Research Briefing

N o v e m b e r 2 0 1 8

Wendy Merchan – Research Manager The Melbourne Property Market is likely to face further pressures into 2019. House prices have declined more significantly than had previously been predicted. This however, has seen first time buyers coming back into the market, replacing some of the demand left by investors. A cap on interest-only lending specifically targeted the investors in the property market, which made up 46 percent of the market in Victoria. Tighter lending conditions, which have resulted in mortgages becoming harder to obtain, along with changes to lending criteria, resulting in maximum borrowing amounts declining have affected purchasers decisions. This has slowed the growth in the amount of credit available for housing, which in turn has lowered prices. Throughout the balance of 2018, retail spending will moderate, as it did in Q3-18, though retailers are still positive heading into the Christmas period, after a relatively good year, in terms of sales and profits. A combination of weak wages growth and falling house prices are impacting on consumer sentiment. Employment growth is exceeding expectations, and unemployment is holding steady, counterbalancing some of this weakness. The housing market is still underpinned by record low interest rates and a relatively stable, if not slightly subdued economic environment, and strong population growth.

Melbourne Residential property price indexes in Q3 fell Annually, Sep-17 to Sep-18, residential property prices fell in Melbourne Source: ABS Residential Property Index, released 11/12/2018

Number Financed Average loan size 2,588 3,040 +15% $354,600 $358,900 +1% FIRST HOME BUYER Sep-18 Oct-18 Sep-18 Oct-18 3,250 +26% $332,600 -6% Oct-17 Oct-17 Average loan size Number Financed $401,500 $358,900 -12% NON FIRST HOME BUYER 11,397 13,545 +16% Sep-18 $399,400 Oct-18 Oct-18 Sep-18 13,900 Oct-17 +22% Oct-17 -1% Source: ABS Housing Finance Commitments – released 10/12/2018

Changes to financing Slow wage growth Unemployment Finance provision to A shift in consumer arrangements at and a changing down, and Population investors has fallen by sentiment, has changed, individual borrowing lending landscape has is up! In Victoria, 5 percent over Q3- from a fear of missing levels, symptomatic impacted employment growth 2018. APRA is now out, to a perception of of the Royal affordability at the sits at 2.6 percent, lifting the investor having more time to see Commission into the first homebuyer end and population is up lending cap the results of pricing misconduct in the of the market 2.2 percent (ABS). introduced in 2017 shifts and supply Banking, Victoria really is ‘the increases Superannuation and place to be’ Finance Services Industry



Prices Cancelations Pricing continues its slow crawl Cancellations, across the downwards, with 1% reduction across Melbourne & Geelong most corridors. There is, of course, market, have increased by always an exception, this month it was 41% on a month to month the Epping/Wollert sub-region which comparison. saw an increase, circa 3%, in the 350, 400 & 448sqm lot types. . Land Availability The Market On a month to month comparison, Following trends set in September & land availability has increased Octobers, further reductions in net across the Melbourne & Geelong sales occurred throughout November, markets by 9%. The exception this with a -20% decrease across the month was the South East corridor, Melbourne & Geelong markets (Oct- which saw a decrease in availability, Nov). The exception, being the South primarily attributed to the Minta East Corridor, which saw a slight sales. increase in sales, due primarily to the launch of Minta, resulting in a positive trend for the Casey North sub-region of 6%. .

Corridor Activity Sales Lots Available Active Estates GREATER GEELONG Oct-18 Nov-18 406 439 +8% Oct-18 Nov-18 -18% Oct-18 Nov-18 -19% 104 84 92 112 14 15 Net Gross Net Gross Oct-18 Nov-18 Sales Lots Available Active Estates NORTH Oct-18 Nov-18 803 964 +20% Oct-18 Nov-18 -33% Oct-18 Nov-18 -57% 192 129 76 177 38 35 Gross Net Net Gross Oct-18 Nov-18 Sales Lots Available SOUTH EAST Active Estates 960 848 -12% 143 151 +6% 120 129 +8% 38 39 Net Gross Gross Net Nov-18 Oct-18 Oct-18 Nov-18 Oct-18 Nov-18 Oct-18 Nov-18 Active Estates Lots Available Sales WEST 59 65 1196 1406 +18% 362 340 -6% 300 271 -10% Oct-18 Nov-18 Oct-18 Nov-18 Gross Gross Net Net Oct-18 Nov-18 Oct-18 Nov-18



Region Activity – November Armstrong Active Estates Lots Available Gross Sales Net Sales Cancellations 8 325 59 54 5 Donnybrook/ Active Estates Lots Available Gross Sales Net Sales Cancellations Mickleham 12 356 71 52 19 Epping Active Estates Lots Available Gross Sales Net Sales Cancellations Wollert 12 259 30 19 11 Casey South Active Estates Lots Available Gross Sales Net Sales Cancellations 12 331 33 25 8 Officer/ Active Estates Lots Available Gross Sales Net Sales Cancellations Pakenham 5 108 20 18 2 Plumpton Active Estates Lots Available Gross Sales Net Sales Cancellations 13 274 46 38 8 Rockbank Active Estates Lots Available Gross Sales Net Sales Cancellations 5 116 29 25 4 Truganina/ Active Estates Lots Available Gross Sales Net Sales Cancellations Tarneit 19 352 99 89 10 Werribee/ Active Estates Lots Available Gross Sales Net Sales Cancellations Wyndham Vale 12 317 82 51 31

350 m 2 400m 2 $450,000 $1,300 $500,000 $1,300 $1,200 $1,200 $400,000 $1,100 $450,000 $1,100 $1,000 $400,000 $1,000 $350,000 $900 $350,000 $900 $800 $800 $300,000 $700 $300,000 $700 $250,000 $600 $250,000 $600 $500 $500 $200,000 $400 $200,000 $400 Average price by region Average price for UGZ PSQM Average price by region Average price for UGZ PSQM 448 m2 $550,000 $1,200 $500,000 $1,100 $1,000 $450,000 $900 $400,000 $800 $350,000 $700 $300,000 $600 $250,000 $500 $200,000 $400 Average price by region Average price for UGZ PSQM

Average Pricing 350m 2 400m 2 448m 2 Armstrong $246,335 $269,510 $289,641 Casey North $376,273 $404,300 $433,391 Casey South $323,841 $347,376 $377,624 Casey West $331,508 $356,000 $391,164 Craigieburn $323,700 $372,600 $397,957 Donnybrook/ Mickleham $297,986 $321,810 $339,963 Epping Wollert $340,006 $377,805 $406,279 Greenvale - $397,700 $429,000 Melton $248,917 $261,517 $281,212 Officer/ Pakenham $311,571 $310,000 $345,000 Plumpton $341,418 $354,358 $382,331 Point Cook $410,143 $466,200 $519,833 Rockbank $286,363 $315,130 $327,000 Sunbury/ Diggers Rest $265,000 $296,800 $318,000 Truganina $318,533 $347,855 $376,430 Wallan $269,846 $270,000 $291,500 Werribee/ Wyndham Vale $282,158 $301,153 $326,493

Throughout Oct. The Epping/Wollert Here lies the tale of a new release region had 15 lots available in 400m2, in Riverhills and a lot opposite whilst in Nov. there were 21 lots at 400m2, parkland listed at $431K increasing product diversity $420,000 $410,000 $400,000 $390,000 $380,000 $370,000 $360,000 Epping/ Wollert $350,000 Plumpton Median price $340,000 Truganina/ Tarneit $330,000 Donnybrook/ Mickleham $320,000 Rockbank $310,000 Officer/ Packenham $300,000 Werribee/ Wyndham Vale $290,000 $280,000 Armstrong Creek $270,000 $260,000 Sep Oct Nov



Average Price (3 bedroom) Estates Comments Epping/ Wollert $475,552 $477,151 +0.3% Amber, Arramont, Lyndarum North, Oct - 18 Nov - 18 Aurora, Eden Gardens & Elyssia Casey North $508,232 - - % Alira, Aspen On Clyde, Circa & St Germain Oct - 18 Nov - 18 Werribee/ Wyndham Vale $422,203 $422,744 +0.1% Harpley, Jubilee Oct - 18 Nov - 18 Casey South $553,000 $492,933 -11% Lilium, Eliston & Highgrove Lilium's townhouses have reduced $5k - $10k Oct - 18 Nov - 18 Donnybrook/ Mickleham $457,383 $457,383 0% Merrifield & Mandalay Oct - 18 Nov - 18 Truganina/ Tarneit $475,216 $453,883 -0.7% Marigold Riverdale Village Olivia & Habitat Habitat's townhouses have reduced by $10k Oct - 18 Nov - 18 Plumpton $449,329 $442,768 -1.5% Sienna Rise / Sienna North, Attwell, No price reduction, however some larger Oct - 18 Nov - 18 Deanside Village & Aspire townhouses are assumed to be sold Officer/ Packenham $538,780 $539,725 +0.2% Timbertop & Arcadia Oct - 18 Nov - 18 Rockbank $425,500 $456,500 +0.9% Woodlea Oct - 18 Nov - 18 Armstrong Creek $415,000 $415,000 0% Watermark Oct - 18 Nov - 18

ESTATE NET # SOLD AVERAGE SOLD PRICE LOTS AVAILABLE 1 MT ATKINSON 31 $326,000 18 2 MINTA 30 $399,000 30 3 ATHERSTONE 22 $278,000 36 4 ARMSTRONG 26 $281,000 60 5 WOODLEA 16 $305,000 7 6 ASPEN ON CLYDE 15 $395,000 25 7 GRANDVIEW 15 $295,000 18 8 HARPLEY 15 $332,000 54 9 BROMPTON 12 $322,000 50 10 WINDERMERE 5 $317,000 31

New Releases in November Armstrong Creek Glenlee & Armstrong Casey North Minta Casey South Pavilion and Eliston Casey West Eastwood and Aqarevo Craigieburn Highlands Donnybrook/ Mickleham Olivine, Merrifield & Platform Epping Wollert Vearings Road, Lyndarum North & Elyssia Greenvale The Maples & True North Melton Eynesbury, Little Creek Officer/ Pakenham Timbertop Plumpton Sienna North, Sinclair Heights, Aldo, Aspire, Deanside Central & Attwell Point Cook Life & Upper Point Cook Rockbank Woodlea & Accolade Truganina Tarneit Albright, Orchard, Marigold, Mt Atkinson, Westbrook, Riverdale & Grandview Werribee/ Wyndham ValeHarpley, Mambourin, Manor Lakes, Windermere & Cornerstone

Ironwood 39-41 Huon Park Road The sales agent is RPM and the developer is Lennium Group. Cranbourne North The sales agent is RED23 and the developer is Lennium Group. They are priced Edgeleigh 1126 Leakes Road Tarneit below the average for this region, with a 350 sqm lot priced at $298,900, $40k (Mt Cottrell). lower than Elements and $45k lower than Westbrook. The Sinclair Heights Plumpton Developer is 4Qb and sales agent is Core – a 250 sqm lot is priced $4k above Westwood and $27k below Attwell. Aldo Plumpton and Eynesbury Eynesbury have both re-launched this month. Eynesbury estate has found a new selling agent in Resimax, replacing Oliver Hume. Catalina Point Cook 1 lot left to sell Alarah East Cranbourne West 3 lots left to sell Sienna Rise Fraser Rise Sold out

Clyde North Donnybrook Mickleham Tarneit Truganina • Aspen & St Germain accepting 5% • Botanical rebates $6-12k • Mt Atkinson reduced prices between $5- deposit • Trijena $10k for assorted lots 10k • Aspen & Meridian $3k landscaping • Cloverton $20k price reduction. • Habitat offering $10k off list price rebate • Platform are cutting lot sizes in half at its • Werribee Wyndham Vale newest estate in Donnybrook in the • Harpley match FHB 5% deposit with 5% Clyde South northern growth corridor. They are of the land purchase price • Clyde Spring decreased prices by $10- offering lots as small as 213 sqm and • The Glen has had further price 55k priced as low as $210,000. reductions of $10-20k • Allanvale has $20k discount from price • Gem reduced price by $10k list Epping Wollert • Lyall Park had price reductions $6-90k • Elyssia $3k referral Rockbank • Edgebrook price reductions of $25-45k • Lyndarum offering $2k referral program • Grandview further price reduction of $3k • Aurora is offering 5% deposit and will and $10k discount for selected lots Casey West match FHB 5% of value of land\\ • Plumpton • Alarah offering $10-40k off list price for • Epping Views offering $15k rebate • Aspire is offering 5% deposit remaining lots • Attwell $2k builder referral • Brompton contributing additional $10k Craigieburn • Bowery $5k builder referral for FHB who purchases H&L • Aston offering $5k deposit & $5k land • Harpley, Mambourin, Manor Lakes, • Eastwood offering a $15k gift card. rebate Windermere & Cornerstone Annabella St price reduced up to $44k Officer Pakenham • Grandvue offering $5k builder referral • Mt Pleasant $2k builder referral and $3k for fencing

• The West has 48% of the market (including Greater Geelong) for the month of November and 44% of the market for the Sep-Nov quarter. • Greater Geelong was top of the pops this month, with an average of six sales for November. Over three months (Sep-Oct), the average number of sales was eight. • The only region which saw a significant increase in net sales was Casey North, with the launch of Minta which has sold almost 60 lots since its launch in November. This increased net sales over this period from the previous three months by 100%. • Officer Pakenham had the largest drop in net sales of 57%, followed by Rockbank with a decrease of 56% AVERAGE PRICING 2 2 • In August Lyndarum had 400m lots priced at $337,000, by November priced at $357,000. 448m lots in August priced at $367,000 and in November priced between $389,000-$390,000. 2 • Officer/Pakenham had the largest price decrease with almost six percent for a 448m . Timbertop has continued to drop in price, with a 448m 2 lot in August priced at $415,000 and by November, reduced to $395,000. • The number of cancellations had continued to increase across all regions, however both Casey South and Casey North saw decreases. Werribee/Wyndham Vale had an increase of over 200%, with over 30 lots back on the market in November. • Most regions saw an increase in the availability of land, with Officer/ Pakenham seeing the largest increase, followed by Werribee/ Wyndham Vale. Donnybrook Mickleham had a decrease of fiver percent in available land. • All corridors had new releases for the month with the South East and North amassing six, and the West 20. 20 | Core Projects