Sydney residential communities research forecast report h2 2012


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Sydney residential communities research forecast report h2 2012

  1. 1. second Half 2012 | residential Research & Forecast Report Sydney Communities Population Growth Drives Demand Sydney’s Outer Ring has observed remarkable change and development over the last five years due to a flourishing population base translating into the need for additional housing and the release of numerous new estates. According to the Australian Bureau of Statistics (ABS) Census, the combined population of The Hills, Blacktown, Penrith, Liverpool, Campbelltown and Camden Local Government Areas (LGAs) has grown by 7%, equivalent to an additional 71,703 people, between 2006 and 2011. A further 37,806 dwellings, including detached and attached houses plus apartments, were constructed over the five year period, equating to an 11% increase in supply levels. With an average household formation rate varying between 2.9 persons in the Campbelltown and Penrith LGAs to 3.2 persons in the Liverpool LGA the number of new dwellings developed and absorbed over the five year period varies in each Region and municipality. The Parc, Kellyville Colliers International has sold 90% of the estate. There were 11,928 detached houses produced over the five year period, equivalent to 32% of the total new supply in the Outer Ring. However, when the size of the detached dwelling market is analysed within the context of the total housing market, the proportion of detached dwellings Recent Performance of the represents a solid 78% of all the residential supply, only 6 percentage points (pp) down on the trend Residential Communities Market: recorded in 2006. This suggests a growing market for attached dwellings and apartments in an area traditionally characterised as a detached housing market. This trend is expected to continue for the north west foreseeable future due to affordability constraints. West The North West Region, which encompasses The Hills and Blacktown LGAs, recorded the greatest population growth, not only in terms of actual number (39,870 persons) but also percentage change South west (9%), in the Outer Ring between the 2006 and 2011 Census. Approximately 470,971 persons currently reside in the North West Region. This population growth has translated into a further 18,574 new dwellings being completed, equivalent to 14% growth over five years, with 40% of this supply being categorised as detached housing. The number of new detached houses produced in the North West Region rose by 7% between 2006 and 2011. Overall, 80% of dwellings in this Region Key Highlights are defined as detached houses, down 5pp since the 2006 Census. The strength of the housing •A pproximately 36% of the stock has sold in market in the North West Region has translated into strong absorption levels being recorded within the Outer Ring, equivalent to a 6pp increase the eight major estates on offer. Currently this Region has the highest sales level with 53% of all the over a six month period. lots sold. •T he North West Region has 53% of all lots sold, followed by the Western Region with Residential Land Market Indicators - second Half 2012 32%. Region Average Sale Price Sold to Date Remaining Yield* Number of Projects •T he Outer Ring median vacant land sale North West $375,903 5,628 4,924 8 price rose by 17% over six months to peak West $257,320 1,350 2,810 4 at $321,000. South West $256,406 4,875 13,680 18 Total $282,503 11,853 21,414 30 * Includes lots that have yet to sell and that have not been released to market. Source: Colliers International Research
  2. 2. research forecast report | second Half 2012 | Residential | Sydney“Despite a “Low interest rates, The South West Region has reported the second highest population and dwelling increase between the 2006 and 2011 Census. The total population of the Liverpool, Campbelltown and Camden LGAs significant jump in coupled with new has grown by 25,506 persons or 7% to total 382,830. The demand for new housing ensured a further 13,530 dwellings were constructed, equivalent to 12% growth, with 34% of the new supply supply levels the government and being detached houses. The number of new detached houses produced between 2006 and 2011 expanded by 5% and this housing type now represents 76% of all supply. At present 4,875 lots have number of incentives developer sold in the South West Region, equivalent to 26% of the total number of lots. The total number of lots within the 18 estates in the South West Region is equivalent to more than twice the amount of apartments sold in are expected to supply in the North West and four times the amount offered in the West. the Southern drive buyers into The Western Region provides the smallest population and as at the 2011 Census the Perth LGA Precinct has the market” encompassed 178,468 persons, equivalent to 4% growth or an additional 6,327 persons between the 2006 and 2011 Census. Despite the smaller market there were a further 5,702 dwellings developed equivalent to a 10% increase. At present nearly 1,350 lots have sold in the four estates in the grown by an Western Region, equivalent to a 32% absorption rate. exponential Whilst the Census gives us a snapshot of the market as at 2011 the ABS building approvals data also121%” provides an indicator as to the amount of new supply which is likely to be developed in the short/ medium term. For the first six months of 2012 approximately 1,983 houses have been approved in the municipalities which encompass the Outer Ring. If the current trend recorded continues over the remainder of the year then the total number of house approvals will be approximately 6% below the 2011 record of 4,200 houses. However, with the introduction of a new first home owners grant on 1 October 2012 which will double the grant to $15,000 and increase the threshold to $650,000 for new homes only, we are of the opinion that demand is likely to grow in the latter half of the year as purchasers have placed their acquisition on hold to take advantage of increased rebates. Low interest rates coupled with buyers incentives offered by developers are expected to spur buyers into the market. House Approvals in The Outer Ring of Sydney 4,500 4,000 3,500 3,000 2,500 Number 2,000 1,500 1,000 500 0 2006 2007 2008 2009 2010 2011 Jan-June 2012 The Hills LGA Blacktown LGA Penrith LGA Liverpool LGA Campbelltown LGA Camden LGA Source: ABS Transport and Infrastructure In September the NSW Government released the draft NSW Long Term Transport Master Plan. The objective of the document is to establish the course for transport policy over the next 20 year period. Whilst the document identifies new road, rail and bus services, or at best upgrades, there is no exact timing as to when the projects will commence or where the funding will be derived from. A final plan will be released in November. The following table identifies the current status of major projects which are underway at present. Colliers International | p. 2
  3. 3. research forecast report | second Half 2012 | Residential | Sydney OUTER SYDNEY INFRASTRUCTURE UPDATE Infrastructure Project Location Status Estimated Completion Date Current Description Rail North West Rail Link North West Sydney. The NSW Government has Subject to planning approval, Eight stations to be located at Cudgegong Road, confirmed the location of the major tunnelling work is Rouse Hill, Kellyville, Bella Vista, Norwest, Hills stations. The first major EISs anticipated to commence in Centre, Castle Hill and Cherrybrook. The Plan has been lodged and the public 2014. The construction period includes 15kms of tunnels between Bella Vista and submission process has been will be approximately 8-10 Epping plus 4,000 commuter car spaces. completed. The submissions are years. being assessed. South West Rail Link South West Sydney. Construction of the project began The Glenfield Transport A 12km twin track rail line connecting Glenfield to Camden, Campbelltown and in August 2009 at Glenfield. Interchange is expected to be Leppington via Edmondson Park. Two new stations Liverpool LGAs. completed in 2013. The new rail will be added at Leppington and Edmondson Park, line is expected to commence including interchanges and commuter car parking. operation in 2016. Glenfield Station will be upgraded and a new 700 vehicle multi-storey commuter car park will be developed at Glenfield. The commuter car park at Seddon Park in Glenfield will be extended. Macarthur Turnback South West Sydney. The design is currently underway N/A. Platform 3 will be converted into a new island Campbelltown LGA. and is scheduled to be completed and fourth platform. A new 1.1km track will be in late 2012. constructed at Macarthur Station. Liverpool Turnback and South West Sydney. Under construction. The Liverpool Turnback Project Construction of a new platform and 1.8km of new Platform Liverpool LGA. will be completed in 2013, with track. the new track and passenger facilities to become fully operational in 2014. ROAD The Northern Road, North West Sydney. Detailed design phase. Construction is planned in two Widening of The Northern Road from a two lane Cranebrook Penrith LGA. stages. Stage 1 of the upgrade undivided road to a four lane divided road between will commence in late 2012 and Andrews Road and north of Borrowdale Way. The be completed in 2014. upgrade will be built by Lend Lease as part of their statutory approval for Jordan Springs. Werrington Arterial Road, North West Sydney. Contracts have been awarded to N/A. A proposed arterial road along Kent Road/Gipps Claremont Meadows Penrith LGA. prepare the concept design and to Street and Werrington Road/Christie Street to link undertake an environmental impact the M4 Motorway at Claremont Meadows with the assessment for Stage 1. Castlereagh Freeway corridor at Marsden Park. Richmond Road upgrade - Upgrade - North West The concept design and review Construction is planned in The widening of Richmond Road from a two to between Bells Creek and Sydney. Blacktown LGA. of environmental factors were stages in conjunction with four lane road between Bells Creek and Vine Vine Street west approved in April 2012. precinct development. Street West. Stage 1 of the proposal includes road widening to four lanes of Kent Road/Gipps Street corridor between the M4 Motorway and the Great Western Highway. Schofields Road Corridor North West Sydney. The detailed design for Stage 1 Stage 1 is anticipated to Schofields Road would be extended to Richmond Blacktown LGA. was completed in early 2012. The commence in the later half of Road creating a major east-west connection concept design and review of 2012 and be completed by late between Windsor and Richmond Roads. environmental factors for Stage 2014. Construction would occur over three stages. 2 is expected to be on display in late 2012. A concept design and a review of environmental factors for Stage 3 are planned to be on public display in late 2014. M5 South West Widening South West Sydney. Work commenced in August 2012. Late 2014. The South West Motorway will be expanded from two to three lanes in each direction between Camden Valley Way and King Georges Road. Camden Valley Way upgrade South West Sydney. Construction is progressing at Early 2015. The upgrade from a two to four lane road will be - between Oran Park Drive various stages along the roadway. undertaken over three stages. The first stage will and Bringelly Road be Ingleburn to Raby Roads; followed by Raby Road to Oran Park Drive; and then Bringelly to Ingleburn Roads. Campbelltown Road Upgrade South West Sydney. Preliminary investigations have N/A. Upgrade Campbelltown Road between Hume commenced. Highway/Camden Valley Way (The Cross Roads), Casula and Denham Court Road, Denham Court. The road will be widenend from two to four lanes. Narellan Road, Mount Annan South West Sydney. Work has commenced. N/A. The introduction of a third lane, westbound on Narellan Road between the Hume Highway interchange and The Australian Botanic Gardens entrance at Mount Annan.Source: Transport Construction Authority, Roads Traffic Authority, Sydney Water, Draft NSW Long Term Transport Master Plan. Colliers International | p. 3
  4. 4. research forecast report | second Half 2012 | Residential | Sydney OUTER SYDNEY INFRASTRUCTURE UPDATE Infrastructure Project Location Status Estimated Completion Date Current Description road (cont.) Northern Road Upgrade South West Sydney. The preliminary concept design N/A. Upgrade the road from two to four lanes road Camden and Liverpool LGA. has been displayed. The concept between The Old Northern Road, Narellan and design will be further developed Mersey Road, Bringelly. and a review of environmental factors prepared. Bringelly Road Upgrade South West Sydney. Currently in detailed design phase. N/A. Widening of Bringelly Road from a two to a four/ Camden, Campbelltown and six lane divided road between Camden Valley Way, Liverpool LGAs. Leppington and The Northern Road, Bringelly. Water North West Growth Centre - North West Sydney. The contract for design and N/A. Will include work to service parts of Box Hill, Package 2 construction was expected to be Schofields, Alex Avenue and Riverstone. awarded in mid-2012. Edmondson Park Urban South West Sydney. Commenced in late 2011. Catchment C is expected Water and wastewater trunk infrastructure Release Area to be complete in late for Catchment C will include 0.25km of water September 2012. Timeframes pipeline and 1.5km of wastewater pipeline. This for Catchment D and E are infrastructure will service approximately 2,000 dependant on demand for residential lots. housing and development.Source: Transport Construction Authority, Roads Traffic Authority, Sydney Water, Draft NSW Long Term Transport Master Plan. Sydney Communities Hornsby Pittwater Baulkham Hills Blacktown Penrith Middle Sydney Inner Sydney Liverpool Camden Sutherland CampbelltownPrepared by Colliers International Research Colliers International | p. 4
  5. 5. research forecast report | second Half 2012 | Residential | Sydney North West Region The North West Region continues to offer eight major estates, equivalent to 32% of the Outer Ring’s supply. At present 53% of the 10,552 lots have been absorbed, a 4pp increase over the last six months. This is the highest proportion of lots sold in all Regions within the Outer Ring. Of the total lots sold, 63% have occurred within the Blacktown LGA. The higher sales rate achieved in the Blacktown LGA is attributed to the more affordable lots provided within the municipality when compared to The Hills LGA. The Ponds is the most successful estate in the Blacktown LGA and North West Region with over 2,100 lots transacting since 2007. Beaumont Rise, The Parc and Bella Vista have sold in excess of 90% of their total stock and all are located within The Hills LGA. The success of the first two estates is attributed to their affordable stock when compared to other estates in The Hills, for example the average sale price for a house and land package in The Parc was $570,000. In comparison the average sale price achieved for a vacant lot over 2012 in Bella Vista was $651,214. Over the last six months Ropes Crossing has recorded 198 sales, with the majority comprising of vacant lots. The estate has recorded the lowest average sale price ($205,235) in the North West region. The Parc and The New Rouse Hill have also recorded in excess of 100 transactions over the six month period.Stonecutters Ridge, ColebeeApproximately 27% of the estate has been absorbedsince 2008. North West Region Market Activity – residential estates Year Sold to Remaining Estate Name Suburb LGA Total Lots % Sold Commenced Date Yield Bunya Bungarribee Blacktown 2010 730 102 628 14% Stonecutters Colebee Blacktown 2008 840 223 617 27% Ridge Second Ponds The Ponds Blacktown 2007 3,200 2,104 1,096 66% Creek Ropes Crossing St Marys Blacktown 2005 2,204 1,111 1,093 50% Beaumont Rise Beaumont Hills The Hills 2008 168 158 10 94% Bella Vista 1,330 70 Bella Vista The Hills 2001 1,400 95% Waters Estate The Parc Kellyville The Hills 2011 210 189 21 90% New Rouse Hill Rouse Hill The Hills 2007 1,800 411 1389 23% Source: Colliers International Research Colliers International | p. 5
  6. 6. research forecast report | second Half 2012 | Residential | Sydney Western Region The Western Region provides 13% of the Outer Ring’s supply with a total of 4,160 lots to be delivered over four estates. Approximately 32% of the stock has sold, up 6pp over a six month period. Approximately 415 lots in the Western Region have transacted since the previous report. Only 18% of the stock in Glenmore Ridge remains following the absorption of 181 lots over the last six months. This equates to a 33pp rise in the proportion of lots sold. Based on the current trend, the estate should be nearing completion within the next six months. Of the 611 lots in Waterside approximately 62% of the stock has been absorbed since the estate was released in 2003. Over the last six months the proportion of lots sold has increased by 20pp. The average sale price over the First Half 2012 was $244,120 in Waterside, $278,542 in Glenmore Ridge and $249,298 in Jordan Springs. Western Region Market Activity - residential estates Year Sold to Remaining Estate Name Suburb LGA Total Lots (%) Sold Commenced Date Yield Waterside Cranebrook Penrith 2003 611 379 232 62%Jordan Springs Glenmore Ridge Glenmore Park Penrith 2004 522 428 94 82%Since 2010 nearly 500 lots have sold within thisestate. Mulgoa Rise Glenmore Park Penrith 2011 577 55 522 10% Werrington Jordan Springs Penrith 2010 2,450 488 1,962 20% County Source: Colliers International Research Colliers International | p. 6
  7. 7. research forecast report | second Half 2012 | Residential | Sydney South West Region The South West Region offers the greatest amount of competition in the Outer Ring with 18 estates or a total of 18,555 lots equivalent to 56% of the Outer Ring’s new supply. Over the last six months, only one major estate has been released, Glenfield Chase. This new estate, in Glenfield has been well received as 24% of the 250 lots have already been absorbed. Since the First Half 2012 the proportion of stock in the South West Region which has sold has risen by 4pp to 26%, despite total supply levels rising by 1%. Approximately 730 lots have been absorbed over the last six months. The Camden LGA continues to dominate supply levels and offers 72% of the South West Region’s stock. Over the last six months the Liverpool LGA recorded the greatest number of sales (345 lots), followed by the Camden LGA (208 lots). However, in terms of percentage sold the Campbelltown LGA currently has 44% of all stock sold, equivalent to an 11pp increase since the First Half 2012 report. Garden Gates in Mount Annan is the only estate to be nearing completion, with 93% of the 730 lots having been sold since the release in 2004. Panorama in Glenfield was released in 2005 by Mirvac and has 73% of its stock absorbed. The proportion of lots sold in the other 16 estates ranges from 11% to 57%.Freemans Ridge, Carnes Hill The average vacant land price achieved since 2011 in Panorama is $264,882. Interestingly theIn excess of 200 lots have sold since 2009. average lot size sold has jumped from 307m² in 2011 to 538m² in the First Half 2012. Freemans Ridge has recorded an average lot size of 468m² and average sale price of $280,276 in 2012. The average sale price in Parkbridge for 2012 is $248,502 whilst the average lot size sold is 401m². South West Market Activity Year Sold to Remaining Estate Name Suburb LGA Total Lots (%) Sold Commenced Date Yield The Hermitage Catherine Field Camden 2011 1,400 150 1,250 11% Manooka Valley Currans Hills Camden 2011 67 8 59 12% The Ridges Elderslie Camden 2006 547 232 315 42% Gregory Hills Gregory Hills Camden 2010 2,400 283 2,117 12% Garden Gates Mount Annan Camden 2004 730 681 49 93% Harrington Grove Narellan Camden 2008 1,100 276 824 25% Oran Park Town Oran Park Camden 2010 5,000 600 4,400 12% Centre Ayre Spring Farm Camden 2007 675 257 418 38% Spring Farm Spring Farm Camden 2007 1,048 297 751 28% Estate East Village Spring Farm Camden 2011 465 64 401 14% Panorama Glenfield Campbelltown 2005 515 377 138 73% Ingleburn Ingleburn Campbelltown 2008 287 74 213 26% Gardens One Minto Minto Campbelltown 2008 800 253 547 32% Freemans Ridge Carnes Hill Liverpool 2009 900 212 688 24% Elizabeth Hills Cecil Hills Liverpool 2011 648 113 535 17% Glenfield Chase Glenfield Liverpool 2010 250 60 190 24% Middleton Parkbridge Liverpool 2009 723 410 313 57% Grange Georges Fair Moorebank Liverpool 2006 1,000 528 472 53% Source: Colliers International Research Colliers International | p. 7
  8. 8. research forecast report | second Half 2012 | Residential | Sydney New Supply Pipeline • Thesupply levels include lots yet to be sold/ • Following community consultation and feedback, released in the Communities contained herein new draft plans for Box Hill and the Box Hill this report plus land releases in various stages Industrial precinct were publicly exhibited of planning. between July and August. The new draft plans • Futuresupply levels are constantly changing include variations to housing density levels to as lots are absorbed, development plans are provide 9,540 dwellings in total, the expansion changed and new applications are lodged. of employment land toward Windsor Road The following analysis is a reflection of a allowing for 128 hectares to be delivered and point in time. modifications to riparian corridors. • Substantial • The draft Development Control Plan (DCP) releases due in the short/medium term include Marsden Park in the North for Edmondson Park South proposes providing West, South Edmondson Park (the former more affordable housing options by decreasing Ingleburn Defence site) in the South West the minimum lot size by 50m² to 200m², for and Thornton, North Penrith (the former detached and semi-detached dwellings in the Defence site) in the West. general residential and mixed-use zones, which is likely to result in increased yields. This further • The first stage of the ‘Old Defence Site’ in cements the changing desire for smaller lots. Penrith has been approved. Under the • Developers will benefit from the announcement Concept Plan Landcom will deliver 900 to 1,000 homes on the site. of the extension of the State Infrastructure Contribution levy beyond the 30 June 2012 • Edmondson Park South is located within deadline. The NSW government will continue both the Liverpool and Campbelltown Local providing funding for 50% of necessary Government Areas and is set to be released infrastructure costs which will assist in towards the end of 2012. The redevelopment driving new supply. will incorporate in excess of 2,200 regular • In the2012/13 NSW Budget a $481 residential allotments, rural residential lots, residential unit sites, commercial development million Housing Acceleration Fund to build sites and school sites. infrastructure necessary for new housing, particularly in Greenfield locations, was • TheDepartment of Planning and Infrastructure announced. released a draft precinct plan for 463 hectares • New estates which are set to be released at East Leppington between July and August. East Leppington, which is located east of by Landcom in the short-term include Potts Camden Valley Way and north of St Andrews Hill (430 to 450 homes), Highcrest (175 lots) Road, will have the capacity for 4,000 homes, in Middleton Grange and Caddens (340 lots). a new primary school, plus retail and recreational areas. The precinct will also benefit from being located on the South West Rail Link. Estimated Proportion of Future Supply by Region North West 34% North West 34% South West 63% South West 63% West 3% West 3% Source: Department of Planning, Cordells Construction Projects, Colliers International Research Colliers International | p. 8
  9. 9. research forecast report | second Half 2012 | Residential | Sydney General Land Market“Outer Ring median • The following analysis includes the sales of whilst the Liverpool LGA’s median lot price vacant lots that have settled and been fell by prices rose by recorded on RP Data as at December 2011 in the Outer Ring of Sydney. Previous figures • Despite the Campbelltown LGA median lot price recording the greatest growth over a17% over a six have been revised due to time lags between exchange, settlements and data availability. six and twelve month basis (31% and 23%) the $265,000 price is ranked third highest ofmonth period to Sales not at arm’s length or that were sold in-one-line are excluded. all the Outer Ring municipalities. • The Blacktown and Camden LGAs havepeak at $321,000” • Between 2005 and 2011 approximately 14,926 vacant lots were sold and settled in recorded six and five periods of consecutive median lot price growth respectively. The The Hills, Blacktown, Penrith, Liverpool, change in median price growth has wavered Campbelltown and Camden LGAs. in the other municipalities. Approximately 50% of the sales have • The 450m² to 550m² lot size range occurred within the North West Region, with continues to dominate the market with 42% 42% of transactions within the South West. of all sales falling within this category. Over • Total Outer Ring sale numbers declined by calendar 2011 this lot size range recorded 46% over the six months to December 2011 38% of all the sales, well below the 46% and 33% over the year. All municipalities recorded in both 2008 and 2009. recorded a decrease in sale numbers. • Affordability issues have resulted in • The Blacktown LGA has continued to record increasing demand for the smaller lot. The the largest market share with 41% of all 350m² to 450m² lot size range recorded 18% sales occurring within this municipality over of all sales in 2011, well above the 7% of the six month period. Whilst the proportion of sales in this lot size range during 2005. sales within the Blacktown LGA only grew by • In comparison demand for the 550m² to 2pp over the six months The Hills LGA 650m² lot range has waned from 24% in reported a 15pp increase to capture 21% of 2005 to the current 15%, which has been all land sales. recorded in both 2010 and 2011. • The median sale price for vacant lots in the • Whilst the $200,000 to $300,000 price Outer Ring increased by 17% over the six range has dominated since 2005, the months and 11% year on year to peak at proportion of sales has fallen from 58% in $321,000. This is the first period of growth 2005 to 44% in 2011. In comparison the following two consecutive periods of decline. $300,000 to $400,000 price range currently • Only two municipalities recorded a decline in represents 35% of the 2011 sales, up on the the median lot price over the six month 26% reported in 2005. The rising cost of period. The Hills LGA continues to hold the land will ultimately result in further demand title of the highest median lot price for smaller lots. ($420,556) despite the figure falling by 14% DEMAND AND MEDIAN SALE PRICES FOR VACANT LOTS IN OUTER SYDNEY 2,000 $350,000 1,800 $300,000 1,600 1,400 $250,000 Number of Sales Median Sale Price 1,200 $200,000 1,000 $150,000 800 600 $100,000 400 $50,000 200 0 0 H105 H205 H106 H206 H107 H207 H108 H208 H109 H209 H110 H210 H111 H211 The Hills LGA Blacktown LGA Penrith LGA Liverpool LGA Campbelltown LGA Camden LGA Median Sale Price Source: RP Data Colliers International | p. 9
  10. 10. research forecast report | second Half 2012 | Residential | Sydney General Land Market General Market Indicators – Vacant Land Median Sale Price Median Sale Price Half Yearly Annual LGA H111 H211 Change Change The Hills $488,000 $420,556 -14% -12% Blacktown $340,000 $344,000 1% 3% 2,000 Penrith $240,000 $250,000 1,800 4% -3% 1,600 Liverpool $279,000 $260,000 -7% 0% 1,400 Number of Sales Campbelltown $202,000 $265,000 1,200 31% 23% 1,000 Camden $238,500 $255,000 7% 8% 800 Source: RP Data 600 400 200 Vacant LOT TURNOVER BY LGA: 2005 TO 2011 Number of Vacant LOT SALES BY PRICE RANGE IN OUTER SYDNEY 0 H209 H110 H210 H111 H211 2,000 1,800 $200k $600k-$700k $200k-$300k $700k-$800k 1,600 $300k-$400k $800k-$900k $400k-$500k $900k-$1m 1,400 Campbelltown LGA 6% $500k-$600k $1m+ Number of Sales 1,200 Liverpool LGA 17% Penrith LGA 8% 1,000 Blacktown LGA 35% 800 The Hills LGA 15% 600 Camden LGA 19% 400 200 0 H209 H110 H210 H111 H211 Campbelltown LGA 6%Source: RP Data Source: RP Data $200k $600k-$700k Liverpool LGA 17% $200k-$300k $700k-$800k Penrith LGA 8% $300k-$400k $400k-$500k $800k-$900k $900k-$1m Blacktown LGA 35% $500k-$600k $1m+ The Hills LGA 15% Camden LGA 19% Colliers International | p. 10
  11. 11. research forecast report | second Half 2012 | Residential | Sydney General House Market“The number of • The following analysis includes the sales of new and established houses that have settled • The Blacktown LGA also continues to dominate the Outer Ring housing market andhome transactions and been recorded on RP Data as at December 2011 in the Outer Ring of Sydney. has recorded 26% of all sales since 2005, a 2pp increase over a six month period. Inin the Outer Ring Previous figures have been revised due to time lags between exchange, settlements and comparison, the Blacktown LGA vacant land market represents 35% of the Outer Ringincreased by an data availability. Sales not at arm’s length or that were sold in-one-line are excluded. market. • The median sale price for a house in theexponential 31% • Between 2005 and 2011 approximately Outer Ring declined by 3% over the Secondover a six month 82,171 houses sold and settled in The Hills, Half 2011 and 2% over the year. This is the Blacktown, Penrith, Liverpool, Campbelltown first annual decline recorded after fiveperiod” and Camden LGAs, approximately 5.5 times consecutive periods of growth. larger than the vacant land market. • TheHills median house price peaked at • Yet again the North Western Region $700,000 in the First Half 2011 and over the continues to dominate sales turnover figures six month period weakened by 3%. Despite the with 42% of all transactions occurring in this decline, the municipality continues to record Region since 2005. the highest median price in the Outer Ring. • Over the Second Half 2011 the number of • Only the Penrith and Liverpool LGAs recorded houses sold rose by 31% to total 7,390 whilst an increase of 1% respectively in the median year on year figures show growth of 10%. All house prices over the six month period. Regions recorded an increase in sales • Unlike the vacant land market, there is no figures on a six and twelve monthly basis. discernible movement in the level of demand The Western Region reported transactional for the smaller lot. This is attributed to the growth of 23% over the six month period. size of the housing market in comparison to • Allthe municipalities recorded an upsurge in the vacant land market. the number of sales over the six month • The $300,000 to $400,000 price range period, the most notable being the Blacktown maintains the title of most popular sale LGA (32%) followed by the Campbelltown bracket in 2011 with 35% of all sales in the LGA (23%). Outer Ring. DEMAND AND MEDIAN SALE PRICES FOR HOUSES IN OUTER SYDNEY 8,000 $440,000 7,000 $420,000 6,000 $400,000 Median Sale Price 5,000 Number of Sales 4,000 $380,000 3,000 $360,000 2,000 $340,000 1,000 0 $320,000 H105 H205 H106 H206 H107 H207 H108 H208 H109 H209 H110 H210 H111 H211 The Hills LGA Blacktown LGA Penrith LGA Liverpool LGA Campbelltown LGA Camden LGA Median Sale Price Source: RP Data Colliers International | p. 11
  12. 12. research forecast report | second Half 2012 | Residential | Sydney General House Market • Therising cost of housing is evident when • In 2011 the $300,000 to $400,000 price the market share by price range is analysed range was most prevalent in the Blacktown over time. In the calendar year 2011, 32% of LGA (36%), Campbelltown LGA (57%) all house sold in The Hills LGA were in the and Penrith LGA (52%). The $400,000 $600,000 to $700,000 price range, whereas to $500,000 dominated the Camden LGA in 2005 only 17% of sales fell within this (40%) and Liverpool LGA (42%). price range. Furthermore in 2011, 18% of houses were priced between $500,000 and $600,000, significantly down on the 35% of sales recorded in 2005. General Market Indicators – HOUSES Median Sale Price Median Sale Price Half Yearly Annual LGA H111 H211 Change Change The Hills $700,000 $680,000 -3% -3% Blacktown $417,000 $405,000 -3% 3% Penrith $371,000 $375,000 1% 3% Liverpool $447,750 $450,000 1% 1% Campbelltown $339,975 $340,000 0% 2% Camden $444,250 $441,000 -1% 0% Source: RP Data House Turnover by LGA: 2005 to 2011 Number of HOUSEs SOLD BY PRICE RANGE IN OUTER SYDNEY 8,000 Number of Houses S 8,000 7,000 $200k-$300k 7,000 6,000 $300k-$400k Number of Sales Campbelltown LGA 15% 6,000 5,000 $400k-$500k Liverpool LGA 16% 5,000 $500k-$600k Penrith LGA 19% 4,000 Number $600k-$700k 4,000 Blacktown LGA 26% 3,000 $700k-$800k 3,000 The Hills LGA 17% 2,000 $800k-$900k Camden LGA 7% 2,000 $900k-$1m 1,000 1,000 $1m+ 0 0 H209 H209 H110 H210 H111 H211 $200k-$300k $300 Campbelltown LGA 15%Source: RP Data Source: RP Data Liverpool LGA 16% Penrith LGA 19% Blacktown LGA 26% The Hills LGA 17% Camden LGA 7% Colliers International | p. 12
  13. 13. research forecast report | second Half 2012 | Residential | SydneyOutlook 522 offices inDemand for Sydney’s Outer Ring Communities in the short and medium term will be supported 62 countries onby population growth, low interest rates, government incentives, new infrastucture and improvinglevels of consumer sentiment. Supply levels continue to be constrained by fragmentation issues, 6 continentsinfrastructure costs and financing issues associated with development sites, ensuring an United States: 147 officesoversupplied market is not foreseen in the short/medium term. Canada: 37 officesThe cash rate still remains at historically low interest rates and is currently just below the Latin America: 19 officesmedium-term average. Deloitte Access Economics has forecast the cash rate to decline in Asia Pacific: 201 offices EMEA: 118 offices2013 thus further lowering the cost of housing. Coupled with falling median prices in recenttimes the Outer Ring Communities market is set to provide opportune buying options. • 1.8 billion in annual revenue $Government incentives that will further stimulate the housing market include the First Home • .25 billion square feet under 1Owner Grant (New Homes) Scheme which will come into effect from 1 October 2012. managementThe $7,000 First Home Owner Grant will be replaced by a $15,000 grant in NSW and only • ver 12,300 professionals worldwide Oapplies to new housing. Traditionally the introduction of a new government incentive bringsforward demand for housing as the cost of entry to the market is eased. To take advantage ofthe new Scheme many first home buyers have placed there purchasing decision on hold until COLLIERS INTERNATIONALthe 1 October 2012. The $15,000 will be reduced to $10,000 from 1 January 2014 and a spikein the number of buyers entering the market in the Second Half 2013 is expected. Level 12, Grosvenor Place 225 George StreetAnother government incentive that is driving absorption rates is the First Home—New Home Sydney, NSW, 2000Scheme which results in transfer duty exemptions on vacant blocks of land up to $350,000 tel 02 9257 0222and new homes valued up to $550,000. Concessions on transfer duty for to vacant blocks of FAX 02 9347 0710land priced between $350,000 and $450,000 and new homes valued between $550,000 and$650,000 are also available. Developers will seek to take advantage of the new Scheme andprovide product that meets the price criteria, resulting in an increase in the number of smallerlots and house and land packages on offer. Over the last five years there has been a marked researcher researcherchange in the number of smaller lots being acquired and this is attributed to the ever increasing Ariel Pollard Robert Fischercost of entry in the housing market. Despite the price caps associated with the government Director |‌‌ Research Director |‌‌ Valuationincentives Colliers International anticipates demand for the smaller lot i.e. under 450m² to Tel 02 8337 6207 Tel 02 9840 0221continue in the long term as the cost to acquire larger lots will restrict buyers. Fax 02 8987 0107 Fax 02 9761 7421Financing issues surrounding either development site acquisition and long term constructionprojects will ensure the market is not saturated with product, however the lack of choice is likelyto place additional pressures on prices. Coupled with the delays associated with the planning Colliers International does not give any warranty insystem, lack of suitable infrastructure to development sites and the costs associated with relation to the accuracy of the information contained in this report. If you intend to rely upon the informationinfrastructure levies Sydney’s Outer Ring will not be faced with oversupply issues in the short/ contained herein, you must take note that themedium term. The NSW Government has recognised these issues and announced the formation information, figures and projections have been provided by various sources and have not been verified by us.of Urbangrowth NSW. The objective of Urbangrowth NSW is to “coordinat[e] and delive[r] on new We have no belief one way or the other in relation to thedevelopment sites which are deemed problematic by the private sector”. Demand fundamentals accuracy of such information, figures and projections.remain positive in the Sydney Outer Ring Communities market, however supply constraints Colliers International will not be liable for any loss orcontinue to impact the market placing further pressure on the market. damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. © Colliers International 2012. Accelerating success. Colliers International | p.