the $1.3 billion New

Parallel Runway is expected to become operational in 2020. Annual visitor numbers to Brisbane Airport are projected to

reach more than 50 million by 2034.

Queens Wharf

The iconic $3 billion Queen’s Wharf is set be a world-class integrated casino and resort development, including: Iconic tourist attraction called the Sky Deck; the conversion of the heritage treasury building into a boutique shopping centre; 12 football fields of brand new public space; 5 new hotel brands 50 new bars and restaurants; a new pedestrian bridge to South Bank; a new 1,500-1,600 seat theatre complex in South Bank 3 new residential towers varying in heights.

TransApex Masterplan

TransApex is a $10 Billion road transport plan and a multi-billion dollar tunnel project which enables reduced travel times to

the CBD, the Airport and south of the Brisbane River. TransApex is the biggest urban road network proposal in Australia and

intertwines to create a highly sophisticated road system.

10

SEQ Land Supply

Brisbane Apartments versus Houses

Short term oversupply?

Long term undersupply?

Too many investors in a development?

Credit tightening

Settlement risk new apartments?

Population Growth in the South East Queensland Urban Growth Corridor

Price points versus other major capital cities

Shortage of land supply in some key growth areas

11

SEQ Land Supply 12

SEQ Land Supply 13

Greater Springfield Greater Springfield is a master-planned community

The development is currently home to 28,000 residents and more than 14,000 students

Established in 1991, the development is only 13% complete

Upon estimated completion in 2030, the forecast is 105,000 residents & significant local employment

opportunities

To stimulate economic activity:

A purpose built new CBD

University campus

Health precinct

Large-scale shopping centre

$500m Brookwater golf & spa resort

Estimated 141,000 new jobs created in Greater Springfield area to 2031

Extensive research available

SEQ Land Supply

Population Growth

14

Source: QLD Government Statistician's Office

• By 2030, the greater Brisbane area is forecast to have a population of 3.3 million – a 47% increase over

the period, which equates to approximately 70,000 new residents per annum.

• Ipswich LGA population is forecast to grow from 172,000 residents to 532,656 by 2036. This represents an

average annual growth rate of 4.6%.

• Logan LGA is projected to grow from 287,474 residents to 521,749 by 2036. This represents an average

annual growth rate of 2.4%.

4.6%

2.4%

1.1%

2.1%

1.8%

1.5%

1.4%

1.1%

1.8%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

Ipswich

Logan

Brisbane

Queensland

Victoria

ACT

New South Wales

South Australia

Australia

Population Growth

SEQ Land Supply

Ipswich - Lot Approvals

15 Source: QGSO, Residential Land Activity Profile Brisbane City & Ipswich City

• Of the 2,430 lots approved in 2015 in Ipswich 1,874 are within 11 estates.

• This reduces the potential supply per annum as it is unlikely for projects to deliver more than 150 to

200 lots per annum each.

• Ecco Ripley – 4,000* homes planned, Providence Ripley – 7,000* homes planned

• Very limited supply close to Ipswich CBD

• Springfield & Redbank supply limited

Year Brisbane Ipswich Logan

2007 2448 1650 1306

2008 2475 2924 2532

2009 1425 2652 860

2010 1588 2660 1813

2011 1711 1543 2384

2012 1637 1983 2160

2013 1737 2398 1678

2014 1898 5911 1986

2015 2265 2430 3232

Standard Urban Lots

* Approx.

Ipswich

Springfield

Redbank

SEQ Land Supply

Logan - Lot Approvals

16 Source: QGSO, Residential Land Activity Profile Brisbane City & Ipswich City

• Of the 3,232 lots approved in 2015 in

Logan 2,732 are within 8 estates.

• The majority are positioned in Southern

Logan in estates such as Yarrabilba –

20,000* homes planned and Flagstone

Rise – 12,000* homes planned.

• SIGNIFICANT UNDERSUPPLY OF LOTS

IN NORTHERN LOGAN

Year Brisbane Ipswich Logan

2007 2448 1650 1306

2008 2475 2924 2532

2009 1425 2652 860

2010 1588 2660 1813

2011 1711 1543 2384

2012 1637 1983 2160

2013 1737 2398 1678

2014 1898 5911 1986

2015 2265 2430 3232

Standard Urban Lots

* Approx.

Logan

Sunnybank

Hills

Hillcrest

Park Ridge

SEQ Land Supply

Sales of New Lots

Vacant Land

Source: QGSO, Residential Land Activity Profile Brisbane City & Ipswich City

• The Ipswich and Logan markets have

traditionally increased after the Brisbane

market – ‘the ripple effect’

• Ipswich house and land prices have

increased from $350,000 to $409,500

from 2014 to 2015, reflecting a 17%

increase.

• Brisbane median house package prices

have increased to $590,000 in 2015, with

Logan increasing to $389,000 – Northern

Logan would be between the Brisbane

and Logan medians

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Median Sale Price of New Lots of Vacant Land

Brisbane Ipswich Logan

SEQ Land Supply

Does supply match demand?

18

Population is forecast to increase

by (Avg. based on forecast

population at 2036);

• Ipswich – 18,032 people p.a.

• Logan - 11,700 people p.a.

• Brisbane – 70,000 people p.a.

Population forecasts reflect need for

the following new residences (based

on Avg household size of 2.3 ppl);

• Ipswich – 7,840 p.a.

• Logan - 5,100 p.a.

• Brisbane – 30,400 p.a.

Of these new residences, the

following will be separate house

dwellings (Based on current

dwelling type mix);

• Ipswich – 7,119 p.a.

• Logan - 4,480 p.a.

• Brisbane – 21,600 p.a.

SEQ Land Supply

Does supply match demand?

19

Land supply is

severely

undersupplied for

the forecasted

population growth.

City Supply (avg lot

registration last 5 yrs) Demand Undersupply

Supply based on

increase of 100%

Undersupply if supply increases

100%

Ipswich 1,154 7,119 5,965 84% 2,308 3,657 51%

Logan 718 4,480 3,762 84% 1,436 2,326 52%

Brisbane 1,894 21,600 19,706 91% 3,788 15,918 74%

16% 16% 9%

84% 84% 91%

0%

20%

40%

60%

80%

100%

Ipswich Logan Brisbane

Undersupply of New Housing

Undersupply Supply

SEQ Land Supply 20

House & Land Package Price:

From $392,298

Fixed price

Fixed build time

Split contracts

Investment summary

Estate brochure

Rental appraisal

Depreciation schedule

Working drawings

Supporting valuations

THE ‘PARRAMATTA’ OF BRISBANE Stage 2B pre-launch 11th June

SEQ Land Supply

HCAP Single Asset Trusts

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Trust Name Development Location Target Return Return Distributed

1 Kangaroo Point Unit Trust 1 km from Brisbane CBD 20% 25%

2 Kelvin Grove Property Unit Trust 2 km from Brisbane CBD 20% 25%

3 New Farm Trust 1 km from Brisbane CBD 20% 28%

4 Lane Cove Single Asset Trust 9 km from Sydney CBD 25% 31%

5 South Brisbane Single Asset Trust 0.6 km from Brisbane CBD 25% 29%

6 Pymble Single Asset Trust 16 km from Sydney CBD 25% Launched in January 2015

7 Newstead Single Asset Trust 3 km from Brisbane CBD 32% ORD Class launched in May 2015;

Class A Pref launched in September 2015

SEQ Land Supply

Mike Healey

mike.healey@auspp.com

+61 2 8274 4352

Steve Howell

steve.howell@auspp.com

+61 2 8274 4304

Contact

22

Les Walden

les.walden@auspp.com

+61 2 8274 4353

Pierce Howell

pierce.howell@auspp.com

+61 2 8274 4306

Level 10, 234 George Street

Sydney NSW 2000

+61 2 8274 4350

www.auspp.com

A B u s i n e ss P o we r p o i n t T e m p l a t e

Business Development

Selecting high performing property for investment

24

Who is Nyko Property?

Property Research Advisory

Qualify property for investment

Exclusive and off market property

Only available through selected

professional partners

Nyko Property

Professional Partner

Property Investor

We believe that if you focus on the

research all else will follow

27

Results

Nyko Property has outperformed the Australian marketplace by 28% since 2008

Boutique Apartments Town Houses

29

Are you an investor or speculator?

“An investor is any person who commits capital with the expectation

of financial returns.

Investors typically perform technical and/or fundamental analysis to

determine favourable investment opportunities, and generally prefer

to minimize risk while maximizing returns.”

Source: Investorpedia.com

The Australian property market

31

Australia’s key markets

Brisbane

Sydney

Melbourne

• Minimum 2 million inhabitants

• Not reliant on one sector or industry

• Safer in numbers

• Continuing strong demand for growth

and rental

• No ‘hot spots’

32

Macro factors affecting the market

Population Demographics Government

Infrastructure

1 2 3

33

Population Growth

Australia’s population is currently 23.13 million and set to increase to 46.9

million residents by 2055 (AFR Figures)

1954

1 Sydney 1,863

2 Melbourne 1,524

3 Brisbane 502

4 Adelaide 484

5 Perth 349

2014

1 Sydney 4,841

2 Melbourne 4,440

3 Brisbane 2,275

4 Adelaide 2,021

5 Perth 1,305

2050

1 Sydney 7,688

2 Melbourne 7,670

3 Brisbane 4,633

4 Adelaide 4,188

5 Perth 1,797 Source: KPMG Demographics

34

Growth in middle Australia

Hipster Middle Australia McMansion

<5km 5-15km 15-25km >25km Total Growth

Sydney 10,400 22,200 21,000 30,600 84,200

Melbourne

12,700 23,400 29,600 30,000 95,700

Brisbane 4,900 8,900 10,300 14,500 38,500

Perth 2,300 14,100 14,400 17,600 48,400

Adelaide 1,400 6,300 1,000 4,500 13,300 Source: KPMG Demographics

43,200 19,200 53,000

35

Demographic change

• Fastest growing group in Australia: Singles & couples (no kids)

• 37% of houses in 2006 Sensis had 2+ spare bedrooms

• 2.6 people per household

Household Types

Family

Group

Without Children

“Not ready yet"

By Choice

Empty Nesters

Single Parent Lone Person / Single

36

Land Size vs Land Value

What is more important, the size of the land or the value of the land?

Are you a speculator or an investor?

37

Government Infrastructure

• PLAN Melbourne • A Plan for Growing Sydney • Brisbane Suburban Centre Improvement Projects

Preston

Bentleigh

Oakleigh

WEST END NEWSTEAD

12,000 APARTMENTS IN

CONSTRUCTION ON TOP OF

A 20,000 APARTMENT BASE

8,000 APARTMENTS IN

CONSTRUCTION ON TOP OF

A 20,000 APARTMENT BASE

6km North of

CBD

Locale – Alderley QLD

Cash Flow

Cash Flow Scenario

Year 1

Tax deductions: $37,308

Tax credit: $6,064

Cash flow: +$9 per week

Assumptions

Income: $80,000

Interest Rate: 4.75%

Capital Growth: 6%

Cash Flow Scenario Year

10 (weekly)

Cash flow: +$42

Capital growth: $570

Total: $612

Limited Offer from the Developer

For the next 4 investors in this great project, pay just 5% deposit and the developer will match

your contribution!

That is up to $23,500 in value!!

Questions?

PERSPECTIVE, PLEASE

AGENDA

The Media

Long Term Investing

Holding Costs

Interest Rates

Where Are The Markets?

THE MEDIA

THE CRASH THAT NEVER WAS

RULE 1: INVEST LONG TERM

For investors as a whole, returns

decrease as motion increases

RULE 1: INVEST LONG TERM

Here’s an example: Sydney Price Growth Dec 2004 - Dec 2008 = - 4.36% Dec 2008 - Sept 2015 = 82.7% or 9 per cent per annum Dec 2004 - Sept 2015 = 5.6% per annum, a gain of $413k dollars on a $500k property in 11 years! Consider the leverage here too! December 2015 quarter sales:

Sales that made a loss: Held for 5.9 years Sales that made a profit: Held for 10.2 years Sales that doubled: Held for 16.8 years

WEEKLY HOLDING COSTS

-$100.00

$0.00

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

Apr-97

Jan-98

Oct-98

Jul-99

Apr-00

Jan-01

Oct-01

Jul-02

Apr-03

Jan-04

Oct-04

Jul-05

Apr-06

Jan-07

Oct-07

Jul-08

Apr-09

Jan-10

Oct-10

Jul-11

Apr-12

Jan-13

Oct-13

Jul-14

Apr-15

Weekly Cost

ASSUMPTIONS

Weekly cost calculated as:

Income – costs

52

Income = rent per year

Cost = interest on loan per

year

The Press

Interest rate (%)

$55,000

7.8

7.0

6.2

$171

$117

$69

$95,000

$128

$84

$40

5.7 5.2

$41

$12

$12

$15+

$172 8.6 $225

$216 9.4 $280

4.7 $14+ $49+

INTEREST RATES

It's cheaper to own property now than it was at almost any point in the past decade Before the GFC, interest rates exceeded 9 per cent The interbank cash rate futures contract curve indicates that rates are likely to remain at historical lows for the foreseeable future

WHERE TO FROM HERE?

BRISBANE

Here’s what you need to know

Sizes square metre rates

Rental yield’s remain well above those of Sydney and Melbourne

Affordability! Mortgage payments on a median priced home as a proportion of

monthly income:

Brisbane= 21.8% Sydney = 40.6%

Melbourne = 34.9%

Opportunities for house and land now viable – 50% of a Sydney comparable

GOLD COAST

Demand recovering strongly

Vacancy rates declined from 5% in July 2011 to 1.1% in December 2015

Yields increase from 4.4% to 5.2% between 2009 and 2015

14,100 jobs added: July 2014 – 2015, largest annual

growth in employment in Queensland

Commonwealth Games associated infrastructure – three new competition venues and accommodation for 6,500 athletes

SUNSHINE COAST

Health care has grown 47% over 5 years and expected to further increase: Sunshine Coast University Hospital,

completing this year

Progressive rental demand increase since mid-2011

Vacancy rate currently at 1%: significant undersupply

Long term infrastructure projects to buoy property market

MELBOURNE

Here’s what you need to know: 1. Victoria has the fastest annual

economic growth rate in the country, up 3.4% on a year ago (Sept Qtr 2015)

2. Population growth: 95,000 new residents and the highest population growth rate of any capital city

3. Affordability: In many cases, property is half the price of a Sydney comparable

4. Livability – consistently ranked the most livable city in the world

Focus for 2016: house and land in outer growth suburbs and amenity rich apartments in the middle ring

SYDNEY

Here’s what you need to know

Affordability approaching historically

low levels

Real wage growth lower in New South Wales than any other Australian state

Sydney’s median house price dropped

3.1% over the December quarter 2015, the first drop since June 2012

Opportunity for 2016: Central Coast,

Newcastle, Wollongong

46% OF CENTRAL COAST PROPERTY SALES ARE TO SYDNEYSIDERS

PERTH AND DARWIN • Growth in Sales volumes

declining for 24 – 36 months

• Rents in Perth and Darwin fell 2.22% and 2.43% respectively in 2015

• Perth vacancy rates at 4.1%, four times what they were three year ago. Yields decline from 6% to 4.2%

• China’s iron ore consumption declined almost 10% in the last two years – property boom ends leaving 11 million homes unsold

• NT and WA economies retract 13.9 and 1.6% respectively on a year a go

-60%

-40%

-20%

0%

20%

40%

60%

80%

Mar-2004

Sep-2004

Mar-2005

Sep-2005

Mar-2006

Sep-2006

Mar-2007

Sep-2007

Mar-2008

Sep-2008

Mar-2009

Sep-2009

Mar-2010

Sep-2010

Mar-2011

Sep-2011

Mar-2012

Sep-2012

Mar-2013

Sep-2013

Mar-2014

Sep-2014

Mar-2015

PerthSales Volume Growth

Darwin Sales Volume Growth

ADELAIDE AND HOBART

Increasing demand - upward trending sales growth rates

Low supply levels contribute to tight vacancy rates and high yields, particularly in Hobart

Hobart vacancy rate: 1.1 per cent, yield 5.5%

Adelaide vacancy rate: 2.1 per cent, yield 5.1%

South Australia and Tasmania lack the strong industry drivers to generate employment growth, population growth and property growth

Unemployment rates well above national figure: Tasmania +14% Adelaide + 30%

Affordable? Yes … Opportunity? Not yet

CANBERRA

Demand is diminishing before taking advantage of low rates, 18% reduction in listings

The average apartment price declined 0.8% in 2015

$1.2 billion worth of public service job cuts over the

next three years

Rental growth higher than any other capital city due to high overseas migration

Uncertainty around the federal budget likely to constrain

demand in the short term