UDIA WA PROPERTY MARKET STATISTICS

UDIA WA PROPERTY MARKET STATISTICS JUNE 218 1

IN THIS ISSUE KEY TRENDS INDUSTRY UPDATE ECONOMY RESIDENTIAL LAND DEVELOPMENT RESIDENTIAL PROPERTY SETTLEMENTS RESIDENTIAL PROPERTY MARKET RESIDENTIAL CONSTRUCTION SECTOR 6 7 8 9 2

KEY TRENDS ECONOMY Current Figure M/Q Change M/Q Rolling Av. YOY Change Official Cash Rate Target (RBA) 1.% (July) % (M) 1.% (M).% Discounted Variable Mortgage Rate (RBA).% (Jun) bps (M).% (M) bps Estimated Resident Population - WA 2,6,7m (Dec).1% (Q) 2,6,62m (Q).6% Unemployment Rate - WA (Seasonally Adj.) 6. (Apr) -98 bps (M) 6.9 (M) 62 bps Retail Turnover - WA (Original) 2.66 b (Apr) -.6% (M) 2.6b (M) -1.% Consumer Price Index - Greater Perth 11. (Mar).1% (Q) 19.8 (Q).9% Wage Price Index - WA 128. (Mar).% (Q) 128.1 (Q) 1.% RESIDENTIAL LAND DEVELOPMENT SECTOR Current Figure M/Q Change M/Q Rolling Av. YOY Change Lot Sales (UDIA Land Snapshot ) 96 (June 218) 9.% (M) 292 (M) -.% RESIDENTIAL CONSTRUCTION SECTOR Current Figure M/Q Change M/Q Rolling Av. YOY Change Dwelling Approvals - WA (Original) 1,68 (May) 28.% (M) 1,2 (M) -7.% Private Sector House Approvals - WA (Original) 1,12 (May) 2.1% (M) 11 (M) -1.8% New Dwelling Loans Owner-Occupation - WA (Original),627 (Apr) -6.% (M),768 (M) -.1% Dwelling Construction Starts - WA (Original), (Dec) 11.1% (Q),98 (Q) 12.2% House Approvals - Greater Perth (Original) 99 (May) 1.2% (M) 82 (M) -6.9% Multi-Unit Approvals - Greater Perth (Original) 2 (May) 8.% (M) 28 (M) 6.1% RESIDENTIAL PROPERTY MARKET Current Figure M/Q Change M/Q Rolling Av. YOY Change Median House Price - Perth (Landgate/REIWA) 1, (Mar) -1.9% (Q) 1, (Q) -1.2% House Sales - Perth (Landgate/REIWA),28 (Mar) -6.6% (Q),97 (Q) -1.6% Unit Sales - Perth (Landgate/REIWA) 1,229 (Mar) -6.8% (Q) 1,28 (Q) -16.1% House and Unit Listings - Perth (REIWA) 1,1 (Mar) 1.2% (Q) 1,8 (Q) -2.9% Dwelling Loans Owner-Occupation - WA (Original),8 (Apr) -7.% (M),9 (M) -6.1% Established Dwelling Loans Owner-Occupation - WA (Original) 2, (Apr) -8.7% (M) 2,6 (M) -.% FHOG Applications - WA (Original) 662 (May) 29.% (M) 612 (M) -19.% Investment Housing Loans - WA (Original) 28.m (Apr) -11.% (M) 9.2m (M) -8.2% REIWA Average Selling Days - Perth 7 (Mar) 11.1% (Q) 68.7 (Q) -2.8% Residential Rental Market Current Figure M/Q Change M/Q Rolling Av. YOY Change REIWA Median Rent - Perth 6 (Mar) 1.% (Q) (Q) -2.7% REIWA Vacancy Rate - Perth.1% (Mar) - bps (Q).8% (Q) -1 bps

UDIA WA INDUSTRY UPDATE PERTH S GREENFIELD MARKET SET FOR GROWTH At a recent UDIA WA Industry Luncheon, Director of Research Colin Keane issued a challenge for the Perth market. In order to reach normal market conditions and achieve positive growth in the greenfield development market in the coming few years, we need to reach a point where we are selling 7 lots per month. CHRIS GREEN Director Policy & Research UDIA WA According to Colin s comprehensive market research, Perth is currently averaging 62 new lot sales per month with a median lot price of 22,. We have reached the bottom of this market cycle and the expectation is for moderate growth in the next two to three years. Putting this in context with other markets in Australia, Melbourne is averaging 1, lot sales per month with a median price of, while Sydney is achieving 61 sales per month with a median of 68,. Both of these markets have experienced a decline in sales numbers over the last two to three quarters as they reached their peak in 217. Perth is currently the cheapest greenfield land market across the capital cities, with Colin estimating that lots are priced around 6, under the fair market value of 2, or 6% of the Perth median house price. This is despite our lot size being the smallest in the country at 7sqm. Research data suggests that we need to lift our population net gain by 1 persons per month and create extra jobs per month in order to generate enough demand for 7 lots per month. The estimate for new job creation is based on the ratio over the last ten years between actual job growth in persons and actual new land sales. In that period, for every 1 jobs created, new lots were sold. Perth s ratio of :1 is much higher than other cities, highlighting our reliance on jobs, particularly in the mining industry, to foster demand for property. Moving forward, Colin recommends that Perth market the lifestyle opportunities that are available here to attract more people, loosening our reliance on jobs growth to boost demand. In promoting a clear brand for Perth, we can work on attracting interstate and overseas migrants seeking an affordable, relaxed lifestyle while remaining connected to their global networks. We can realistically compete with the likes of Melbourne and Sydney on this front. Overall, the message is clear for Perth. Positive growth in the The question is, how does the Perth market lift activity to reach the property market is expected in the next two to three years and if we work on a clear identity for Perth as a global city, we can continue to target of 7 lot sales per month? grow and prosper. Figure 1: Source: Colin Keane, Research presentation 29-6-218

ECONOMY 1 Key Points of Interest 8 Labour Market, WA (ABS) 1 Unemployment Rate (%) Employed Persons (,) 6 12 12 11 11 1 1 May-8 May-9 May-1 May-11 May-12 Employed Persons (Original) May-1 May-1 May-1 Unemployment Rate (Seas. Adj.) May-16 2 May-18 May-17 Unemployment Rate (Original) Source: ABS 622., T8 Mortgage Rates, Australia 9. Standard Variable 8. Discounted Variable Home Loan Rates (% p.a.) 7 1 Three Year Fixed 7. 6.... Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-1 Jun-1 Jun-1 Jun-16 Jun-17 Jun-18 Source: RBA, F Year-on-year change in Index (calculated quarterly) Western Australia s unemployment rate fell basis points (bps) month-on-month (MoM) in May to sit at 6.% (in original terms, 6.% seasonally adjusted), 76bps higher than at the same time last year and 72bps higher than the national rate of.%. In May, the number of employed persons in WA increased.% MoM to 1. million, 1.% higher than at the same time last year. WA s state participation rate fell marginally (-7bps) in May to 68.9%, but remained 18bps up year-on-year (YoY) and was also 2bps higher than the national rate of 6.7%. In the December quarter, the population of Western Australia retained an annual growth rate of.8%, increasing to total 2.8 million people. Included within this increase in total WA population was: an increase of,7 (+.2% YoY) additional people was due to natural increase; 1,697 (+17.7% YoY) additional people arrived in WA from overseas; and, (+22.% YoY) people left WA to live in another state or territory. In February 218, WA job vacancies increased 12.1% to 22,2, 2.7% higher than at the same time last year. Consumer Price Index (ABS).7...1 Mar-8 -.1 -. Mar-9 Mar-1 Mar-11 Mar-12 Mar-1 Mar-1 Mar-1 Mar-16 Mar-17 CPI - Perth (Housing) YOY Change CPI - Australia (Housing) YOY Change CPI - Perth (All Groups) YOY Change CPI - Australia (All Groups) YOY Change Mar-18 Source: ABS 61, T 1, & 7. Retail Turnover (ABS).1.11 Retail Turnowver Growth (p.a).9.7...1 -.1Apr-8 Apr-9 Apr-1 Apr-11 Apr-12 Apr-1 Apr-1 Apr-1 -. YoY WA (Original) YoY Australia (Original) YoY WA (Seas. Adj.) YoY Australia (Seas. Adj.) Source: ABS 81, T

RESIDENTIAL LAND DEVELOPMENT SECTOR Key Points of Interest 2 18 7 16 6 1 12 1 8 6 2 The median lot price for June increased 2.8% MoM to sit at 227,71,.1% higher than in June 217. UDIA Land Snapshot Survey - Lot Sales Total weekly lot sales Lot sales were positive across all price categories on a monthly basis: combined sales 2, (and below) increased 16.% month-on-month (MoM) and fell 1.8% year-on-year (YoY); combined sales between 2,128, were 2.2 times that of those in May, and 7.6% higher than at the same time last year; and combined sales above 28, lifted 9.% MoM and 2.% YoY. 8 Weekly category lot sales In June, UDIA s Land Snapshot survey results for total lot sales increased 9.% on those from May, and remained steady from the same time last year. 1 Jun-1 2 Dec-1 Jun-1 Dec-1 Jun-1 Dec-1 Jun-16 Dec-16 Jun-17 Dec-17 2, or under Rolling 12 Month Average 2,1-28, Rolling 12 Month Average 28, plus Rolling 12 Month Average Total Sal es Rol ling 12 Month Average Jun-18 Source: UDIA Land Snapshot Survey Monthly vacant land settlements by metropolitan corridor for March, 218 (Landgate) Top five suburbs for vacant land settlements for the three months to March, 218 (Landgate) Monthly Vacant Land Settlements by Corridor TOP SUBURBS FOR VACANT LAND SETTLEMENTS Settlements Three months to 1 March Feb-18 Regions North-East Metro North-West Metro South-East Metro South-West Metro Peel Central Metro Vacant Land Settlements/month Settlements 61 9 96 27 6 Vacant Land Median Price 268, 2, 2, 22, 18, 8,69 Median Lot Size 7 96 7 7 7 BALDIVIS 6 187,. 2 PIARA WATERS 27, 7. BRABHAM 22, 76. WELLARD 6 22, 6. HAMMOND PARK 226,. Greater Perth Corridor Vacant Lot Settlements Central North East North West South East Median Price Median Size 1 South West Peel 2 1 Median lot price per month (thousands) Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Greater Perth Corridor Median Prices Central North East North West South East South West Peel 1 Median lot size/month Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 6 Greater Perth Corridor Median Lot Size Central North East North West South East South West Peel 2 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 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. 6

RESIDENTIAL PROPERTY SETTLEMENTS Median Price/Settlements Greater Perth Median Price Detached and Non-Detached Dwellings: Greater Perth 8, 6, 6, 2, 2 2, 1,,,, 8, Median Price Detached Houses 28, 2 1 2, 12 22, 1 Feb-18 Mar-18 Jan-18 Dec-17 Nov-17 Oct-17 Sep-17 Aug-17 Jul-17 Jun-17 May-17 Feb-17 Mar-17 Jan-17 Mar-18 Jan-18 Feb-18 Dec-17 Oct-17 Nov-17 Sep-17 Jul-17 Aug-17 Jun-17 Detached Housing Wheatbelt Detached Housing South West Detached Housing Pilbara Detached Housing Mid West Dec-16 16, Nov-16 Non-Detached Housing Gascoyne 2 Oct-16 May-17 Non-Detached Housing Great Southern Non-Detached Housing Goldfields Esperance 18, Sep-16 Mar-17 Non-Detached Housing Pilbara Non-Detached Housing Mid West 6 Jul-16 Jan-17 Non-Detached Housing South West 8 2, Aug-16 Feb-17 Non-Detached Housing Wheatbelt 16 Jun-16 Dec-16 18 May-16 Median Price Non-Detached Dwellings Regional Dwelling Settlements April 18 26, Oct-16 Median Price Detached Houses Vacant Land Settlements, Median Price: Greater Perth and FHOG Applications Nov-16 Settlements Detached Houses Sep-16 - Mar-18 Jan-18 Feb-18 Dec-17 Oct-17 Nov-17 Sep-17 Jul-17 Aug-17 Jun-17 May-17 Mar-17 Jan-17 Feb-17 Dec-16 Oct-16 Nov-16 Sep-16 Jul-16 Aug-16 Jun-16 2, May-16 1, Jul-16, Aug-16 2, Jun-16 6, May-16 1 Detached Housing Great Southern Detached Housing Goldfields Esperance Detached Housing Gascoyne Median Price Vacant Land Settlement Vacant Land First Home Buyer Grant Applications - new build 2 6 8 1 Source: Landgate/UDIA/Treasury (WA) Regional Land Settlements April 18 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 1 1 2 2 TOP SUBURBS FOR MEDIUM DENSITY SETTLEMENTS Settlements Three months to 1 March Median Price Median Size TOP SUBURBS FOR DETACHED HOUSING SETTLEMENTS Settlements Three months to 1 March Median Price Median Size 1 SCARBOROUGH 122 8, 192. 1 CANNING VALE 99, 6. 2 PERTH 96 12, 121. 2 BALDIVIS 88, 2. MAYLANDS 7 2, 17. BYFORD 61 7, 99. COMO 69 8, 11. ELLENBROOK 6 7,. NOLLAMARA 68 61, 2. THORNLIE 8 8, 699. Source: Landgate/UDIA Top suburbs for detached housing and medium density settlements over the three months to March 218. 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 MARKET Key Points of Interest The number of dwellings financed by first home buyers (FHB) in April fell.6% MoM to 1,16, but was 2.% higher than at the same time last year. The average loan size for FHBs increased.% MoM and.% YoY to sit at 18,. In April, dwellings financed by non-fhb fell 6.7% in number to sit at,6, which was 7.% lower than in April 217. However, the average non-fhbs loan size increased.7% MoM and 6.1% YoY to 68,8. 1 Construction of dwellings (WA) Purchase of new dwellings (WA) Refinancing of established dwellings (WA) Purchase of established dwellings (WA) Total housing finance commitments (WA) 8 6 2 Apr-8 Apr-9 Apr-1 Apr-11 Apr-12 Apr-1 Apr-1 Apr-1 Source: ABS 69., T1a (Original Data) Dwelling Finance for Investment Housing (ABS) 16 The mean price of WA residential dwellings for the March quarter fell by.9% quarter-on-quarter (QoQ) to,,.9% higher than at the same time last year. Owner Occupier Housing Finance, WA (ABS) 16 WA Dwelling Finance for Investment Housing WA Rolling month average 1 1 AU Dwelling Finance for Investment Housing 12 AU Rolling month average 12 1 1 8 6 8 AU Dwelling Finance (m/month) Included within total WA owner-occupier housing finance commitments: commitments for the construction of dwellings fell 1.% MoM and.% year-on-year (YoY) to 79; commitments for the purchase of new dwellings were down 16.% MoM and 17.8% YoY to 162; and commitments for the purchase of established housing also fell 7.% MoM and.% YoY to,672. WA Dwelling Finance (m/month) In April, the number of dwelling finance commitments for WA owner-occupiers fell 6.% month-on-month (MoM) to sit at,627,.1% down on the same time last year. Owner Occupier Loan Commitments (monthly) 12 6 2 Apr-8 Apr-9 Apr-1 Apr-11 Apr-12 Apr-1 Apr-1 Apr-1 Source: ABS 671., T1 & 2 (Original Data) Dwelling Finance, WA (ABS) 1 9 8 7 2 6 2 1 1 Home Loan Commitments Average Home Loan Amount (thousands) 2 Apr-8 1 Apr-9 Apr-1 Apr-11 Apr-12 Apr-1 Apr-1 Apr-1 FHB: Average Loan Size Non-FHB: Average Loan Size FHB: Dwellings Financed Non-FHB: Dwellings Financed Source: ABS 69., T9b (Original Data) 6 1% Perth Metropolitan Rent (REIWA) 2 Residential Property Listings, Perth Metro (REIWA) 18 % 2 1 % Quarterly variance - Median House Rent House and Unit Listings (Quarterly) Quarterly Variance & Vacancy Rate (%) Median House Rent (Quarterly) 16 1 12 1 8 6 2 Vacancy rate Mar-7 Median House Rent -% Mar-8 Mar-9 Mar-1 Mar-11 Mar-12 Mar-1 Mar-1 Mar-1 Mar-16 Mar-17 Source: REIWA Source: REIWA 8

RESIDENTIAL CONSTRUCTION SECTOR Key Points of Interest FHOG Applications & Payments for New Dwellings 1, In May, building approvals for WA dwellings increased 8.6% YoY and 2.% MoM to 2. Those located in Greater Perth also lifted 8.% MoM to 2, 7.7% higher than at the same time last year. The total value of new residential building jobs in WA lifted 1.% MoM in May to sit at 7.7 million, 12.% higher than in May 217. Of this total: the value of residential building jobs for alterations and additions (including conversions) rose 19.1% MoM and.6% YoY to 7.8 million; and the value of residential building jobs for new construction also increased 2.8% MoM and 1.% YoY to 12.9 million. The value of private sector building jobs for WA houses increased 2.% in May to. million, 1.7% lower than at the same time last year. The value of jobs for other residential dwellings lifted 96.% MoM and 6.8% YoY to 16 million. FHOG Paid for New Dwellings FHOG Paid Month Rolling Average FHOG Applications for New Dwellings FHOG Applications Month Rolling Average 1, May-8 May-9 May-1 May-11 May-12 May-1 May-1 May-1 May-16 May-17 May-18 Source: Treasury Building Approvals, WA & Greater Perth (ABS) Building Approvals (dwellings/month) WA building approvals for houses increased 1.% over May to 1,26, 11.% lower than at the same time last year. House building approvals for Greater Perth, which made up 79.% of those for WA, also rose 1.2% month-on-month (MoM) to 99 and fell 6.9% year-on-year (YoY). 2 2 1 1 May-28 May-21 WA Houses May-212 WA Other Dwellings May-21 Perth Houses May-216 May-218 Perth Other Dwellings Source: ABS 871., T & 1 8 1 6 8 6 2 2 May-28 May-21 May-212 May-21 May-216 May-218 Alterations & Additions, Including Conversions Alterations & Additions, Including Conversions (Trend) New Construction New Construction (Trend) Residential Construction (dwellings per quarter) 12 Residential Construction, WA (ABS) 1 9 8 Houses Commenced Dwellings Commenced Houses Completed Dwellings Completed 7 6 Dec-27 Dec-29 Dec-211 Dec-21 Dec-21 Dec-217 Source: ABS 872., T & T8 (Original Data) Source: ABS 871., T Value of Building Jobs (m/month) Value of Building Jobs, WA (ABS) New Building Jobs (m/month) Alterations & Additions (m/month) 1 1 7, 6,, Value of House/Other WA Residential Building Jobs (ABS) Houses Other Residential,, 2, 1, Source: ABS 871., Table 7 9

Urban Development Institute of Australia (UDIA) WA P: (8) 921 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. 1