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MELBOURNE COMMUNITIESRESEARCH & FORECAST REPORT
www.colliers.com.au/research
Consumer Sentiment Defines MarketThe decline in the Melbourne residential land market has continued during the past 12 months due to low consumer sentiment as well as a drop in population growth. Positive consumer sentiment is vital to maintaining growth in residential land sales and is driven by factors including job security and lot values. Moreover, consumer sentiment generally reflects economic stability.
With the recent economic uncertainty within the state over the last 12 months, as well as continued instability globally, consumer sentiment within Victoria has remained below the 100 point index, whereby the market is deemed to be in equilibrium, since February. Global capital markets remain volatile and job security tentative which is causing consumers to be cautious in regards to spending.
Deloitte Access Economics notes, employment growth across the Melbourne Statistical Division has weakened from 1.1% since March 2010 to 0.2% at June 2012. This is forecast to remain stagnant between 0.2% and 0.3% until the end of 2013. Coupled with an increase in the unemployment rate from 5.1% to 5.3% over the year to June 2012 these factors have led to a further decline in sentiment.
The inability of both developers and purchasers to obtain finance for new developments have also hurt the residential property market in Victoria. Banks are wary of providing finance, preferring to deal with those developers who have existing relationships. While on the retail side purchasers are expected to have larger deposits due to the removal of the First Home Owners Bonus from the State government in June 2012 which should see a reduction in first home buyers’ real purchasing power. With prevailing consumer sentiment not expected to change in the short to medium term, developers have continued to adjust prices to draw buyers back to the market albeit with limited success.
Population growth has historically driven demand in the residential market as new residents entering the state have required housing according to the ABS. Overseas migration has been the largest component of overall population growth in Victoria according to the Australian Bureau of Statistics (ABS), comprising an average of 62% of total population growth since 2004.
The Victorian population increased by 447,634 persons from the 2005 to 2009 financial years of which 65% consisted of overseas migration. However, since 2009 overseas migration has steadily declined, dropping by nearly 30,000 persons over the 2009 to 2010 financial year and a further 7,889 persons from 2010 to 2011. Over this same period the population growth level has decreased by a similar amount of persons which has led to decreased demand for residential property.
RESIDENTIAL LAND MARKET INDICATORS - SECOND HALF 2012
Region Median Price Sold to Date Remaining Yield* Number of Projects
West $205,000 10,715 26,344 32
North $210,000 5,116 5,599 20
South East $198,750 6,151 10,715 24
Total $205,000 21,982 42,658 76
*Includes lots that have yet to sell and that have not been released to market.** Median prices exclude rebates Source: Colliers International Research
SECOND HALF 2012 | RESIDENTIAL
RECENT PERFORMANCE OF THE RESIDENTIAL COMMUNITIES MARKET:
WEST
NORTH
SOUTH EAST
KEY HIGHLIGHTS
• 15 estates have sold out since the last reporting period.
• Of the current land estates operating in Melbourne’s growth corridors, an estimated 21,970 lots have sold.
•Median land prices have decreased by $10,000 from $215,000 to $205,000 over the six months to December 2011 but increased 7% over the year.
Evergreen, TruganinaOne of only six new estates released in 2012, Evergreen is being marketed by Colliers International.
Reduced demand is also reflected in the housing approval levels recorded by the ABS. In Melbourne’s growth corridor building approval levels between January and July 2012 are tracking below 2011 levels equivalent to 2,089 fewer approvals to date. The largest change has been recorded in the LGA of Wyndham where there has been an 80% reduction in approvals during 2012 from the same time last year. The smallest change in building approvals was recorded in the LGAs of Hume and Casey where there has only been a decline of 2% and 4% respectively. Colliers International anticipates building approval figures in 2012 will not reach the same levels as 2011 due to lower consumer sentiment as well as the removal of the First Home Owners Boost.
Government policy on development is also changing and will affect the development of residential property throughout Victoria. On June 11 2012 Minister for Planning Matthew Guy proposed changes to the zoning of commercial, industrial, and residential land uses. Within the new covenants residential land would be placed into one of three categories; the Residential Growth Zone, General Residential Zone and Neighbourhood Residential Zone.
The Neighbourhood Residential Zone will have the most stringent regulations including height controls, consideration of minimum lot sizes and regulations on subdivision. The Residential Growth Zone will be introduced to make clear what areas in Victoria are being targeted for densification. The biggest change with this system is the local councils’ ability to decide which areas will be categorised. With many councils opposed to densification it is anticipated that councils in the outer suburbs will zone themselves in the Neighbourhood Residential Zone, retarding growth. Currently these reforms are open to feedback, but it is assumed that after the consultation period ends in September 2012 implementation will be enforced.
Source: Deloitte Access Economics
MELBOURNE STATISTICAL DIVISION EMPLOYMENT GROWTH
Jun-
06
Sep-
06
0.20%
0.00%
1.00%
1.20%
0.40%
0.60%
0.80%
Dec-
06
Mar
-07
Jun-
07
Sep-
07
Dec-
07
Mar
-08
Jun-
08
Sep-
08
Dec-
08
Mar
-09
Jun-
09
Sep-
09
Dec-
09
Mar
-10
Jun-
10
Sep-
10
Dec-
10
Mar
-11
Jun-
11
Sep-
11
Dec-
11
Mar
-12
Jun-
12
Sep-
12
Dec-
12
Mar
-13
Jun-
13
Sep-
13
Dec-
13
0.21%
1.10%
0.04%
Forecast
“On June 11 2012 Minister for Planning Matthew Guy proposed changes to the zoning of commercial, industrial, and residential land uses”
Source: Australian Bereau of Statistics
HOUSE APPROVALS IN THE MELBOURNE GROWTH CORRIDORS
City of Wyndham City of Hume City of CaseyShire of Melton Shire of CardiniaCity of Whittlesea
2005
4,000
2,000
0
6,000
8,000
16,000
18,000
10,000
12,000
14,000
2006 2007 2009 2011 Jan - July 2012
Num
ber o
f app
rova
ls
2008 2010
COLLIERS INTERNATIONAL | P. 2
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
TRANSPORT AND INFRASTRUCTUREThe most important infrastructure development in the Victorian pipeline is the $10 billion East West Link. The proposed 18 kilometre tunnel would connect the Eastern Freeway to the Western Ring Road and help alleviate traffic congestion across the Westgate Bridge. This would increase accessibility and reduce travel time to the Western suburbs, a key concern for potential buyers in this corridor. Currently, the Victorian Government is compiling a business case for the project in order to obtain funding from the Federal Government. The business case is expected to be completed early next year.
Over the first half of 2012 several minor rail infrastructure projects were completed, including four new railway stations and the South Morang Rail Extension. The State Government has placed a focus on upgrading the rail system to help ease traffic congestion and encourage commuting from the outer suburbs of Melbourne.
Over the next two years further upgrades to railway lines and two road projects are expected to be completed. Rail projects include the Sunbury Electrification Project in the North, which will add a metro service to the Northern growth corridor, more than doubling its capacity to transport individuals into Melbourne’s CBD, while the road infrastructure upgrades at Clyde Road and Hallam Road in the South East are also due for completion by December of this year.
OUTER MELBOURNE INFRASTRUCTURE UPDATE
Infrastructure Project Location StatusEstimated Completion
DateCurrent Description
RAIL
Sunbury Rail Electrification Northern Region Under Construction 2012 Electrification of the Sunbury line from Watergardens to Sunbury, enabling metro access from the Sunbury and Diggers Rest stations. The train stations will also be refurbished allowing for an extra 500 car parks at the Diggers Rest Station and a further 100 car parks at the Sunbury Station.
Cranbourne East Rail Extension
South Eastern Region Planning N/A The project will extend the Cranbourne rail line to Cranbourne East and includes a new station at Cranbourne East.
Regional Rail Link Western Region Under Construction 2016 The Regional Rail Link project aims to give Geelong, Bendigo and Ballarat trains their own dedicated tracks through the metropolitan system from Sunshine to Southern Cross Station. The line will also incorporate the construction of two stations at Tarneit and Wyndham Vale. Once complete the Regional Rail Link will provide services for up to an extra 9000 passengers during peak times.
Williams Landing Project Western Region Under Construction 2012 Creation of a new premium train station at the Williams Landing Town Centre. The project includes plans for 500 car spaces as well as a designated bus terminal and taxi ranks. The station will be located on the Werribee line.
ROAD
North-East Link Northern Region Planning N/A Planning has commenced for a road connection between the Metropolitan Ring Road in Greensborough and the Eastern Freeway in Bulleen. The road will provide a section of the major orbital road surrounding Melbourne connecting new employment hubs providing easier access for residents of the Northern suburbs to the Melbourne Airport.
Aitken Boulevard Northern Region Under Construction 2013 A Private Public Partnership between the Federal Government and Peet Ltd., Stockland and Lend Lease has been put in place to build a new street between Mickleham and Sydney Roads. The new street will improve traffic flow and connectivity in the area while significantly reducing congestion for local residents. It will also act as a vital link between new communities in Craigieburn, providing easy access to amenities within new Northern communities.
East West Link Western Region Planning N/A Planning has begun for a tunnel to connect the Western Ring Road to the City Link Freeway. The tunnel would alleviate major traffic from Westgate bridge improving access to the Outer Western suburbs.
M80 Upgrade Northern and Western Region Under Construction 2015 The creation of new lanes to ensure three to six lanes in each direction as well as new dedicated merging lanes to increase safety.
Hallam Road Upgrade South Eastern Region Under Construction 2013 The number of lanes will be increased to three between Pound and Ormond Roads. A shared bus lane/left turn lane will be constructed.
Cooper Street - Epping Northern Region Planning 2013 An additional lane will be added to Cooper Street between the Hume Freeway and Edgars Road. Dedicated bus lanes for on and off ramps to Hume Freeway will be added to provide less congested roadways for the Northern Region's residents.
Source: Department of Transport/ Melbourne Water/ South East Water/ City West Water/ Colliers International Research
COLLIERS INTERNATIONAL | P. 3
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
OUTER MELBOURNE INFRASTRUCTURE UPDATE
Infrastructure Project Location StatusEstimated Completion
DateCurrent Description
ROAD (CONTINUED)
Outer Melbourne Ring Road/ E6 Transport Corridor
Northern and Western Region Planning N/A A proposal has been made to accommodate a 100 kilometre long high-speed transport link for pedestrians and freight in Melbourne's North and West, creating an opportunity for new road and rail transport links through the Werribee, Melton, Tullamarine, Craigieburn/Mickleham and Epping/Thomastown areas. Construction is not likely to commence until 2020.
Narre Warren - Cranbourne Road
South Eastern Region Committed 2015 Currently in pre-construction phase the project will encompass the creation of three lanes each way between Ormond and Glasscocks Roads, with two lanes each way for other sections, intersection improvements at Ormond and Glasscocks Roads and a shared path for cyclists and pedestrians along the east side of Narre Warren-Cranbourne Road. Project funding has been confirmed, pre-construction planning will continue during 2012 and major works are likely to start by late 2013.
Yan Yean Road Northern Region Planning N/A A planning study is currently underway to identify and determine the road reservation requirements for the future duplication of Yan Yean Road between Diamond Creek Road and north of Kurrak Road. The study will be used to create a proposal to construct a four lane divided roadway.
Plenty Road Upgrade Northern Region Under Construction 2012 Widen Plenty Road into a four lane divided roadway from Gordons Road to Riverdale Boulevard. Due for completion in Spring 2012.
Palmers Road Rail Overpass Western Region Under Construction 2012 Part of the Williams Landing Project. The project involves the extension of Palmers Road beyond the Princes Freeway and across the Werribee rail line as well as the widening of the overpass from three lanes to five lanes.
Clyde Road Upgrade South Eastern Region Under Construction 2013 Two additional lanes will be created each way between High Street and Kangan Drive. The High Street and Enterprise Avenue intersections will be upgraded.
WATER
West Werribee Dual Water Supply Project
Western Region Under Construction 2014 The project will provide recycled water to Melbourne's Western suburbs and includes several major initiatives including: the creation of a salt reduction plant and pump station at the Western Treatment Plant; laying approximately 34 kilometres of transfer mains for both the recycled and drinking water; and building storage tanks for recycled and drinking water storage.
Cardinia South Sewerage Project
South Eastern Region Planning N/A Capacity constraints in the Lang Lang and Koo Wee Rup treatment plants are currently being investigated.
Troups Creek Stormwater Recycling Project
Western Region Under Construction 2012 An on-site treatment facility is being built as a joint partnership between Melbourne Water and Places Victoria to produce recycled stormwater for use in the brown water system.
Source: Department of Transport/ Melbourne Water/ South East Water/ City West Water/ Colliers International Research
Metropolitan
Cardinia
Knox
Yarra RangesMetropolitan
Inner City
Nillumbik
Casey
Wyndham
Melton
Hume Whittlesea
MELBOURNE COMMUNITIES
Prepared by Colliers International Research
COLLIERS INTERNATIONAL | P. 4
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
Western Region Colliers International has identified 32 operating estates in the Western Region of Melbourne that are currently under construction. Upon completion these estates will comprise approximately 46,008 lots. This is a decrease in total lots from Colliers International’s last report whereby a total of 47,991 lots were identified. Of these estates approximately 23% of the stock available has already sold.
During the past six months seven estates (Alamanda, Arndell at Trugnanina, Tarneit Gardens, The Reserve, The Rise, Wyndella, and Riverina) have practically completed and have hence been removed from analysis in this report. The Point Cook Thirty30 estate has ceased construction since the last reporting period and has also been removed from this analysis. Of the current estates available one is nearing completion; Featherbrook. This estate has approximately 25 lots left remaining for sale.
Two new estates have been released to the market over the past six months. Gateway, developed by Central Equity, and Evergreen Estate are located in the suburb of Truganina and will comprise only 338 lots upon completion. Released in February this year, Gateway has already sold 52 lots (24%) in the first two stages.
Over 100 sales have occurred at both Allura and Atherstone since the last reporting period, having sold 120 and 105 each respectively. Featherbrook, Forsyth Park, Eynesbury Estate, and Aspire have all sold over 40 lots since the last report.
The Western Region of Melbourne continues to maintain its competitiveness in the market offering the lowest weighted average asking price of the three corridors. From a sample of 160 lots currently available for sale in the region the weighted average asking price was $205,344, excluding incentives, and the weighted average lot size was 438m2.
Maplewood, Melton107 lots have already transacted since Maplewood launched in 2011.
WESTERN REGION MARKET ACTIVITY - RESIDENTIAL ESTATES
Estate Name Suburb LGA Year Estate Commenced Total Number Number Sold Remaining
Yield*
Alamanda Point Cook Wyndham 2007 1,500 N/A N/A
Bellevue Truganina Wyndham 2011 325 59 266
Bluestone Wyndham Vale Wyndham 2008 1,200 N/A N/A
Featherbrook Point Cook Wyndham 2007 1,100 1,075 25
Heartlands Tarneit Wyndham 2010 1,100 N/A N/A
Kingsford Point Cook Wyndham 2009 567 N/A N/A
Manhattan Place Tarneit Wyndham 2009 187 N/A N/A
Manor Lakes Wyndham Vale Wyndham 2002 9,000 3,000 6,000
Meadow Springs Truganina Wyndham N/A 162 54 108
Paragon Point Cook Wyndham N/A 350 46 304
Parkbrook Point Cook Wyndham 2011 325 100 225
Saltwater Coast Point Cook Wyndham N/A 2,500 625 1,875
Saratoga Point Cook Wyndham N/A 700 N/A N/A
Waterhaven Point Cook Wyndham 2009 600 300 300
Williams Landing Williams Landing Wyndham 2008 2,500 850 1,650
Evergreen Truganina Wyndham 2012 132 15 117
Forsyth Park Truganina Wyndham 2012 473 59 414
Gateway Truganina Wyndham 2012 214 52 162
Allura Truganina Wyndham 2011 1,300 250 1,050
Arnolds Creek Melton West Melton 2008 1,700 1,105 595
Botanica Springs Brookfield Melton N/A 2,000 N/A N/A
*Includes lots that have yet to sell and that have not been released to marketSource: Colliers International Research
COLLIERS INTERNATIONAL | P. 5
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
Western Region WESTERN REGION MARKET ACTIVITY - RESIDENTIAL ESTATES
Estate Name Suburb LGA Year Estate Commenced Total Number Number Sold Remaining
Yield*
Eynesbury Estate Eynesbury Melton 2010 4,500 873 3,627
Maplewood Melton Melton 2011 626 107 519
Peppermint Grove Melton West Melton 2010 452 45 407
Silverdale Melton Melton N/A 267 N/A N/A
Waterford Melton Melton 2010 3,200 30 3,170
Aspire Plumpton Melton 2011 700 135 565
Atherstone South Melton Melton 2012 4,900 115 4,785
Encore Plumpton Melton 2011 158 N/A N/A
Toolern Waters Toolern Melton 2012 920 N/A N/A
Penny Royal Melton West Melton 2011 350 N/A N/A
Taylors Hill Caroline Springs Melton 2002 2,000 1,820 180
*Includes lots that have yet to sell and that have not been released to marketSource: Colliers International Research
COLLIERS INTERNATIONAL | P. 6
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
Northern RegionIn the Northern Region two new estates have been released while three previous estates have been completed. This takes the total number of lots available in the region to 21,250 of which 24% has already been sold (5,116 lots). Approximately 58% of the total number of lots in the Northern Region are within the LGA of Whittlesea, down from 66% six months earlier.
Over the last six months Carlingford estate sold the eight remaining lots available and was therefore removed from analysis in this report. Palisades and Vantage Point have also been removed due to their completion status.
Orchard Grove, a development by Metro Property, has sold approximately 100 lots since it began marketing in April 2011; this is equivalent to 57% of its total stock. Other notable sales results have occurred in the Everton Gardens estate which has sold an estimated 43 lots since the last reporting period. This estate is currently marketing its second of five stages with the third stage being released in the fourth quarter of this year.
NORTHERN REGION MARKET ACTIVITY - RESIDENTIAL ESTATES
Estate Name Suburb LGA Year Estate Commenced Total Number Number Sold Remaining
Yield*
Aurora Epping North Whittlesea N/A 2,213 N/A N/A
Bridge Inn Rise Doreen Whittlesea 2009 190 110 80
Eucalypt Wollert Whittlesea 2010 1,300 350 950
Everton Gardens Mernda Whittlesea 2010 250 93 157
Fairview Mernda Whittlesea 2010 481 190 291
Lyndarum Epping North Whittlesea 2010 600 201 399
Mernda Villages Mernda Whittlesea 2006 3,000 1,800 1,200
Mosaic Lalor Whittlesea 2010 850 326 524
Renaissance Rise Mernda Whittlesea 2008 719 139 580
Summerhill North Epping Whittlesea 2009 687 549 138
Eden Gardens Epping North Whittlesea N/A 450 300 150
Orchard Grove Doreen Whittlesea 2011 175 100 75
Riverstone at Plenty River
Doreen Whittlesea 2009 1,200 620 580
Berry Lane Mernda Whittlesea 2010 268 135 133
Panorama Doreen Doreen Whittlesea 2010 125 57 68
Brookhaven Sunbury Hume 2010 245 46 199
Canterbury Hills Sunbury Hume 1990 1,404 N/A N/A
Highlands Craigieburn Hume 2008 4,764 N/A N/A
Jackson's Hill The South Valley Hume 1997 2,572 N/A N/A
Providence at Greenvale
Greenvale Hume 2010 150 100 50
*Includes lots that have yet to sell and that have not been released to marketSource: Colliers International Research
Brookhaven, SunburySince marketing began in the second half of 2010 Brookhaven has sold 19% of its total stock.
COLLIERS INTERNATIONAL | P. 7
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
South Eastern RegionThe South Eastern Region is the least expensive of the growth corridors. Of the 24 estates idenitifed in the region, comprising an estimated 19,104 lots, 6,151 have already been sold. Heritage Springs, Lakeside Pakenham, Arena at Officer, The Grove, and Settlers Run are all nearing completion and have therefore been removed from analysis in this report.
Previously Colliers International reported over 50% of stock in the South Eastern Region had already been absorbed. This figure has now declined to 33% due to the removal of the five estates which have been completed, as well as the introduction of two new estates
Potters Grove and Timbertop estates began marketing in the first half of 2012 and will add approximately 821 lots to the LGA of Cardinia. Approximately 70 lots have already sold since marketing commenced. Other notable sales results for estates in the region include those in Selandra Rise, which has sold approximately 150 lots since the last reporting period.
The South East Region has historically recorded the highest median sale price of all the growth corridors, however new suburbs such as Officer have begun to develop more rapidly reducing median lot prices as well as increasing the average lot size.
Of a sample of 146 lots which are currently for sale in the South East corridor the weighted average lot size was approximately 451m2, the largest across all growth corridors, and an average sale price approximately $208,308, excluding rebates.
SOUTH EASTERN REGION MARKET ACTIVITY - RESIDENTIAL ESTATES
Estate Name Suburb LGA Year Estate Commenced Total Number Number Sold Remaining
Yield*
Arden Estate Pakenham Cardinia 2008 637 N/A N/A
Cardinia Lakes Pakenham Cardinia 2007 750 375 375
Eden Brook Pakenham Cardinia 2011 601 N/A N/A
Stockman Woods Estate Longwarry Cardinia 2010 150 100 50
Worthington Estate Pakenham Cardinia N/A 800 150 650
Timbertop Officer Cardinia 2012 600 50 550
Potters Grove Officer Cardinia 2012 221 20 201
Alarah Casey Casey 2009 250 193 57
Aspect Officer Casey 2010 2,500 250 2,250
Bernly Gardens Berwick Casey N/A N/A N/A N/A
Botanic Ridge Cranbourne Casey 2007 950 650 300
Berwick Waters Clyde North Casey 2011 2,750 150 2,600
Cascades on Clyde
Clyde Casey 2007 1,100 900 200
Casiana Grove Cranbourne West Casey 2010 670 270 400
Grandvue Officer Casey 2010 860 280 580
ArbourleaCranbourne
North Casey 2011 325 50 275
Parks Edge Cranbourne Casey 2011 520 20 500
*Includes lots that have yet to sell and that have not been released to marketSource: Colliers International Research
Bellevue, TruganinaThis 325 lot estate has already sold 18% of it’s stock since marketing commenced.
N
1
2
3
4
5
6
7
8
9
10
11 12 13 14 15 16 17 18 1920 21
31
32
3330 29 28 27 26 25 24 23 22
MO
RRIS
RO
AD
BELLEVUE DRIVE
MER
IVAL
E D
RIVE
217 216 215 214 213 212 211 210 209 208 207206
205
204
203
202
201
239 238
237
233
231
230
228226
225224
223222221
218
219220
227
229
232
234
235
236
VANTAGE PLACE
STONYBROOK WAY301
302
303
304
305
306
307
308
309
310
313314
315 316 317 318
312311
325 323 322 321 320 319
324
407 406 405 404 403 402 401
507414
413412
411410
409408
417
418
419
420
416415 423
424 425 426 427 530
529
528
527
526 525 524 523 522 521
422
421
PEN
LEA
COU
RT
WAI
ORA
CO
URT
BEAT
TY A
VEN
UE
ALLCREST COURT
520519518
517516
515
514
513
512511
510509
508
506 505 504 503 502 501
601
602
603
604 605606 607 608 609 610 611 612 613
614 615 616 617
618
619
629
628 627 626 625 624 623 622621
620
STONYBROOK WAY
SHALAMAR DRIVE
FULLERTON WAY
MAI
TLAN
D D
RIV
E
SAMSARA AVENUE
701702
703704
705706
707708
709
710711
712713
714
727
726
725
724723
722
721
720719
718
830829
828 827826 825 824 823
822 821 820 819 818 817 816 815
814813
812811
810809
808807
806805
804803
802801
927 926 925 924 923
901
902
903
904
905
906
907
922
921
920
919
918
917
916
915
914
10091010
10111012
10131014
1015
10171018
1019
1001 1002 10031004 1005 1006 1007 1008
908
909
910
110111021103
11041105
11061107
1108
1016913
912
911
1139
717
715 716 11091110 1111
1112
1113
1114
1115 1116
1117
1118
1119
1120
1121 1122 1123 1124 1125
1126
1127
1128
1129
1130
1131
1137
1138
1136
1135
1134
1133
1132
SAMSARA AVENUE
DISP
LAY
VILL
AGE
DISPLAY VILLAGE
SALE
SO
FFIC
E
11 Stages Featuring325 impressive allotments
6
4114110 5
09
1STAGE 11
STAGE 10
STAGE 7
STAGE 8
STAGE 9
STAGE 6
STAGE 3
STAGE 4
STAGE 5
STAGE 2STAGE 1
COLLIERS INTERNATIONAL | P. 8
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
South Eastern RegionSOUTH EASTERN REGION MARKET ACTIVITY - RESIDENTIAL ESTATES
Estate Name Suburb LGA Year Estate Commenced Total Number Number Sold Remaining
Yield*
Pasadena Clyde Casey 2010 420 160 260
Quarters Cranbourne West Casey 2011 800 93 707
Selandra Rise Clyde North Casey 2010 1,200 750 450
The Avenue Casey Casey N/A N/A N/A N/A
Livingston Cranbourne East Casey 2011 N/A N/A N/A
The Hunt Club Cranbourne Casey 2002 2,000 1,690 310
Marriott Waters Lyndhurst Casey N/A 1,000 N/A N/A
*Includes lots that have yet to sell and that have not been released to marketSource: Colliers International Research
COLLIERS INTERNATIONAL | P. 9
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
New Supply Pipeline
Source: Growth Area Authority compiled by Colliers International Research
•The supply of residential lots include lots yet to be sold/released in the communities contained in this report, plus land releases in various stages of planning. All have completed precinct structure plans (PSPs) with the Growth Area Authority.
•Future supply levels are constantly changing as lots are absorbed, development plans changed and new applications lodged. The figures below indicate a reflection of the current development pipeline as detailed within completed and draft PSP’s.
•Six new PSPs were completed in June 2012. These new development areas will add an estimated 37,782 lots to the growth corridors of Melbourne in the future. This brings the number of total proposed lots to 135,561.
•The recently completed Lockerbie PSP is the largest of the six new completed PSPs released by the Growth Area Authority. Comprising 1,121 hectares of land in the LGA of Hume, approximately 35 kilometres from the Melbourne CBD. The land is proposed to yield 10,221 lots with a development timeframe of 20 years.
•The Manor Lakes, Diggers Rest and Lockerbie North PSPs each have less than 5,000 proposed lots.
•The Merrifield PSP is a joint project between MAB Corporation and Gibsons Property Corporation. The new master planned community is set to house an estimated 6,877 households and will be delivered over the next 25 years.
•The Western corridor has the highest proportion of lots (36%) with completed PSPs in the supply pipeline, the majority of which are in the LGA of Melton (35,254 lots). This is followed by the South Eastern corridor with 33% and the Northern corridor with 31%.
ESTIMATED PROPORTION OF FUTURE SUPPLY BY REGION
West 36%
North 31%
South East 33%
COLLIERS INTERNATIONAL | P. 10
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
General Land Market•The following analysis includes sales
of vacant lots that have settled and been recorded on Pricefinder as at December 2011 in Melbourne’s Growth Areas. Previous figures have been revised due to time lags between exchange, settlement and data availability. Sales not at arm’s length or that were sold in one line are excluded.
•Between 2005 and 2011 approximately 82,265 vacant lots were sold and settled in the LGAs of Hume, Cardinia, Casey, Whittlesea, Wyndham, and Melton.
•The LGA of Wyndham has recorded the highest proportion of total vacant lot sales in the growth areas of Melbourne with 31% of total sales respectively, followed by Melton with 17%, Casey and Whittlesea with 16% each.
•The LGA of Wyndham recorded the highest median price for vacant lots (excluding rebates) in Melbourne’s growth areas over the second half of 2011 with $237,750, followed by Casey ($213,950), Whittlesea ($211,000), Hume ($195,000), Melton ($175,500), and Cardinia ($176,000).
•Only the LGA of Wyndham recorded an increase in the median price over the six months to December 2011, the LGA of Cardinia remained stable while the rest recorded decreases in median sales prices of vacant lots.
Source: Pricefinder
*Median prices exclude rebatesSource: Pricefinder General House Market
City of Hume City of WhittleseaCity of Casey City of WyndhamShire of Cardinia Shire of Melton
H12005
H22005
H12006
H22006
H12007
H22007
H12008
H22008
H12009
H22009
H12010
H22010
H12011
H22011
2,000
1,000
0
3,000
4,000
8,000
10,000
5,000
6,000
7,000
Media
n Sa
les P
rice
Num
ber o
f Sale
s
9,000
$225,000
$200,000
$175,000
$150,000
$125,000
$100,000
Median Sale Price
GENERAL MARKET INDICATORS – VACANT LAND
LGAMedian Sale Price Median Sale Price Half Yearly Annual
H1 11 H2 11 Change Change
Cardinia $175,750 $176,000 0% 3%
Casey $224,000 $213,950 -5% -3%
Hume $210,500 $195,000 -8% -4%
Melton $181,000 $178,500 -1% 16%
Whittlesea $220,000 $211,000 -4% 5%
Wyndham $230,000 $237,750 3% 16%
“The LGA of Wyndham recorded the highest median price for vacant lots (excluding rebates) in Melbourne’s growth areas over the second half of 2011” DEMAND AND MEDIAN SALE PRICES FOR VACANT LOTS IN MELBOURNE’S GROWTH AREAS
COLLIERS INTERNATIONAL | P. 11
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
COLLIERS INTERNATIONAL | P. 11
General Land Market•The median sale price in the growth areas
of Melbourne decreased by 9% over the six month period, from $215,000 to $205,000, but recorded an increase of 7% year on year.
•The total number of sales over the second half of 2011 decreased by approximately 21% over the six month period.
•Over the 2011 calendar year product between $200,000 and $300,000 was the most popular, constituting 50% of sales over the first half of 2011 and 49% of sales in the second half. This is the first time over the measurable period that this price range has surpassed product under $200,000 in total number of sales.
•Product between $200,000 and $300,000 has grown its market share by 44% from the first half of 2005 (5%) to the second half of 2011 (49%).
•The 350m2 to 450m2 lot size range continues to be the most popular throughout the Melbourne growth corridors comprising approximately 29% of total sales over the second half of 2011. This is followed by lots between 450m2 and 550m2 which made up 24% of sales over the same period.
•Colliers International recognizes that the increase in total sales for lots smaller than 450m2 is partially due to restrictions imposed by the State government which demands developers produce 15 lots per hectare.
Source: Pricefinder
VACANT LOT TURNOVER BY LGA: 2005-2011
Casey 16%Melton 17%
Whittlesea 16%Wyndham 33%
Hume 10%
Cardinia 9%
Source: Pricefinder
$200k-$300k
$300k-$400k
$600k-$700k
$700k+
<$200k
$500k-$600k
$400k-$500k
H2 2009 H1 2010 H2 2010 H1 2011 H2 2011
2,000
1,000
0
3,000
4,000
8,000
10,000
9,000
5,000
6,000
7,000
NUMBER OF VACANT LOTS SOLD BY PRICE RANGE IN MELBOURNE’S GROWTH AREAS
COLLIERS INTERNATIONAL | P. 12
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
COLLIERS INTERNATIONAL | P. 12
General House Market•The following analysis includes the sales of
new and established houses that have settled and been recorded on Pricefinder as at December 2011 in the growth areas of Melbourne. Previous figures have been revised due to time lags between exchange, settlement and data availability. Sales not at arm’s length or that were sold in one line are excluded.
•Between 2005 and December 2011 approximately 107,165 houses were sold and settled in the LGAs of Melton, Hume, Wyndham, Whittlesea, Cardinia, and Casey.
•Over the second half of 2011 the total number of sales dropped in the growth areas of Melbourne by approximately 11% from the first half of the year. The LGA of Cardinia recorded the greatest drop in sales with a decrease of 17%.
•All LGAs, except the City of Hume, recorded declines in total sales volumes over the six months to December 2011.
•The median house price in Melbourne’s growth areas decreased for the second time over the past 12 months. Down to $385,000 from $390,000.
•The LGA of Casey had the highest proportion of overall sales in the growth areas of Melbourne with 29%, followed by Wyndham with 18%, and Hume with 17%.
•Over the second half of 2011 overall sales volumes declined in the growth areas of Melbourne by 6%. The South Eastern Region saw the greatest deterioration in sales volume with a drop of 11% while the Northern Region saw only a 1% decrease in total number of sales.
•Unlike the vacant land market, the South Eastern Region of Melbourne comprised approximately 35% of house sales in the growth area of Melbourne over the second half of 2011, this area represented the smallest proportion of vacant lots sold in the region with only 14% of total sales.
•The Western corridor represented the second largest proportion of house sales (34%) this trend has been consistent for the past 12 months.
•Unlike the market for vacant lots, the house market has remained dominated by sales of lots between 550m2 and 650m2 since the first half of 2005. This is due in part to the quantity of existing stock of this size in the area.
•The proportion of lots sold between the 350m2 to 450m2 have increased 5% since the first half of 2005 to 12% of total sales while lots sold between 650m2 and 750m2 have decreased by 3% over the same period.
•Product between $300,000 to $400,000 has been the most popular sale price range since the first half of 2009 while the $400,000 to $500,000 range has grown its market share 20% since the first half of 2005.
•The proportion of property transactions in the $500,000 to $600,000 range have increased by 7% since the first half of 2005, while the proportion of properties priced under $300,000 have dropped by 59% over the same time period.
Source: Pricefinder
City of Casey City of HumeCity of Wyndham Shire of Melton Shire of CardiniaCity of Whittlesea
H12005
H22005
H12006
H22006
H12007
H22007
H12008
H22008
H12009
H22009
H12010
H22010
H12011
H22011
2,000
1,000
0
3,000
4,000
8,000
10,000
5,000
6,000
7,000
Media
n Sa
les P
rice
Num
ber o
f Sale
s
9,000
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
Median Sale Price
DEMAND AND MEDIAN SALE PRICES FOR HOUSES IN MELBOURNE’S GROWTH AREAS
COLLIERS INTERNATIONAL | P. 13
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
COLLIERS INTERNATIONAL | P. 13
General House Market
Source: Pricefinder
GENERAL MARKET INDICATORS – HOUSES
LGAMedian Sale Price Median Sale Price Half Yearly Annual
H1 11 H2 11 Change Change
Wyndham $380,000 $385,000 1% 1%
Whittlesea $425,000 $407,750 -4% -2%
Casey $392,500 $392,000 0% 1%
Cardinia $375,000 $361,000 -4% -2%
Hume $378,000 $367,550 -3% -2%
Melton $370,000 $370,000 0% 3%
“the new and established housing market has remained dominated by sales of lots between 550m2 and 650m2 since the first half of 2005”
Source: Pricefinder
HOUSE TURNOVER BY LGA: 2005-2011
Casey 35%
Cardinia 10%
Whittlesea 17%
Hume 17%
Melton 15%
Wyndham 22%
Source: Pricefinder
NUMBER OF HOUSES SOLD IN OUTER MELBOURNE
$300k-$400k
$400k-$500k
$700k-$800k
$800k+
<$300k
$600k-$700k
$500k-$600k
H2 2009 H1 2010 H2 2010 H1 2011 H2 2011
2,000
1,000
0
3,000
4,000
8,000
10,000
9,000
5,000
6,000
7,000
NUMBER OF HOUSES SOLD BY PRICE RANGE IN MELBOURNE’S GROWTH AREAS
COLLIERS INTERNATIONAL | P. 14
RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
OutlookWith the declines in demand shown via reduced building approval figures, population growth, and consumer sentiment during 2012 it is anticipated that vacant lot and house sales in the growth corridors of Melbourne will remain low. Colliers International expects that due to the removal of the First Home Owner Boost in June 2012 sale figures in the first half of 2012 will be higher than those in the second half due to certain purchases being pulled forward in order to obtain the government rebate but that overall annual sales figures will be similar to those recorded in 2011.
While it is highly unlikely that consumer sentiment will shift into the positive spectrum due to stagnating employment growth and steady unemployment rates over 2013 Colliers International expects that vacant lot and house sales in the growth corridors of Melbourne will continue at levels recorded over 2011 until the beginning of 2014. Along with the lack of demand and negative consumer outlook, financing issues are likely to persist for both purchasers and developers over the next 12 months as banks remain risk averse.
The ability to stimulate the market doesn’t rest with any one party, but rather, demands a more collaborative approach between developers, councils and state government in order to deliver more affordable housing in Melbourne. With the current environment, Colliers International anticpates that developers will offer varied lot sizes in order to deliver affordable house and land packages to the market. This action is anticipated to lead to a further increase in the proportion of sales between 350m2 and 450m2 and will lead to a more affordable median price recorded in both vacant lot and house sale prices over the next 16 months.
COLLIERS INTERNATIONAL
Level 32, 367 Collins Street, Melbourne VIC 3000TEL 03 9629 8888FAX 03 9629 4945
RESEARCHERS
Margaret Bowden Analyst / ResearchTEL 03 9940 7279FAX 03 9092 1479
Paul Wheate Director / ValuationTEL 03 9612 8823FAX 03 9092 1323
Colliers International does not give any warranty in relation to the accuracy of the information contained in this report. If you intend to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections.
Colliers International will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. COPYRIGHT - Colliers International 2012.
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RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE
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