SAGE APARTMENTS 2014

SAGE APARTMENTS 2014

* SAGE APARTMENTS are a great property opportunity. We are proud to endorse SAGE APARTMENTS as a Matusik Property Pick. * For more about SAGE APARTMENTS RANDAL WILSON rwilson@rwilson.com.au 0412 781 116 2

SEVEN REASONS WHY 7 reasons why astute investors should consider SAGE APARTMENTS on the Gold Coast, a good investment. 1 2 3 4 5 6 7 PROJECT. New 2 bedroom apartments; prime location. 5.8% + gross rental returns. Very keenly priced at between $345,000 & $369,000. Great designs & quality stock. POPULATION GROWTH. Current population growth is faster than projected. There is a need to build more new dwellings. The Gold Coast is the 6 th largest urban area in Australia. UNDERSUPPLY. Current housing supply is well short of underlying demand, and greatest rental demand is for affordable attached dwellings, especially two-bedroom apartments. HOUSING DEMAND. Strong demand from the young rental & first home buying markets, plus locals downsizing. Apartment product close to work & away from tourists is most wanted. SUPPLY. Very tight local vacancy rate with fewer than 50 properties for rent in local area. The amount of resale stock for sale has more than halved over the past 12 months alone. EMPLOYMENT. Over 67,500 people work in the local area. This area holds 25% of the jobs on the Gold Coast & of late, 4,000 new jobs are being created in this area each year. RECOVERY. The Gold Coast market is in recovery. Investors should buy practical, mainstream property, close to major employment hubs. SAGE APARTMENTS is a Matusik Property Pick. High quality product strong & growing demand generous apartments well appointed & designed very keenly priced. 3

1. PROJECT Extremely well priced Great apartment designs Bank valuation support Gross rental yields, high 5% SAGE APARTMENTS, 159 x 2 bed/2 bath/1-2 cars apartments, located within a 5-minute drive from Robina Town Centre. Great apartment designs, fit out, fixtures & 2.6m ceilings, air-conditioning & fans in bedrooms, cross ventilation. Secluded, quiet spot & surrounded by major open space. To be developed in stages, most with 24 apartments per building. Priced between $345,000 & $369,000. Gold Coast Population projections 2. POP. GROWTH Increasing population Growing faster than projected 6 th Largest urban area in Aust. Need to build more homes 3. UNDERSUPPLY Need to build 5,000 new homes each year & current supply at 3,000 new starts pa Greatest rental demand is for attached dwellings Gold Coast Projected annual housing need Current annual housing supply 4

Gold Coast Projected annual housing demand 4. HOUSING DEMAND Need for more affordable dwellings that suit young renters; first home buyers & ageing locals this means well priced, 2 bedroom apartments Current decade Past decade Robina area Vacancy rate 5. RENTAL SUPPLY Very tight vacancy rate Under 1,200 properties to rent on GC, just 50 in Robina area Stock for resale halved in Robina area last 12 months Postcode 4226 10 minute drive time Total employed 6. EMPLOYMENT 280,000 work on the GC 67,500 in the local catchment Local catchment currently creating 4,000 new jobs per annum Suburbs of Broadbeach, Broadbeach Waters, Burleigh Heads, Burleigh Waters, Carrara, Clear Island Waters, Mermaid Beach, Mermaid Waters, Merrimac, Miami, Robina & Varsity Lakes. 5

Gold Coast Property cycle Peak 7. MARKET RECOVERY The GC market is in recovery Sales increasing; supply very tight; population growth; prices back to fair value; rents rising; job growth & underbuilding Upswing Recovery GOLD COAST Downturn Stagnation Trough RECOVERY The Gold Coast market has finally entered a recovery. This recovery started in earnest this year. It followed a market correction & long stagnation period. This reset & rest was needed. Property values on the Gold Coast had appreciated in the order of 165% between 2001 & 2008. This time around, values are expected to lift, but mildly in comparison. Potentially, house values could rise by another 9% & attached property values by as much as 11%. MARKET DRIVERS One of the driving factors behind the Gold Coast property market & overall economy is its population growth. The Gold Coast also has a relatively young demographic profile, with the strongest demand over the next ten years coming from young renters & first home buyers. This will see the need for more affordable property. This will likely fuel the need more townhouses plus one & two-bedroom apartments in low-tomidrise developments, mostly, away from the beach. The size of the downsizing market is also quite large & this market, too, is looking towards smaller dwellings, but at affordable prices & in their local area. BETTER INVESTMENT BUYING Another big plus to the Gold Coast property cycle this time around is the undersupply of new stock & also the very tight local rental market. With already over 500,000 permanent residents; strong population growth; a young demographic profile & tight supply (at present) the Gold Coast property market is in its best shape for almost a decade. We stress that the Gold Coast property play moving forward is more about jobs & buying what I call capital city stock rather than the traditional lifestyle coastal property. Investors should look to buy property in or within close proximity to the Gold Coast major employment nodes. These include Robina/Varsity Lakes & Southport/Benowa. 6

MATUSIK PROPERTY PICK Matusik Property Insights has developed a rating model to assist investors to better select new residential investment opportunities. Property Pick uses a bottom up approach we don t rate a project based solely on macro market information. Importantly, we assess each development on its own merits. Our broad position is to only select residential investment opportunities with the following characteristics: Within a 10 minute commute of major infrastructure Boutique or staged projects Inner city or infill developments Well priced, with local resale support High local existing amenity & limited new supply High quality & designed for local demographic demand Only new developments that tick all the right boxes receive Matusik Property Pick support. Property Pick is set around ten key investment factors that are shown to improve total investment returns. The validation process draws on our extensive experience & importantly, on a range of third-party data sources & independent expertise. PAST PERFORMANCE A recent review* of 25 Brisbane past apartment projects found an average gain of 5% per annum on resale between 2004 & 2014. The average money earned between resales was $110,000. Matusik advised on 12 of these 25 projects; the average gain in those 12 projects was 6.4% per annum, returning buyers, on average, $182,000 between sales. *Analysis of official sales records in March 2014 as held by the Qld VG Dept. as supplied by RPData. Buildings investigated include: Lexicon; Casino Towers; Felix; Mayfair Residences; MacArthur Chambers; Flynn; Mon Reve; Milton Edge; Linear; Rivers on the Park; Riyala; Oxford on Boardwalk; Calibre; Silhouette; Fusion; Degree; River Reach; Proximity One; Esperian; Ikon; Viva; Left Bank; Soho & Oxygen. Matusik advised on those projects in bold. TEN KEY FACTORS 1. PEDIGREE. Who is the developer? Who is the builder? Do they have a good track record? Do they deliver what they say they will? 2. SITE. How good is the actual site? What facilities already exist in the local area? 3. DESIGN. Is the project & product well designed? Will it appeal to buyers in the future? Will the rental market pay a premium to live there? 4. WHO. Does the project appeal to at least two major rental demographic subsets? 5. RENTALS. How big is the local rental market? What has been the local vacancy rate & rental growth over the past three years? 6. NEED. How many jobs & businesses are within a 10 minute drive? 7. DEPTH. How big is the local resale market? What are the local price points? 8. SUPPLY. Underlying demand versus current new dwelling supply. 9. TIMING. In what position is the local market & product type in the property cycle? 10. UPSIDE. What are the longerterm trends? Does this property/project fit? What is planned for the city/town & local area? COPYRIGHT & TRADEMARK Property Pick is a trademark of Matusik Property Insights. Registered copyright no. 10353. All rights reserved. 7

END NOTES Matusik Property Insights Pty Ltd Unit 12, 65-69 Macgregor Tce, Bardon Q 4065 PO Box 1175, Kenmore Q 4069 07 3368 2878 office@matusik.com.au WWW.MATUSIK.COM.AU RISKS OF INVESTING IN PROPERTY Direct investment in residential property, like all investments, involves a number of risks. If these eventuate, your income might be lower than expected. There may even be none. In addition, the capital value of your investment could fall. The key risks of investing in property are outlined below: The property purchased may not provide the income or capital gains the asset was expected to produce. There is a risk that your property may, for periods of time, lie vacant & hence not generate income. Maintenance & repair costs are the investor s responsibility & can vary, and at times be significant. Such costs are sometimes recoverable from rental bonds or under insurance policies. There are a number of factors that affect the general property market including increases in supply & falls in demand; the cyclical nature of property values; increases in taxes & operating expenses; overall economic conditions; demographic changes; changes in town planning laws; casualty & condemnation losses; environmental risks; regulation on rents; detrimental new developments in the area; increases in interest rates; similarly, inflation & changes to bank funding policies. Gearing increases the volatility in the value of your investment. In the early stages of residential investment, a significant fall in the property s value may see balances fall to less than the total amount of borrowings. Increases in interest rates often increase the cost of borrowings. Changes in laws or their interpretations including taxation, superannuation & corporate regulatory laws, practice & policy could have an impact on your investment. You should seek professional tax advice before investing in residential property. DISCLAIMER This report has been prepared by Matusik Property Insights Pty Ltd. This content has been prepared without taking into account the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual s objectives, financial situation & needs, and if necessary, seek appropriate professional advice. Information herein includes material obtained from third parties considered to be accurate. Whilst this information has been carefully compiled, no warranty or promise as to its correctness is made or intended. Interested parties should undertake independent inquiries & investigations to satisfy themselves that any details herein are true & correct. In addition, no forecasts are being made about potential capital gains or rental returns. Past information about capital gains or rental growth does not imply such gains or growth will be made in the future. Matusik Property Insights disclaims all liability for any loss or damage suffered by any person of, or in connection with, the provision of information in this report, or the purported reliance thereon by any person. This report is valid for twelve (12) months from date of issue being June 2014. COPYRIGHT & TRADEMARK Reprinting, republication or distribution (outside of its intended purpose) of any portion of this document is strictly prohibited without the written permission of Matusik Property Insights. Seven Reasons Why is a trademark of Matusik Property Insights. Registered copyright no. 103812. All rights reserved. DATA SOURCES Matusik Property Database; Qld Government; Qld RTA; SQM Research; ABS Various; RPData; Knight Frank (Cairns); Rio Tinto Alcan & Metro Coal. 8