outlook National Land Survey What does the market look like? - - PowerPoint PPT Presentation

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outlook national land survey what does the market look
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outlook National Land Survey What does the market look like? - - PowerPoint PPT Presentation

Mar 11, 2024 305 likes •732 views

outlook National Land Survey What does the market look like? Sydney In a tight spot but hanging on Melbourne Out of control, but will correct Perth pushing on SEQ steady effort National Setting National lot sales per month 3,836 pcm

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SLIDE 1
  • utlook
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SLIDE 2 National Land Survey
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SLIDE 3

What does the market look like?

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SLIDE 4

Sydney In a tight spot but hanging on

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SLIDE 5

Melbourne Out of control, but will correct

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SLIDE 6

Perth …pushing on

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SLIDE 7

SEQ …steady effort

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SLIDE 8

National Setting

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SLIDE 9

National lot sales per month

3,836 pcm

Current result

17% down

On a year prior

3,448 pcm

Long running average 1000 2000 3000 4000 5000 6000 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Q1-15 Q1-16 Q1-17 Q1-18 Sales per Month
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SLIDE 10

National lot sales per month by Market

500 1000 1500 2000 2500 Jun-08 Jun-10 Jun-12 Jun-14 Q2-16 Q2-18 Sales per Month 500 1000 1500 2000 2500 Jun-08 Jun-10 Jun-12 Jun-14 Q2-16 Q2-18 Sales per Month

Mel SEQ Syd Adl Pth

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SLIDE 11

National lot prices - Median

Mel SEQ Syd Adl Pth $342k $272k $425k $185k $220k +18%

  • 1%

1% 1% 0%

Annual Price

$100 $150 $200 $250 $300 $350 $400 $450 $500 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Q2-15 Q2-16 Q2-17 Q2-18 Median Lot Price ($,000)
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SLIDE 12

Melbourne Greenfield

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SLIDE 13

Melbourne Greenfield market is not facing a demand issue, it is facing a pricing issue driven by the housing market and frustrated by a lack

  • f active supply

Sales will be impacted by these pricing issues

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SLIDE 14

Demand

  • 5,000
10,000 15,000 20,000 25,000 30,000 35,000 Q2-2008 Q2-2009 Q2-2010 Q2-2011 Q2-2012 Q2-2013 Q2-2014 Q2-2015 Q2-2016 Q2-2017 Q2-2018 Q2-2019 Q2-2020 Persons per Quarter NOM Population Growth - Actual & Forecast
  • 1,000
  • 1,000
2,000 3,000 4,000 5,000 6,000 Q2-2008 Q2-2009 Q2-2010 Q2-2011 Q2-2012 Q2-2013 Q2-2014 Q2-2015 Q2-2016 Q2-2017 Q2-2018 Q2-2019 Q2-2020 Persons per Quarter NIM Population Growth - Actual & Forecast

NoM NiM

Conservative outlook taken for the forecast

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SLIDE 15

Melbourne New Land Sales & Demand

500 1000 1500 2000 2500 Q1-08 Q1-09 Q1-10 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 Q1-16 Q1-17 Q1-18 Sales per Month

1,440 pcm

Forecast – NOM Change 1,473 pcm Actual Q3 18 Underlying demand is based on forecast population inflows. Forecast relates to 2018-2020 Strictly for internal use only: Commercial in confidence: All Rights Research4 October 2018 Update 1,200 lots per month

1,700 pcm

Forecast –No change
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SLIDE 16 Strictly for internal use only: Commercial in confidence: All Rights Research4

Sale Volumes will be Impacted by

Falling house prices Investor Cooling Change to Lending Criteria Developer delivery pull back High land prices Lack of Development Capacity

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SLIDE 17 $100 $150 $200 $250 $300 $350 $400 Q1-08 Q1-09 Q1-10 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 Q1-16 Q1-17 Q1-18 Median Lot Price
  • 10%
  • 5%
0% 5% 10% 15% 20% 25% 30% 35% Q1-08 Q1-10 Q1-12 Q1-14 Q1-16 Q1-18 Annual Price Chnage

Melbourne New Land Prices & Change

$342K 18%PA

Strictly for internal use only: Commercial in confidence: All Rights Research4 October 2018 Update $335,000
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SLIDE 18 1000 2000 3000 4000 5000 6000 Q1-08 Q1-09 Q1-10 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 Q1-16 Q1-17 Q1-18 Stock of Lots ready for Sale 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Q1-08 Q1-10 Q1-12 Q1-14 Q1-16 Q1-18 Trading Months [3 month mav sales]

Melbourne Stock Level & Trading Months

2,300 1.6 month

Ideal Level

Downward pressure on prices Strictly for internal use only: Commercial in confidence: All Rights Research4
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SLIDE 19 1000 2000 3000 4000 5000 6000 7000 Q1-08 Q1-09 Q1-10 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 Q1-16 Q1-17 Q1-18 New Releases - Quarter 50% 70% 90% 110% 130% 150% Q1-08 Q1-10 Q1-12 Q1-14 Q1-16 Q1-18 Sales to Production ratio

Melbourne New Releases & Ratio

5,200 85%

1:1 Even

Sales exceeding New Releases Sales below New Releases Strictly for internal use only: Commercial in confidence: All Rights Research4 October 2018 Update 1,524 released
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SLIDE 20

Melbourne – Active Estates

50 70 90 110 130 150 170 Q1-08 Q1-09 Q1-10 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 Q1-16 Q1-17 Q1-18 Projects Selling Each Quarter 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Q1-08 Q1-10 Q1-12 Q1-14 Q1-16 Q1-18 Average Project Sale Rate Average net sale rate per month for estates trading each quarter

130 11.5

Strictly for internal use only: Commercial in confidence: All Rights Research4
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SLIDE 21

Melbourne Cancellations

50 100 150 200 250 Q1-08 Q1-09 Q1-10 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 Q1-16 Q1-17 Q1-18 Lots Cancelled per month 0% 5% 10% 15% 20% 25% 30% 35% Q1-08 Q1-10 Q1-12 Q1-14 Q1-16 Q1-18 Cancellation Rate

65pcm 4.5%

Threshold

Above 15%, indicates weakness in expressed demand Strictly for internal use only: Commercial in confidence: All Rights Research4
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SLIDE 22

Is the Land Market following? Are land price “Fair Value”? Is there enough Development Capacity?

1 2 3

3 Card Assessment Game

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SLIDE 23

Land Market- Leading or Following

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House & Land Price Index

50 100 150 200 250 Q2-2008 Q2-2009 Q2-2010 Q2-2011 Q2-2012 Q2-2013 Q2-2014 Q2-2015 Q2-2016 Q2-2017 Q2-2018 Index

Established House Price Index

183

New Land Price Index

214

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SLIDE 25

House & Land Price Index

50 100 150 200 250 Index 50 100 150 200 250 Index 50 100 150 200 250 Index 50 100 150 200 250 Index

Leading Follow Follow Follow

Melbourne Sydney SEQ Perth

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SLIDE 26

Fair Vale – Over or Under fair Value

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SLIDE 27 20% 25% 30% 35% 40% 45% 50% Q2-2008 Q4-2008 Q2-2009 Q4-2009 Q2-2010 Q4-2010 Q2-2011 Q4-2011 Q2-2012 Q4-2012 Q2-2013 Q4-2013 Q2-2014 Q4-2014 Q2-2015 Q4-2015 Q2-2016 Q4-2016 Q2-2017 Q4-2017 Q2-2018 Q4-2018 Q2-2019 Q4-2019 Q2-2020 Land to House Ratio Median Land Price : Median metro House Price Percent Median house price as per ABS. Land prices as per R4

Fair Value Assessment

Melbourne land prices are above the long running benchmark

40%

46%

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SLIDE 28 20% 25% 30% 35% 40% 45% 50% 55% 60% Q2-2008 Q2-2011 Q2-2014 Q2-2017 Q2-2020 Land to House Ratio 20% 25% 30% 35% 40% 45% 50% 55% 60% Q2-2008 Q2-2011 Q2-2014 Q2-2017 Q2-2020 Land to House Ratio

Fair Value Assessment

44% +$11,000 20% 25% 30% 35% 40% 45% 50% 55% 60% Q2-2008 Q2-2011 Q2-2014 Q2-2017 Q2-2020 Land to House Ratio 40% +$48,000 20% 25% 30% 35% 40% 45% 50% 55% 60% Q2-2008 Q2-2011 Q2-2014 Q2-2017 Q2-2020 Land to House Ratio 54%
  • $13,000
46%
  • $10,000

Melbourne Sydney SEQ Perth

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SLIDE 29

Greenfield Development Capacity

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SLIDE 30

What is Greenfield Development Capacity

?

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SLIDE 31 Estate

Estate Estate Estate

Estate Estate Estate

The full production capacity of active land estates within a market

Estate

Estate

Estate Estate Estate Estate
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SLIDE 32

How much Development capacity is needed

?

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SLIDE 33

How much Development capacity is needed?

2:1

Capacity needs to double demand

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SLIDE 34 0.0 1.0 2.0 3.0 4.0 5.0 Q2-2008 Q2-2009 Q2-2010 Q2-2011 Q2-2012 Q2-2013 Q2-2014 Q2-2015 Q2-2016 Q2-2017 Q2-2018 Q2-2019 Q2-2020 Capacity : Demand

Melbourne Development Capacity & Price

2:1 Ratio

Current Ratio

1.4 : 1

Melbourne Greenfield Development to Demand ratio
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SLIDE 35 0.0 1.0 2.0 3.0 4.0 5.0 Q2-2008 Q2-2009 Q2-2010 Q2-2011 Q2-2012 Q2-2013 Q2-2014 Q2-2015 Q2-2016 Q2-2017 Q2-2018 Q2-2019 Q2-2020 Capacity : Demand

Melbourne Development Capacity

2:1 Ratio

ABOVE 2:1

High Levels of industry competition. Downward pressure on land prices

BELOW 2:1

Low Levels of industry competition. Upward pressure on land prices
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SLIDE 36
  • 10%
0% 10% 20% 30% 40% 0.0 1.0 2.0 3.0 4.0 5.0 Q2-2008 Q2-2009 Q2-2010 Q2-2011 Q2-2012 Q2-2013 Q2-2014 Q2-2015 Q2-2016 Q2-2017 Q2-2018 Q2-2019 Q2-2020 Annual Land Price Change Capacity : Demand

PRICE IMPACT

Rapid price growth when ratio below 2:1

Melbourne Development Capacity & Price

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SLIDE 37

Active Supply Feeding Capacity

107431 82501 61508 45755 35529 28314 20,000 40,000 60,000 80,000 100,000 120,000 Now 2019(f) 2020(f) 2021(f) 2022(f) 2023(f) Supply in Lots 133 106 72 42 27 17 20 40 60 80 100 120 140 Now 2019(f) 2020(f) 2021(f) 2022(f) 2023(f) Estates with Supply Rundown by capacity Rundown by capacity
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SLIDE 38

Net Effect by close of 2019

1:1

ratio

Without any new estates, the Development Capacity will be 1:1

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SLIDE 39

Net Effect by close of 2019

70

New estates required

To get the Development Capacity back to 2:1 there is required 70 new standard sized trading estates. Over the next five years the market requires on average 28 per year.

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SLIDE 40 Colin Keane – Director of Research4 colin.keane@researchfour.com Keep updated

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Colin Keane is Director of Research4 [www.researchfour.com] Research4 conduct detailed market research pertaining to Australia's Greenfield Land Markets. Established in 2005, Research4's national survey is Australia’s longest running and most detailed audit of the nation's Greenfield land estates. Colin's main focus is to better understand every aspect of the Greenfield market. The survey to date has monitored in excess of 2,000 land estates delivered by 850 land developers across 44 new land markets. The research program monitors 50% of Australia's new housing sector on a full time basis. Research4 is founded upon a proprietary database created through extensive, ongoing field and remote surveying of active residential land projects [R4 CoreDatabase]. Research4's survey outputs are used by industry, government and financial sectors. Research4 : R4 Insights 2017 www.researchfour.com research@researchfour.com
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SLIDE 41

Disclaimer

These slides are not for commercial use or redistribution. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. RESEARCH 4 PTY LTD have indicated within this presentation the sources of the information provided. RESEARCH 4 PTY LTD has not sought to independently verify those sources unless otherwise noted within the presentation. No reliance should be placed on additional oral remarks provided during the presentation, unless these are confirmed in writing by RESEARCH 4 PTY LTD. RESEARCH 4 PTY LTD is under no obligation in any circumstance to update this presentation, in either oral or written form, for events occurring after the presentation has been issued in final form. The findings in this presentation have been formed on the above basis. Forecasts are based on a number of assumptions and estimates and are subject to contingencies and uncertainties. Forecasts should not be regarded as a representation or warranty by or on behalf of RESEARCH 4 PTY LTD or any other person that such forecasts will be met. Forecasts constitute judgment and are subject to change without notice, as are statements about market trends, which are based on current market conditions. Neither RESEARCH 4 PTY LTD nor any member or employee of RESEARCH 4 PTY LTD undertakes responsibility arising in any way from reliance placed by a third party on this presentation. Any reliance placed is that party’s sole responsibility. The presentation (and the accompanying slide pack) is provided solely for the benefit of the conference attendees and is not to be copied, quoted or referred to in whole or in part without RESEARCH 4 PTY LTD’s prior written consent. RESEARCH 4 PTY LTD accepts no responsibility to anyone other than the conference attendees for the information contained in this presentation. Research4 : R4 Insights 2017 www.researchfour.com research@researchfour.com