UDIA WA PROPERTY MARKET STATISTICS

UDIA WA PROPERTY MARKET STATISTICS AUGUST 217 1

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IN THIS ISSUE KEY TRENDS 4 INDUSTRY UPDATE 5 ECONOMY 6 RESIDENTIAL LAND DEVELOPMENT 7 RESIDENTIAL PROPERTY SETTLEMENTS 8 RESIDENTIAL PROPERTY MARKET 9 RESIDENTIAL CONSTRUCTION SECTOR 1 3

KEY TRENDS ECONOMY Current Figure M/Q Change 3 M/Q Rolling Av. YOY Change Official Cash Rate Target (RBA) 1.5% (August) % (M) 1.5% (M).% Discounted Variable Mortgage Rate (RBA) 4.45% (Aug) bps (M) 4.47% (M) bps Estimated Resident Population - WA 2,567,788m (Dec).1% (Q) 2,563,947m (Q).7% Unemployment Rate - WA (Seasonally Adj.) 5.3 (Jun) 8 bps (M) 5.5 (M) -26 bps Retail Turnover - WA (Original) $2.69b (Apr) -3.7% (M) $2.67b (M) -.7% Consumer Price Index - Greater Perth 19. (Jun).% (Q) 19. (Q).7% Wage Price Index - WA 127. (Jun).3% (Q) 126.6 (Q) 1.4% RESIDENTIAL LAND DEVELOPMENT SECTOR Current Figure M/Q Change 3 M/Q Rolling Av. YOY Change Lot Sales (UDIA Land Snapshot ) 396 (Aug 217) 27.7% (M) 367.7 (M) 16.5% RESIDENTIAL CONSTRUCTION SECTOR Current Figure M/Q Change 3 M/Q Rolling Av. YOY Change Dwelling Approvals - WA (Original) 1,574 (Jul) -14.3% (M) 1,691 (M) -22.8% Private Sector House Approvals - WA (Original) 1,228 (Jul) 5.6% (M) 1,27 (M) -3.2% New Dwelling Loans Owner-Occupation - WA (Original) 5,946 (Jun) -5.9% (M) 5,713 (M) -9.% Dwelling Construction Starts - WA (Original) 4,86 (Mar) 1.9% (Q) 5,43 (Q) -1.5% House Approvals - Greater Perth (Original) 1,27 (Jul) 1.3% (M),993 (M) -1.9% Multi-Unit Approvals - Greater Perth (Original) 299 (Jul) -51.9% (M) 438 (M) -55.7% RESIDENTIAL PROPERTY MARKET Current Figure M/Q Change 3 M/Q Rolling Av. YOY Change Median House Price - Perth (Landgate/REIWA) $58, (Jun) -1.3% (Q) $516, (Q) -5.% House Sales - Perth (Landgate/REIWA) 5,87 (Jun) -6.1% (Q) 5,87 (Q) -2.9% Unit Sales - Perth (Landgate/REIWA) 1,31 (Jun) -9.3% (Q) 1,325 (Q) 6.2% House and Unit Listings - Perth (REIWA) 14,38 (Jun) -5.4% (Q) 14,251 (Q) -.8% Dwelling Loans Owner-Occupation - WA (Original) 4,249 (Jun) -5.3% (M) 4,86 (M) 1.7% Established Dwelling Loans Owner-Occupation - WA (Original) 2,79 (Jun) -8.1% (M) 2,771 (M) -1.3% FHOG Applications - WA (Original) 886 (Jul) 2.1% (M) 88 (M) 57.9% Investment Housing Loans - WA (Original) $743.5m (May) 29.2% (M) $696.2m (M) -4.6% REIWA Average Selling Days - Perth 68 (Jun) -1.4% (Q) 66.7 (Q) 6.3% Residential Rental Market Current Figure M/Q Change 3 M/Q Rolling Av. YOY Change REIWA Median Rent - Perth 36 (Jun) -2.7% (Q) 37 (Q) -7.7% REIWA Vacancy Rate - Perth 7.3% (Jun) 8 bps (Q) 6.7% (Q) 13 bps 4

UDIA WA INDUSTRY UPDATE Early September saw the much anticipated release of the first Budget for the McGowan Government, which set out the objective of getting the State back on track. In his address, the Treasurer, Ben Wyatt gave a direct assurance that the property market would be spared from the budget repair measures necessary to return the budget to surplus. CHRIS GREEN Director of Policy & Research UDIA WA However, the temptation proved too hard to resist and as part of the package of revenue raising measures, the Treasurer announced the introduction of a Foreign Property Buyers Surcharge. The 4% surcharge will apply to residential purchases of less than ten properties by overseas individuals, corporations and trusts. In addition, the Budget papers also included the identification of funding from land sales and value capture ($34.9m in 219/2 and $69.9m in 22/21) to assist with the delivery of Metronet. It is difficult to predict precisely how these two measures will impact the property market, particularly given the absence of details concerning funding generated from land sales and value capture. Nevertheless, the Institute considers that the Foreign Property Buyers Surcharge is likely to have a more significant impact on demand for property in WA than the government appears to have anticipated. As well as harming the market, there are concerns that the disincentive may potentially result in reduced transfer duty revenues for Government. The other significant budget announcement was the introduction of a temporary progressive Payroll Tax Scale for large companies, with contributions increasing for those employers with a payroll exceeding $1m. Amongst the positive Budget news, alongside the infrastructure investment in Metronet, provision was made to retain the $1, First Home Owners Grant for new homes and funding was secured for a variety of road infrastructure projects including $237m for the construction of the Armadale Road Bridge. This infrastructure provision is likely to assist local property demand in those sub-regional areas of Perth benefiting from the infrastructure investment. The Budget predicts that the WA economy will grow by 3% in 217-18, with almost 2, jobs expected to be created. These forecasts appear well founded and confidence in the State s economy is replicated by the indicators contained in this edition of Urban Intelligence. The WA unemployment rate remains reasonably stable at 5.3% and 14 basis points lower than the rate for the same time last year. Whilst the number of employed persons fell marginally (.3%) to 1.368 million, the total remains steady holding strong recent increases in employment numbers. The signs of improvement in the wider economy are also reflected with encouraging signs within the property market. Total lots sales increased this month up 27.7% of the previous month and 16.5% higher than the same time last year. The median lot price also rose 4.3% this month and is now just 2.5% lower than the long-term average lot price. This is even more encouraging when placed in the context of the consistent fall in the average lot size. Other positive signs include the continuation of buoyant figures amongst First Home Owner Grant Applications, although it is also important to flag that the value of loan size for first time buyers fell slightly by 1.8% to stand at $37,4. For non-first time buyers, the average loan size remained largely steady, falling back just.6% from previous increases to stand some 4.6% higher than the same time last year. Even accounting for the monthly fluctuations, there appears to be enough consistency in the indicators to suggest that the green shoots of recovery within the property market are emerging. UDIA will be monitoring these indicators alongside the measures announced by the Treasurer in the State Budget closely to deliver an advocacy that supports the Budget s objective of getting the State back on track. 5

ECONOMY Key Points of Interest Western Australia s unemployment rate for July remained steady on a monthly basis at 5.3% (in original terms. 5.4% seasonally adjusted) and fell 14 basis points (bps) from the same time last year, 2bps lower than the national rate of 5.5%. The number of employed persons in WA fell.3% from June to 1.368 million, following two months of higher figures, 1.9% higher than in July 216. The WA state participation rate also fell 2 basis points over the month to 67.8%, 1bps lower than the same time last year and 2.82 percentage points higher than the national rate of 65%. In August 3-year fixed owner-occupier mortgage rates remained steady on a monthly basis, at 4.15% for the third month in a row and 5bps higher than the same time last year. Discounted variable rates also remained at 4.45% for the second month in a row and the same as in August 216. Standard variable rates were unchanged from July at 5.2%, 5bps lower than the same time last year. Home Loan Rates (% p.a.) Employed Persons (,) 14 8 Labour Market, WA (ABS) 135 7 13 6 125 12 5 115 4 11 3 15 1 2 Jul-6 Jul-7 Jul-8 Jul-9 Jul-1 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Employed Persons (Original) Unemployment Rate (Seas. Adj.) Unemployment Rate (Original) 9.5 8.5 7.5 6.5 5.5 Mortgage Rates, Australia Unemployment Rate (%) Source: ABS 622., T8 Standard Variable Discounted Variable Three Year Fixed 4.5 Change in Population (Quarterley) 3 25 2 15 Population Change, WA (ABS).4.35.3.2 1.15 5.1.5 Dec-6 Dec-7 Dec-8 Dec-9 Dec-1 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16.25 Population Growth (%) Year-on-year change in Index (calculated quarterly) 3.5 Aug-7 Aug-8 Aug-9 Aug-1 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Source: RBA, F5 Consumer Price Index (ABS).7.5.3.1 Jun-7 Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 -.1-5 Natural Increase Net Overseas Migration Net Interstate Migration Annual Growth -.3 CPI - Perth (Housing) YOY Change CPI - Perth (All Groups) YOY Change CPI - Australia (Housing) YOY Change CPI - Australia (All Groups) YOY Change Source: ABS 311., T2 & 4 (Original Data) Source: ABS 641, T 1, 5 & 7. US Dollar, European Euro & UK Pound Sterling (monthly average) 1.5.95.85.75.65.55 Australian Dollar Exchange Rate United States Dollar European Euro UK Pound Sterling Chinese Renminbi 7.4 6.9 6.4 5.9 5.4 4.9 4.4 3.9 Chinese Renminbi (monthly average) Retail Turnowver Growth (p.a).13 Retail Turnover (ABS).11.9.7.5.3.1 -.1 Jun-7 Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17.45 3.4 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Source: RBA, F11 -.3 YoY WA (Original) YoY Australia (Original) YoY WA (Seas. Adj.) YoY Australia (Seas. Adj.) Source: ABS 851, T3 6

RESIDENTIAL LAND DEVELOPMENT SECTOR Key Points of Interest In UDIA s Land Snapshot survey results for August, total lot sales increased 27.7% over the month and also rose 16.5% from the same time last year. Of this total: combined sales below $2, increased 23.9% month-on-month (MoM) and 36.2% year-on-year (YoY); combined sales between $2,-$28, rose 13.5% MoM and remained steady from the same time last year; and combined sales above $28, increased 77.3% MoM and 6.8% YoY. The median lot price rose 4.3% over the month to $218,131, 3.6% down from the same time last year and 2.5% lower than the long-term average of $223,76. Weekly category lot sales UDIA Land Snapshot Survey - Lot Sales 8 2 18 7 16 6 14 5 12 4 1 8 3 6 2 4 1 2 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Under $2, Rolling 12 Month Average $2, - $28, Rolling 12 Month Average $28, plus Rolling 12 Month Average Total Sales Rolling 12 Month Average Source: UDIA Land Snapshot Survey Total weekly lot sales Monthly vacant land settlements by metropolitan corridor for May, 217 (Landgate) Monthly Vacant Land Settlements by Corridor May-17 Vacant Land Regions Settlements Median Price Median Lot Size North-East Metro 7 $ 222, 36 North-West Metro 66 $ 294, 385 South-East Metro 72 $ 245, 345 South-West Metro 9 $ 257, 397 Peel 43 $ 215, 547 Top five suburbs for vacant land settlements for the three months to 3 June, 217 (Landgate) TOP SUBURBS FOR VACANT LAND SETTLEMENTS Three months to 3 June Settlements Median Price Median Size 1 BALDIVIS 52 $197, 444.5 2 AVELEY 47 $198, 3. 3 PIARA WATERS 43 $26, 312. 4 ALKIMOS 33 $187, 36. 5 WELLARD 33 $195, 45. Median Lot Size/month (sqm) 44 42 4 38 36 34 32 3 Metropolitan Corridor Median Lot Sizes North West North East South East South West Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Source: Landgate/UDIA Note: Settlement figures on this page are based on Landgate data available at the time of publication and may not represent all settlements during the period. 7

RESIDENTIAL PROPERTY SETTLEMENTS 3 Median Price/Settlements Greater Perth $58, $6, Median Price Detached and Non-Detached Dwellings: Greater Perth 25 2 15 $56, $54, $52, $5, $5, $4, $3, 1 $48, $2, 5 $46, $1, $44, Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Median Price Detached Houses Settlements Detached Houses Source: UDIA/Landgate $- Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Median Price Detached Houses Median Price Non-Detached Dwellings Source: UDIA/Landgate $28, $26, $24, $22, $2, $18, $16, Jun-15 Vacant Land Settlements, Median Price: Greater Perth and FHOG Applications Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Median Price Vacant Land Settlement Vacant Land First Home Buyer Grant Applications - new build Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 2 18 16 14 12 1 8 6 4 2 Source: Landgate/UDIA/Treasury (WA) Regional Dwelling Settlements June 217 Non-Detached Housing Wheatbelt Non-Detached Housing South West Non-Detached Housing Pilbara Non-Detached Housing Mid West Non-Detached Housing Great Southern Non-Detached Housing Goldfields Esperance Non-Detached Housing Gascoyne Detached Housing Wheatbelt Detached Housing South West Detached Housing Pilbara Detached Housing Mid West Detached Housing Great Southern Detached Housing Goldfields Esperance Detached Housing Gascoyne 2 4 6 8 1 12 Source: UDIA/Landgate Vacant Land Wheatbelt Vacant Land South West Vacant Land Pilbara Vacant Land Mid West Vacant Land Great Southern Vacant Land Goldfields Esperance Vacant Land Gascoyne Regional Land Settlements June 217 Source: UDIA/Landgate 5 1 15 2 25 3 TOP SUBURBS FOR MEDIUM DENSITY SETTLEMENTS Three months to 3 June Settlements Median Price Median Size 1 SCARBOROUGH 67 $535, 144. 2 INNALOO 66 $456, 197. 3 EAST PERTH 63 $434,75 121. 4 NOLLAMARA 62 $35, 214. 5 MAYLANDS 56 $37,5 111. TOP SUBURBS FOR DETACHED HOUSING SETTLEMENTS Three months to 3 June Settlements Median Price Median Size 1 CANNING VALE 8 $561, 599. 2 THORNLIE 64 $38, 74. 3 ELLENBROOK 62 $395, 56. 4 BALDIVIS 6 $415, 581.5 5 HALLS HEAD 55 $413, 722. Source: Landgate/UDIA Top suburbs for detached housing and medium density settlements over the three months to June 217. Note: Settlement figures on this page are based on Landgate data available at the time of publication and may not represent all settlements during the period. 8

RESIDENTIAL PROPERTY MARKET Key Points of Interest New owner-occupier finance commitments for WA in June fell 5.9% to 5,946, 9.% lower than the same time last year, following a six-month peak in May. Within this total: commitments for the construction of dwellings increased.7% month-on-month (MoM) and 8.9% year-on-year (YoY) to 1,192; commitments for the purchase of new dwellings rose.4% MoM and 3.9% YoY to 267; and commitments for the purchase of established dwellings fell 7.8% MoM and 13.4% YoY to 4,487. The number of WA dwellings financed by first home buyers (FHB) in June decreased 1.3% MoM and increased 13.8% YoY to 1,486, following a 22 month peak in May. Over the past two months figures finance figures have picked up for first home buyers, impacted by the finish of the first home owners grant boost, although it remains to be seen whether this is demand being pulled forward from the last half of the year. For non-fhb the number of dwellings financed decreased 7.3% MoM and 14.7% YoY to 4,46, following a six-month peak in May. The average loan size for FHB fell 1.8% MoM and 2.1% YoY to $37,4; with the non-fhb average loan size also down.6% MoM to $346,8, 4.6% higher than the same time last year. Owner Occupier Loan Commitments (monthly) Average Home Loan Amount ($thousands) Owner Occupier Housing Finance, WA (ABS) 12 Construction of dwellings (WA) Purchase of new dwellings (WA) 1 Refinancing of established dwellings (WA) Purchase of established dwellings (WA) Total housing finance commitments (WA) 8 6 4 2 Jun-7 Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 4 35 3 Dwelling Finance, WA (ABS) Source: ABS 569., T1a (Original Data) 8 7 6 25 5 2 4 15 3 1 2 5 1 Jun-7 Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 FHB: Average Loan Size Non-FHB: Average Loan Size FHB: Dwellings Financed Non-FHB: Dwellings Financed Home Loan Commitments Source: ABS 569.,T9b (Original Data) WA Dwelling Finance ($m/month) 165 145 125 15 85 Dwelling Finance for Investment Housing (ABS) WA Dwelling Finance for Investment Housing WA Rolling 3 month average AU Dwelling Finance for Investment Housing AU Rolling 3 month average 16.5 14.5 AU Dwelling Finance ($m/month) 12.5 1.5 8.45 6.45 4.45 Median Price (quarterly) 6 5 4 3 2 1 Perth Metropolitan Quarterly Update 1 9 8 7 6 5 4 3 2 Dwelling/Land Sales (Quarterly) 65 2.45 1 45.45 Jun-7 Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Houses sold Units Sold Land Sold Sep-16 Dec-16 Mar-17 Jun-17 Source: ABS 5671., T15 & 23 (Original Data) Median House Price Median Unit Price Median Land Price Source: REIWA 6 Perth Metropolitan Rent (REIWA) 1% 2 Residential Property Listings, Perth Metro (REIWA) 5 18 Median House Rent (Quarterly) 4 3 2 5% % Quarterly Variance & Vacancy Rate (%) House and Unit Listings (Quarterly) 16 14 12 1 8 6 4 1 2 Quarterly variance - Median House Rent Vacancy rate Median House Rent -5% Jun-7 Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Source: REIWA Source: REIWA 9

RESIDENTIAL CONSTRUCTION SECTOR Key Points of Interest In July, WA building approvals for houses increased 3.3% month-on-month to 1,254, 7.6% lower than at the same time last year; while building approvals for houses in Greater Perth increased 1.3% over the month to 1,27, 1.9% down from July 216. WA Building approvals for dwellings (excluding houses) fell 48.6% MoM to 32, following a 52.7% increase in June, a 24.9% YoY. For dwellings (excluding houses) in Greater Perth, approvals fell 51.9% MoM and 26.2% YoY to 299, following a 57.6% spike in June. First Home Owner Grant applications for new dwellings for July continued a three-month period of buoyant figures, increasing another 1.3% to 878 following a 46.9% increase in May (811) and 6.9% rise in June (867). However, the majority of these lifts have yet to trickle down to numbers of grants paid for new dwellings, with figures in this category remaining relatively stable since a 27.8% increase in May (63), with June (64) falling 4.1% and July (627) regaining ground with a 3.8% increase. The total value of WA residential building jobs for July fell 18.1% MoM to $477.3 million, 28% lower than the same month in 216. This follows a six-month peak in May and is 5.4% below the 12 month average. Included in this total: the value of building jobs for new construction fell 18.3% MoM and 29.5% YoY to $437.6 million, 4.2% below the 12 month average; while the value of building jobs for alterations and additions (including conversions) also fell 16.% MoM and 6.1% YoY to $39.7 million, 13.9% below the 12 month average. Building Approvals (dwellings/month) 1,5 1, Residential Construction (dwellings per quarter) 5 3 25 2 15 1 Jul-7 Jul-8 Jul-9 Jul-1 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 1 9 8 7 6 5 4 5 FHOG Applications & Payments for New Dwellings Residential Construction, WA (ABS) Houses Commenced Houses Completed Building Approvals, WA & Greater Perth (ABS) Jul-27 Jul-29 Jul-211 Jul-213 Jul-215 Jul-217 WA Houses WA Other Dwellings Perth Houses Perth Other Dwellings Dwellings Commenced Dwellings Completed FHOG Paid for New Dwellings FHOG Paid 3 Month Rolling Average Source: ABS 8731., T5 & 1 FHOG Applications for New Dwellings FHOG Applications 3 Month Rolling Average Source: Treasury 3 Mar-27 Mar-29 Mar-211 Mar-213 Mar-215 Mar-217 Source: ABS 8752., T34 & T38 (Original Data) Alterations & Additions ($m/month) Value of Building Jobs, WA (ABS) 1 $14 $12 8 $1 6 $8 $6 4 $4 2 $2 $ Jul-27 Jul-29 Jul-211 Jul-213 Jul-215 Jul-217 New Building Jobs ($m/month) Value of Building Jobs ($m/month) $7, $6, $5, $4, $3, $2, $1, Value of House/Other WA Residential Building Jobs (ABS) Houses Other Residential Alterations & Additions, Including Conversions Alterations & Additions, Including Conversions (Trend) $ New Construction New Construction (Trend) Source: ABS 8731., T34 Source:ABS 8731., Table 47 1

Urban Development Institute of Australia (UDIA) WA P: (8) 9215 34 E: udia@udiawa.com.au Disclaimer While the data has been collected with due care for the purpose of reporting property market and general economic trends, no responsibility can be taken regarding its accuracy and individuals should conduct their own specific research before making any decisions. Information provided in this publication should not be taken as a guarantee of specific future movements in the market, but rather as an indication of historical market trends. All or part of this document may not be reproduced, published or included in any report without the approval of the UDIA (WA Division) as to the form and context in which it will appear. 11