OUTLOOK BRIGHTON A CONTEXT ON BUSINESS, CULTURE, LIFESTYLE AND RESIDENTIAL Due to sustainable economic fundamentals, apartments in Brighton have been achieving solid growth in median prices. OCTOBER 2014 A B C D E F LOCATION AND ACCESSIBILITY With easy access to the beach, parks, gardens, retail shopping and education facilities, Brighton is known for its premium lifestyle / Pg 02 & 03 MELBOURNE CBD Easy access by train and road to the Melbourne Central Business District which supports around 440,000 jobs / Pg 04 LIFESTYLE & AMENITY Brighton benefits from a wide variety of leisure facilities and top class education providers / Pg 04 HOUSEHOLD INCOMES Brighton has an average household income of $125,354 which grew by 83% in the ten years to 2011 / Pg 05 RESIDENTIAL MARKET PERFORMANCE Median apartment prices have grown 4.6% p.a. over the past ten years / Pg 06 RENTAL MARKET PERFORMANCE Median weekly rent for an apartment in Brighton achieves a premium of 26% over apartments in the surrounding suburbs / Pg 07 ATTRACTIVE LIFESTYLE WITHIN PROXIMITY TO THE CITY EXTENSIVE LOCAL AMENITY THE FAMOUS DENDY STREET BEACH 1 POP 2 INF 3 EMP Brighton accommodates all three of the Urbis economics and research fundamentals that make a sustainable suburb Population, Infrastructure and Employment.
LOCATION & ACCESSIBILITY Brighton DOCKLANDS PORT MELBOURNE 19 MELBOURNE CBD 20mins 7 24 17 18 ST KILDA 6 16 ELWOOD 3 15 11 14 5 1KM 21 13 1.5KM BRIGHTON BAY STREET 10 9 100M Brighton is an established suburb, offering access to beaches and open space, retail, entertainment and education facilities, all within 10 km of the Melbourne CBD. Brighton is located 10 km south east of the Melbourne CBD in the Bayside municipal council area. Shopping precincts are located at Church Street, with a cinema, supermarkets, fashion and beauty establishments; while Bay Street in North Brighton offers convenience retail as well as cafes and restaurants, fashion and gift shops and a second cinema. Additional retail is located at tin Street, near Gardenvale train station, with further entertainment uses positioned on the Esplanade. 2 URBIS BRIGHTON OUTLOOK
2 1 SOUTH YARRA Entertainment & Leisure 1 Melbourne Cricket Ground 2 3 4 5 6 Melbourne Park Elsternwick Golf Course Palace Cinema Royal Brighton Yacht Club St Kilda ina 7 Crown Casino 12 NEPEAN HIGHWAY MARTIN STREET 4 20 ELSTERNWICK 23 7KM SANDRINGHAM LINE 50M 8 22 Other Open Space Education 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Monash University Brighton Grammar School Firbank Girls Grammar School Star of the Sea College St James School Dendy Street Beach Kamesburgh Gardens Elsternwick Park Elwood Park St Kilda Pier St Kilda Foreshore Albert Park North Brighton Railway Station New Street Medical Centre 22 Coles Supermarket Brighton offers around 6km of coastline, with Dendy Street Beach renowned for its heritage listed beach boxes and offering a sheltered area of the bay, complete with lifesaving club, making it popular with families for swimming and recreation. Other waterfront facilities in Brighton include Middle Brighton Sea Baths which originally date back to 1881 and provide an enclosed 300m swimming circuit. These facilities are complemented by a leisure centre with, cafes, restaurants, galleries and antique shops, as well as a beach side promenade with city views. Residents in Brighton have access to a number of education institutions, not to mention Monash University campus is located nearby in Caulfield and with the train into the CBD; residents can easily access Melbourne University and RMIT University. North Brighton Station is located on Bay Street, with services on the Sandringham line departing for the City every 7-8 minutes at peak times, with journey times of 20 minutes to Flinders Street Station in the CBD. 23 24 tin Street Retail Emporium Key Legend URBIS BRIGHTON OUTLOOK 3
INFRASTRUCTURE, EMPLOYMENT & LIFESTYLE Brighton offers some of the best schooling in Melbourne. A GROWING REGION The majority of Brighton residents who work outside of their home suburb, work in the Melbourne CBD, Southbank, South Melbourne and Docklands. These suburbs make up the professional business district of Melbourne. As part of Victoria s strategic planning document Plan Melbourne, Brighton is located within the Southern Sub- Region. Since the majority of Brighton residents will find work in Melbourne, it is just as relevant to consider the Melbourne Central Sub-Region s employment growth outlook. Plan Melbourne indicates that this region currently contains employment of 567,000 jobs. In 2031 it is forecast that it will provide another 290,000 jobs. CLOSE TO MELBOURNE CBD Brighton is located 10 km from the Melbourne Central Business District (CBD) and benefits from direct access links via Nepean Highway and St Kilda Road, as well as the Sandringham train line. The City of Melbourne currently supports around 440,000 jobs and accounts for $9 billion of Australia s GDP. The CBD operates as a major financial centre in Australia and across the Asia-Pacific region. Mining companies BHP Billiton and Rio Tinto both have headquarters in Melbourne as well as two of the big four Australian banks and many other national and multinational firms. As a hub for students, the CBD accommodates Australia s number 1 university; The University of Melbourne, as well as the highly regarded RMIT University. BRIGHTON LIFESTYLE & AMENITY People who live in Brighton choose to do so for the lifestyle that the suburb offers due to the amenity it has on offer and its locational attributes. Bayside City Council recognises this and is implementing a $112.6 million plan for an improved Bayside over the next three years. The majority of the budget is set to go to infrastructure including transport and sporting facilities, as well as open spaces. As well as planned investment by the City Council into new and improved facilities, residents also have access to a wide variety of leisure amenity to suit their lifestyle. On top of the points mentioned in the previous section, there are also a number of golf clubs including The Royal Melbourne Golf Club which is ranked number 1 in Australia for its West course and 7th for its East course. There is also the Royal Brighton Yacht Club which offers memberships and access to frequent sailing activities. Brighton has a high proportion of families with children under 20 years of age. Brighton offers these families some of the best schooling in Melbourne for their children, with the following private schools: Brighton Grammar School is an all-boys school and offers all years of study. In 2013, the school s median ATAR was 85.40 for its students who graduated year 12. Xavier College offers education through to Year 8 and is accredited to deliver the International Baccalaureate Primary Years Program Haileybury College is situated in nearby Brighton East and offers both boys and girls college on the same campus. In 2013 the median ATAR was 87.00, with 94% of students receiving a first round university offer. Firbank Girls Grammar School is an allgirls school, offering all years of study. In 2013 the median ATAR was 91.00. St Leonard s College is located in Brighton East and is one of the leading co-ed schools in Victoria, offering all years of study in both the International Baccalaureate (IB) and Victorian Certificate of Education (VCE). Wesley College offers all years of study and in 2013 was ranked the top school in delivering both IB and VCE. Located in Elsternwick, 96% of students received a first round university offer. 4 URBIS BRIGHTON OUTLOOK
Compared to Greater Melbourne, Brighton is evidently a more affluent suburb. DEMOGRAPHICS POPULATION The catchment area of Brighton includes the suburbs of Brighton East, Ripponlea, Elwood, Elsternwick, Gardenvale, Sandringham, Highett, Hampton and Hampton East. The population of the catchment area in 2014 is 109,000 people, with around 23,000 residents living in Brighton. Over the 5 year period to 2014 the catchment area grew at a rate of around 1% per annum, adding 1,020 people per year. Population growth is expected to continue at a modest rate, with official state government forecasts and the nature of new dwelling approvals indicating that the population of the catchment area will grow by some 9,600 people to 2031 which would see the total population approaching 119,000. Over this time, Brighton is forecast to grow to over 25,000 people, with the majority of this growth occurring over the next 5 years. AGE DISTRIBUTION The age profile of all residents of Brighton is weighted toward those under 20 years old. Compared with Greater Melbourne, the age distribution in Brighton illustrates a high proportion of people who are over 50 years of age. This is also evident in the average age of residents of Brighton which is five years greater than that of Greater Melbourne. This large proportion of residents who are of this demographic choose to live in Brighton due to the suburbs attractiveness as a place to bring up their children and enjoy the wide variety of amenity that is provided. HOUSEHOLD INCOMES Over the ten years to 2011, household incomes in Brighton have grown proportionately more than average household incomes in the Greater Melbourne region, 83% compared to 67% respectively. The average household income in Brighton is $125,354, which is some 45% higher than the average for Greater Melbourne. The average household income in Brighton is typical for an affluent suburb of Melbourne. Compared to Greater Melbourne, Brighton is evidently a more affluent suburb. It is also not surprising given the more mature age profile of residents who typically have higher paying jobs. The income profile of households in Brighton indicates that around 9% of households earn over $208,000 per year and more than a third earn over $130,000. WHITE COLLAR PROFESSIONALS Conducive with high incomes, a high proportion of Brighton residents are in white collar professions, some 20 percentage points more than the Greater Melbourne average. This is not uncommon for a suburb such as Brighton which is within easy access to the Melbourne business district, has quality housing and amenity to suit the lifestyle typical of this demographic. INCOME PROFILE - 2011 HOUSEHOLD INCOME GROWTH 2001 TO 2011 PROPORTION OF HOUSEHOLDS 16% 14% 12% 10% 8% 6% 4% 2% 0% $Neg/Nil BRIGHTON GREATER MELBOURNE $1-$10,400 $10,400-$15,600 $15,600-$20,800 $20,800-$31,200 $31,200-$41,600 $41,600-$52,000 $52,000-$65,000 $65,000-$78,000 $78,000-$104,000 $104,000-$130,000 $130,000-$156,000 INCOME BRACKETS $156,000-$182,000 $182,000-$208,000 $208,000 plus Brighton Greater Melbourne Source: ABS; Urbis 40% 2001-06 WHITE COLLAR WORKERS - 2011 28% 31% 30% 2006-11 Brighton Catchment Area Greater Melbourne 92% 88% 72% Source: ABS; Urbis Source: ABS; Urbis URBIS BRIGHTON OUTLOOK 5
RESIDENTIAL MARKET Sales Analysis Over the past 12 months the median apartment price has grown by 13.7%. MEDIAN HOUSE PRICES Brighton is one of the most prestigious suburbs in Victoria, ranking 6th highest in terms of median house price as at June 2014. It is amongst Melbourne s best known suburbs for premium housing stock, being the only suburb of Bayside to rank in the top ten. Houses in Brighton have been achieving solid growth in median prices. Over the past ten years the average annual growth in median house prices was 5.5%. As at June 2014, the median price for a house in Brighton registered $1,675,000. This high median price reflects upon Brighton as a highly desirable suburb offering high quality housing stock and local amenity. MEDIAN HOUSE PRICE Victoria Top 10 Suburbs RANK SUBURB COUNCIL MEDIAN PRICE 1 Toorak Stonnington $2,805,000 2 Deepdene Boroondara $2,030,000 3 Canterbury Boroondara $2,007,000 4 East Melbourne Melbourne $1,900,000 5 Kew Boroondara $1,750,000 6 Brighton Bayside $1,675,000 7 Balwyn Boroondara $1,650,000 8 Middle Park Port Phillip $1,650,000 9 Malvern Stonnington $1,570,000 10 Armadale Stonnington $1,525,000 For the 12 months to June 2014 Source: RP Data; Urbis APARTMENT SALES CYCLE The 20 year sales cycle for Brighton apartments generally indicates a long term upward trend, highlighting that property, like many forms of investment should be viewed on a long term basis. Due to sustainable economic fundamentals, apartments in Brighton have been achieving solid growth in median prices. Looking at the sales volumes, there has been some time periods where sales have spiked which is likely due to new stock coming to market. Whilst there has been a slight increase in the volume of apartment transactions in Brighton over the past 20 years, the total number of sales per half year is still relatively low. This trend in sales volumes and the increasing median price suggests a high level of demand in this sought after suburb. BRIGHTON APARTMENTS Sales Cycle NUMBER OF SALES 180 160 140 120 100 80 60 40 20 0 TRANSACTIONS 1994 JUN 1995 JUN 1996 JUN 1997 JUN 1998 JUN 1999 JUN 2000 JUN 2001 JUN 2002 JUN 2003 JUN 2004 JUN 2005 JUN 2006 JUN 2007 JUN 2008 JUN 2009 JUN 2010 JUN 2011 JUN 2012 JUN 2013 JUN 2014 JUN Source: RP Data; Urbis MEDIAN SALE PRICE HALF YEAR PERIOD $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 MEDIAN SALE PRICE APARTMENTS SHOWING GOOD SIGNS OF GROWTH The low mortgage rate environment is spurring on the recent pick up in apartment prices since the slow down after June 2010. Whilst there has been around half as many sales of apartments in the June 2014 half year compared to the previous six months of the December 2013 half year, prices have continued to increase. Over the past twelve months, the median apartment price has grown by 13.7%. For the five years to June 2014, Brighton has experienced median apartment price growth of 7.5% per annum and over the past ten years there was growth of 4.6% per annum. KEY GROWTH STATISTICS Median Apartment Price Growth (p.a.) 1 Year 5 Years 10 Years Source: RP Data; Urbis 13.7% 7.5% 4.6% 6 URBIS BRIGHTON OUTLOOK
Over the past 10 years, median apartment rents have increased by a total of 91%. RENTAL MARKET MEDIAN RENTS 1 & 2 Bedroom Apartments/Units $500 $450 $400 $350 $300 $250 $200 2004 Source: Department of Human Services; Urbis MEDIAN RENTAL GROWTH Ten Year Growth P.A. Brighton 1 BED 2 BED BRIGHTON CATCHMENT AREA 2005 2006 2007 2008 1 BED 7.2% 6.5% 2 BED 6.7% 6% Source: Department of Human Services; Urbis 2009 2010 2011 Catchment Area 2012 2013 2014 MEDIAN RENTS The Brighton residential market is considered as an established owner occupier market with a sizeable rental market, having a quarter of its residents who rent. Over the past 10 years, median apartment rents have increased markedly. This growth has occurred in line with that of the catchment area. Over the past 10 years to ch 2014, median rents for one and two bedroom apartments in Brighton have increased by a total of 91%. Compare this to the catchment area which has also experienced good growth in rents but not to the level of Brighton, having grown by 88%. RENTAL GROWTH Analysing the rents for one and two bedroom apartments in Brighton reveals one bedroom apartments have experienced a doubling in median rents since ch 2004, whilst two bedroom apartment rents have increased by 90%. Over the past ten years, median rents for one bedroom apartments in Brighton have grown by 7.2% per annum. This rate of growth exceeds the annual growth experienced by one bedroom apartments in the catchment area, 6.5% per annum. Rents for 2 bedroom apartments in Brighton have grown at a rate of 6.7% per annum over the past ten years. The growth in rents for two bedroom apartments in Brighton has outpaced the catchment area over this time, 6.0% per annum. APARTMENT RENTAL PREMIUMS ch 2014 Catchment Area Rental Average 1 BED 2 BED Source: Department of Human Services; Urbis Brighton Premium 14% 23% PRODUCT PREMIUM Looking at the difference in rents between Brighton and the catchment area, it is clear that Brighton attracts a significant premium. Over time, this premium has varied, but more recently it has increased quite substantially. As at ch 2014, one bedroom apartments in Brighton were attracting a 14% premium over one bedroom apartments in the catchment area. At the same time, two bedroom apartments in Brighton were attracting a 23% premium over two bedroom apartments in the catchment area. This premium reflects upon the quality and desirability of the suburb. The Brighton rental market is heavily weighted towards larger dwellings with one bedroom apartments accounting for 9% of rental contracts compared with 18% for the catchment area. This suggests that the one bedroom apartment market in Brighton would experience low liquidity and should achieve a respectable yield. URBIS BRIGHTON OUTLOOK 7
Melbourne Level 12, 120 Collins Street Melbourne, VIC 3000 t 03 8663 4888 f 03 8663 4999 This publication is prepared on the instruction of BPM and is not suitable for use other than by the party to whom it is addressed. As the publication involves projections and assumptions it can be affected by a number of unforeseen variables. The forecasts and assumptions are a prediction and whilst Urbis has made every effect to ensure that the forecasts and assumptions are based on reasonable information, they may be affected by assumptions that do not necessarily eventuate or by know or unknown risks and uncertainties. It should be noted that past performance is not necessarily a reliable indication of future performance. The information in the publication does not represent financial advice and should not be regarded as such. It has been prepared without taking into account your financial situation or investment objectives. You should consider the appropriateness of the information in regards to your current financial situation or needs. Urbis accepts no responsibility for the accuracy or completeness of any such material. The information is subject to change without notice and Urbis is under no obligation to update the information or correct any assumptions which may change over time. This study has been prepared for the sole use of BPM and is not to be relied upon by any third party without specific approval from Urbis. This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) be reproduced, stored in a retrievals system or transmitted without prior written permission. Enquires should be addressed to the publishers.