Residential property market demand shows early signs of recovery in 2012

Transcription

1 Residential Property Market Overview Robert Mellor, Managing gdirector, BIS Shrapnel Pty Ltd October 2012 J3058 recent events Residential property market demand shows early signs of recovery in Strong pick-up in First Home Buyer demand last 12 months - Downturn in Upgrader/Downsizer demand ended, but has mostly remained flat through Modest recovery e in investor demand d over calendar Affordability at its best since around 2003/04 - However consumer confidence remains weak. - Prices have stabilised and modest growth in most cities over past six months Modest price growth expected in most cities over 2012/13 - Housing interest rates to remain attractive over next year - High levels of net overseas migration driving underlying demand for new housing - Continued strong growth in First Home Buyer demand and modest growth from upgraders and investors - Markets in Sydney, Perth, Brisbane and Darwin all face a significant undersupply of housing - These undersupplied markets expected to see price growth of between 3-6% over 2012/13 - Melbourne, Adelaide, Hobart, and Canberra to face weak market conditions, as each market has an oversupply 1

2 GDP growth forecasts (2009/2010 prices) Forecasts Year Ended June Private Consumption Private Investment Public Consumption Public Investment GNE Export Import GDP Source: ABS Data, BIS Shrapnel private investment growth forecasts (2009/2010 prices) Forecasts Year Ended June Total Dwellings Real Estate Transfer Residential and Property - Subtotal New Plant and Equipment New Non-Dwelling Construction New Business Investment - Subtotal New Private Investment - Subtotal Source: ABS Data, BIS Shrapnel 2

3 interest rates Source: ABS Data, BIS Shrapnel real median house price growth after 100 basis point cut to interest rates Source: Reserve Bank of Australia, Australia Bureau of Statistics, Real estate Institute of Australia 3

4 affordability mortgage repayments as a percentage of household income Source: ABS Data, BIS Shrapnel affordability mortgage repayments as a percentage of household income Source: ABS Data, BIS Shrapnel 4

5 trends in loans for new and established dwellings Loans for Owner Occupied Dwellings (% Change on Corresponding Quarter) New Dwellings Established Dwellings State Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Jun-11 Sep-11 Dec-11 Mar-12 June-12 New South Wales Victoria Queensland South Australia Western Australia Tasmania Northern Territory ACT A.C.T Australia Source: ABS Data annual growth in home loans Australia Source: ABS Data 5

6 first home buyer activity FHB Loans (% Change from Previous Year) % Change on Corresponding Quarter the Previous Year State 2009/ / /12 Sep-11 Dec-11 Mar-12 Jun-12 Jul-12* New South Wales Victoria Queensland South Australia Western Australia Tasmania Northern Territory A.C.T Australia Source: ABS Data * % Change on corresponding month the previous year upgrader activity Non-FHB Loans (% Change from Previous Year) % Change on Corresponding Quarter the Previous Year State 2009/ / /12 Sep-11 Dec-12 Mar-12 Jun-12 Jul-12* New South Wales Victoria Queensland South Australia Western Australia Tasmania Northern Territory A.C.T Australia Source: ABS Data * % Change on corresponding month the previous year 6

7 investor activity Value of Investment Loans (% Change from Previous Year) % Change on Corresponding Quarter the Previous Year State 2009/ / /12 Sep-11 Dec-11 Mar-12 Jun-12 Jul-12* New South Wales Victoria Queensland South Australia Western Australia Tasmania Northern Territory A.C.T Australia Source: ABS Data * % Change on corresponding month the previous year 12 month moving average for new established dwelling loans vs. annual price growth for Australia Source: ABS Data, Real Estate Institute of Australia & BIS Shrapnel 7

8 net overseas migration - Australia Source: ABS Data net overseas migration by state Source: ABS Data and BIS Shrapnel 8

9 net interstate migration Source: ABS Data and BIS Shrapnel net population increase Source: ABS Data and BIS Shrapnel 9

10 underlying demand, supply and dwelling deficiency Ave Ann Underlying Demand ( 000s) 2012/13 to 2014/15 Dwellings Commencements Annual % ( 000s) Deficiency of Stock (est.) ( 000s) as at June State 2011/12 Annual % change New South Wales Victoria Queensland South Australia Western Australia Tasmania Northern Territory ACT A.C.T Australia Source: ABS Data & BIS Shrapnel number of dwellings commenced - Australia Source: ABS Data and BIS Shrapnel 10

11 residential vacancy rates Residential Rental Vacancy Rates (%) At June Sydney Melbourne Brisbane Adelaide Perth Hobart Canberra Darwin Source: REIA rental growth Annual growth in ABS rental index (%) To June Sydney Melbourne Brisbane Adelaide Perth Hobart Canberra Darwin Source: REIA 11

12 New South Wales residential building & property cycle Source: ABS Data, Real Estate Institute of Australia and BIS Shrapnel Victoria residential building & property cycle Source: ABS Data, Real Estate Institute of Australia and BIS Shrapnel 12

13 Queensland residential building & property cycle (Brisbane) Source: ABS Data, Real Estate Institute of Australia and BIS Shrapnel Queensland residential building & property cycle (Gold Coast) Source: ABS Data, Real Estate Institute of Australia and BIS Shrapnel 13

14 Queensland residential building & property cycle (Sunshine Coast) Source: ABS Data, Real Estate Institute of Australia and BIS Shrapnel South Australia residential building & property cycle Source: ABS Data, Real Estate Institute of Australia and BIS Shrapnel 14

15 Western Australia residential building & property cycle Source: ABS Data, Real Estate Institute of Australia and BIS Shrapnel Tasmania residential building & property cycle Source: ABS Data, Real Estate Institute of Australia and BIS Shrapnel 15

16 Northern Territory residential building & property cycle Source: ABS Data, Real Estate Institute of Australia and BIS Shrapnel Australian Capital Territory residential building & property cycle Source: ABS Data, Real Estate Institute of Australia and BIS Shrapnel 16

17 comparison between actual and three year forecast - Australia comparison between actual and three year forecast - Sydney Source: Real Estate Institute of Australia, BIS Shrapnel Forecast 17

18 comparison between actual and three year forecast - Melbourne Source: Real Estate Institute of Australia, BIS Shrapnel Forecast comparison between actual and three year forecast - Brisbane Source: Real Estate Institute of Australia, BIS Shrapnel Forecast 18

19 comparison between actual and three year forecast - Adelaide Source: Real Estate Institute of Australia, BIS Shrapnel Forecast comparison between actual and three year forecast - Perth Source: ABS Data 19

20 summary Economic growth to remain solid underwritten by mining, but non-mining sectors to strengthen over 2013/14 Housing interest rates to remain favourable until 2014, with risk of high rates curtailing the upturn in 2015 Underlying demand for new dwellings will remain well above dwelling completions over the next two years in NSW, Queensland, W.A. and N.T. and this will put upward pressure on house prices in these states. Strong employment and income growth to help drive house price growth critical ingredient is rising consumer confidence Oversupplied markets will lead to Melbourne, Adelaide, Hobart and Canberra experiencing minimal price growth out to 2015 Long term residential property price growth is expected to be relatively subdued compared to last 30 years summary Solid forecast price growth ( ) - Sydney 17% - Melbourne 4% - Brisbane 19% - Adelaide 6% - Perth 22% - Darwin 14% - Hobart 1% - Canberra 1% DISCLAIMER: The information contained in this presentation has been obtained from BIS Shrapnel Pty Limited and does not necessarily represent the views or opinions of QBE Lenders Mortgage Insurance Limited (QBE LMI). This publication is provided for informational purposes only and is not intended to constitute legal, financial or other professional advice and has not been provided with regard to the investment objectives or circumstances of any particular reader. While based on information believed to be reliable, no guarantee is given that it is accurate or complete and no warranties are made by QBE LMI as to the accuracy, completeness or usefulness of any of the information in this publication. The opinions, forecasts, assumptions, estimates, derived valuations and target price(s) (if any) contained in this material are as of the date indicated and are subject to change at any time without prior notice. The information referred to may not be suitable for specific investment objectives, financial situation or individual needs of recipients and should not be relied upon in substitution for the exercise of independent judgment. Recipients should obtain their own appropriate professional advice. Neither QBE LMI nor other persons shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in this material. QBE Lenders Mortgage Insurance Limited ABN