melbourne residential communities rfr h2 2012

MELBOURNE COMMUNITIESRESEARCH & FORECAST REPORT

www.colliers.com.au/research

Consumer Sentiment Defines MarketThe decline in the Melbourne residential land market has continued during the past 12 months due to low consumer sentiment as well as a drop in population growth. Positive consumer sentiment is vital to maintaining growth in residential land sales and is driven by factors including job security and lot values. Moreover, consumer sentiment generally reflects economic stability.

With the recent economic uncertainty within the state over the last 12 months, as well as continued instability globally, consumer sentiment within Victoria has remained below the 100 point index, whereby the market is deemed to be in equilibrium, since February. Global capital markets remain volatile and job security tentative which is causing consumers to be cautious in regards to spending.

Deloitte Access Economics notes, employment growth across the Melbourne Statistical Division has weakened from 1.1% since March 2010 to 0.2% at June 2012. This is forecast to remain stagnant between 0.2% and 0.3% until the end of 2013. Coupled with an increase in the unemployment rate from 5.1% to 5.3% over the year to June 2012 these factors have led to a further decline in sentiment.

The inability of both developers and purchasers to obtain finance for new developments have also hurt the residential property market in Victoria. Banks are wary of providing finance, preferring to deal with those developers who have existing relationships. While on the retail side purchasers are expected to have larger deposits due to the removal of the First Home Owners Bonus from the State government in June 2012 which should see a reduction in first home buyers’ real purchasing power. With prevailing consumer sentiment not expected to change in the short to medium term, developers have continued to adjust prices to draw buyers back to the market albeit with limited success.

Population growth has historically driven demand in the residential market as new residents entering the state have required housing according to the ABS. Overseas migration has been the largest component of overall population growth in Victoria according to the Australian Bureau of Statistics (ABS), comprising an average of 62% of total population growth since 2004.

The Victorian population increased by 447,634 persons from the 2005 to 2009 financial years of which 65% consisted of overseas migration. However, since 2009 overseas migration has steadily declined, dropping by nearly 30,000 persons over the 2009 to 2010 financial year and a further 7,889 persons from 2010 to 2011. Over this same period the population growth level has decreased by a similar amount of persons which has led to decreased demand for residential property.

RESIDENTIAL LAND MARKET INDICATORS - SECOND HALF 2012

Region Median Price Sold to Date Remaining Yield* Number of Projects

West $205,000 10,715 26,344 32

North $210,000 5,116 5,599 20

South East $198,750 6,151 10,715 24

Total $205,000 21,982 42,658 76

*Includes lots that have yet to sell and that have not been released to market.** Median prices exclude rebates Source: Colliers International Research

SECOND HALF 2012 | RESIDENTIAL

RECENT PERFORMANCE OF THE RESIDENTIAL COMMUNITIES MARKET:

WEST

NORTH

SOUTH EAST

KEY HIGHLIGHTS

• 15 estates have sold out since the last reporting period.

• Of the current land estates operating in Melbourne’s growth corridors, an estimated 21,970 lots have sold.

•Median land prices have decreased by $10,000 from $215,000 to $205,000 over the six months to December 2011 but increased 7% over the year.

Evergreen, TruganinaOne of only six new estates released in 2012, Evergreen is being marketed by Colliers International.

Reduced demand is also reflected in the housing approval levels recorded by the ABS. In Melbourne’s growth corridor building approval levels between January and July 2012 are tracking below 2011 levels equivalent to 2,089 fewer approvals to date. The largest change has been recorded in the LGA of Wyndham where there has been an 80% reduction in approvals during 2012 from the same time last year. The smallest change in building approvals was recorded in the LGAs of Hume and Casey where there has only been a decline of 2% and 4% respectively. Colliers International anticipates building approval figures in 2012 will not reach the same levels as 2011 due to lower consumer sentiment as well as the removal of the First Home Owners Boost.

Government policy on development is also changing and will affect the development of residential property throughout Victoria. On June 11 2012 Minister for Planning Matthew Guy proposed changes to the zoning of commercial, industrial, and residential land uses. Within the new covenants residential land would be placed into one of three categories; the Residential Growth Zone, General Residential Zone and Neighbourhood Residential Zone.

The Neighbourhood Residential Zone will have the most stringent regulations including height controls, consideration of minimum lot sizes and regulations on subdivision. The Residential Growth Zone will be introduced to make clear what areas in Victoria are being targeted for densification. The biggest change with this system is the local councils’ ability to decide which areas will be categorised. With many councils opposed to densification it is anticipated that councils in the outer suburbs will zone themselves in the Neighbourhood Residential Zone, retarding growth. Currently these reforms are open to feedback, but it is assumed that after the consultation period ends in September 2012 implementation will be enforced.

Source: Deloitte Access Economics

MELBOURNE STATISTICAL DIVISION EMPLOYMENT GROWTH

Jun-

06

Sep-

06

0.20%

0.00%

1.00%

1.20%

0.40%

0.60%

0.80%

Dec-

06

Mar

-07

Jun-

07

Sep-

07

Dec-

07

Mar

-08

Jun-

08

Sep-

08

Dec-

08

Mar

-09

Jun-

09

Sep-

09

Dec-

09

Mar

-10

Jun-

10

Sep-

10

Dec-

10

Mar

-11

Jun-

11

Sep-

11

Dec-

11

Mar

-12

Jun-

12

Sep-

12

Dec-

12

Mar

-13

Jun-

13

Sep-

13

Dec-

13

0.21%

1.10%

0.04%

Forecast

“On June 11 2012 Minister for Planning Matthew Guy proposed changes to the zoning of commercial, industrial, and residential land uses”

Source: Australian Bereau of Statistics

HOUSE APPROVALS IN THE MELBOURNE GROWTH CORRIDORS

City of Wyndham City of Hume City of CaseyShire of Melton Shire of CardiniaCity of Whittlesea

2005

4,000

2,000

0

6,000

8,000

16,000

18,000

10,000

12,000

14,000

2006 2007 2009 2011 Jan - July 2012

Num

ber o

f app

rova

ls

2008 2010

COLLIERS INTERNATIONAL | P. 2

RESEARCH & FORECAST REPORT | SECOND HALF 2012 | RESIDENTIAL | MELBOURNE

TRANSPORT AND INFRASTRUCTUREThe most important infrastructure development in the Victorian pipeline is the $10 billion East West Link. The proposed 18 kilometre tunnel would connect the Eastern Freeway to the Western Ring Road and help alleviate traffic congestion across the Westgate Bridge. This would increase accessibility and reduce travel time to the Western suburbs, a key concern for potential buyers in this corridor. Currently, the Victorian Government is compiling a business case for the project in order to obtain funding from the Federal Government. The business case is expected to be completed early next year.

Over the first half of 2012 several minor rail infrastructure projects were completed, including four new railway stations and the South Morang Rail Extension. The State Government has placed a focus on upgrading the rail system to help ease traffic congestion and encourage commuting from the outer suburbs of Melbourne.

Over the next two years further upgrades to railway lines and two road projects are expected to be completed. Rail projects include the Sunbury Electrification Project in the North, which will add a metro service to the Northern growth corridor, more than doubling its capacity to transport individuals into Melbourne’s CBD, while the road infrastructure upgrades at Clyde Road and Hallam Road in the South East are also due for completion by December of this year.

OUTER MELBOURNE INFRASTRUCTURE UPDATE

Infrastructure Project Location StatusEstimated Completion

DateCurrent Description

RAIL

Sunbury Rail Electrification Northern Region Under Construction 2012 Electrification of the Sunbury line from Watergardens to Sunbury, enabling metro access from the Sunbury and Diggers Rest stations. The train stations will also be refurbished allowing for an extra 500 car parks at the Diggers Rest Station and a further 100 car parks at the Sunbury Station.

Cranbourne East Rail Extension

South Eastern Region Planning N/A The project will extend the Cranbourne rail line to Cranbourne East and includes a new station at Cranbourne East.

Regional Rail Link Western Region Under Construction 2016 The Regional Rail Link project aims to give Geelong, Bendigo and Ballarat trains their own dedicated tracks through the metropolitan system from Sunshine to Southern Cross Station. The line will also incorporate the construction of two stations at Tarneit and Wyndham Vale. Once complete the Regional Rail Link will provide services for up to an extra 9000 passengers during peak times.

Williams Landing Project Western Region Under Construction 2012 Creation of a new premium train station at the Williams Landing Town Centre. The project includes plans for 500 car spaces as well as a designated bus terminal and taxi ranks. The station will be located on the Werribee line.

ROAD

North-East Link Northern Region Planning N/A Planning has commenced for a road connection between the Metropolitan Ring Road in Greensborough and the Eastern Freeway in Bulleen. The road will provide a section of the major orbital road surrounding Melbourne connecting new employment hubs providing easier access for residents of the Northern suburbs to the Melbourne Airport.

Aitken Boulevard Northern Region Under Construction 2013 A Private Public Partnership between the Federal Government and Peet Ltd., Stockland and Lend Lease has been put in place to build a new street between Mickleham and Sydney Roads. The new street will improve traffic flow and connectivity in the area while significantly reducing congestion for local residents. It will also act as a vital link between new communities in Craigieburn, providing easy access to amenities within new Northern communities.

East West Link Western Region Planning N/A Planning has begun for a tunnel to connect the Western Ring Road to the City Link Freeway. The tunnel would alleviate major traffic from Westgate bridge improving access to the Outer Western suburbs.

M80 Upgrade Northern and Western Region Under Construction 2015 The creation of new lanes to ensure three to six lanes in each direction as well as new dedicated merging lanes to increase safety.

Hallam Road Upgrade South Eastern Region Under Construction 2013 The number of lanes will be increased to three between Pound and Ormond Roads. A shared bus lane/left turn lane will be constructed.

Cooper Street - Epping Northern Region Planning 2013 An additional lane will be added to Cooper Street between the Hume Freeway and Edgars Road. Dedicated bus lanes for on and off ramps to Hume Freeway will be added to provide less congested roadways for the Northern Region's residents.

Source: Department of Transport/ Melbourne Water/ South East Water/ City West Water/ Colliers International Research



OUTER MELBOURNE INFRASTRUCTURE UPDATE

Infrastructure Project Location StatusEstimated Completion

DateCurrent Description

ROAD (CONTINUED)

Outer Melbourne Ring Road/ E6 Transport Corridor

Northern and Western Region Planning N/A A proposal has been made to accommodate a 100 kilometre long high-speed transport link for pedestrians and freight in Melbourne's North and West, creating an opportunity for new road and rail transport links through the Werribee, Melton, Tullamarine, Craigieburn/Mickleham and Epping/Thomastown areas. Construction is not likely to commence until 2020.

Narre Warren - Cranbourne Road

South Eastern Region Committed 2015 Currently in pre-construction phase the project will encompass the creation of three lanes each way between Ormond and Glasscocks Roads, with two lanes each way for other sections, intersection improvements at Ormond and Glasscocks Roads and a shared path for cyclists and pedestrians along the east side of Narre Warren-Cranbourne Road. Project funding has been confirmed, pre-construction planning will continue during 2012 and major works are likely to start by late 2013.

Yan Yean Road Northern Region Planning N/A A planning study is currently underway to identify and determine the road reservation requirements for the future duplication of Yan Yean Road between Diamond Creek Road and north of Kurrak Road. The study will be used to create a proposal to construct a four lane divided roadway.

Plenty Road Upgrade Northern Region Under Construction 2012 Widen Plenty Road into a four lane divided roadway from Gordons Road to Riverdale Boulevard. Due for completion in Spring 2012.

Palmers Road Rail Overpass Western Region Under Construction 2012 Part of the Williams Landing Project. The project involves the extension of Palmers Road beyond the Princes Freeway and across the Werribee rail line as well as the widening of the overpass from three lanes to five lanes.

Clyde Road Upgrade South Eastern Region Under Construction 2013 Two additional lanes will be created each way between High Street and Kangan Drive. The High Street and Enterprise Avenue intersections will be upgraded.

WATER

West Werribee Dual Water Supply Project

Western Region Under Construction 2014 The project will provide recycled water to Melbourne's Western suburbs and includes several major initiatives including: the creation of a salt reduction plant and pump station at the Western Treatment Plant; laying approximately 34 kilometres of transfer mains for both the recycled and drinking water; and building storage tanks for recycled and drinking water storage.

Cardinia South Sewerage Project

South Eastern Region Planning N/A Capacity constraints in the Lang Lang and Koo Wee Rup treatment plants are currently being investigated.

Troups Creek Stormwater Recycling Project

Western Region Under Construction 2012 An on-site treatment facility is being built as a joint partnership between Melbourne Water and Places Victoria to produce recycled stormwater for use in the brown water system.

Source: Department of Transport/ Melbourne Water/ South East Water/ City West Water/ Colliers International Research

Metropolitan

Cardinia

Knox

Yarra RangesMetropolitan

Inner City

Nillumbik

Casey

Wyndham

Melton

Hume Whittlesea

MELBOURNE COMMUNITIES

Prepared by Colliers International Research



Western Region Colliers International has identified 32 operating estates in the Western Region of Melbourne that are currently under construction. Upon completion these estates will comprise approximately 46,008 lots. This is a decrease in total lots from Colliers International’s last report whereby a total of 47,991 lots were identified. Of these estates approximately 23% of the stock available has already sold.

During the past six months seven estates (Alamanda, Arndell at Trugnanina, Tarneit Gardens, The Reserve, The Rise, Wyndella, and Riverina) have practically completed and have hence been removed from analysis in this report. The Point Cook Thirty30 estate has ceased construction since the last reporting period and has also been removed from this analysis. Of the current estates available one is nearing completion; Featherbrook. This estate has approximately 25 lots left remaining for sale.

Two new estates have been released to the market over the past six months. Gateway, developed by Central Equity, and Evergreen Estate are located in the suburb of Truganina and will comprise only 338 lots upon completion. Released in February this year, Gateway has already sold 52 lots (24%) in the first two stages.

Over 100 sales have occurred at both Allura and Atherstone since the last reporting period, having sold 120 and 105 each respectively. Featherbrook, Forsyth Park, Eynesbury Estate, and Aspire have all sold over 40 lots since the last report.

The Western Region of Melbourne continues to maintain its competitiveness in the market offering the lowest weighted average asking price of the three corridors. From a sample of 160 lots currently available for sale in the region the weighted average asking price was $205,344, excluding incentives, and the weighted average lot size was 438m2.

Maplewood, Melton107 lots have already transacted since Maplewood launched in 2011.

WESTERN REGION MARKET ACTIVITY - RESIDENTIAL ESTATES

Estate Name Suburb LGA Year Estate Commenced Total Number Number Sold Remaining

Yield*

Alamanda Point Cook Wyndham 2007 1,500 N/A N/A

Bellevue Truganina Wyndham 2011 325 59 266

Bluestone Wyndham Vale Wyndham 2008 1,200 N/A N/A

Featherbrook Point Cook Wyndham 2007 1,100 1,075 25

Heartlands Tarneit Wyndham 2010 1,100 N/A N/A

Kingsford Point Cook Wyndham 2009 567 N/A N/A

Manhattan Place Tarneit Wyndham 2009 187 N/A N/A

Manor Lakes Wyndham Vale Wyndham 2002 9,000 3,000 6,000

Meadow Springs Truganina Wyndham N/A 162 54 108

Paragon Point Cook Wyndham N/A 350 46 304

Parkbrook Point Cook Wyndham 2011 325 100 225

Saltwater Coast Point Cook Wyndham N/A 2,500 625 1,875

Saratoga Point Cook Wyndham N/A 700 N/A N/A

Waterhaven Point Cook Wyndham 2009 600 300 300

Williams Landing Williams Landing Wyndham 2008 2,500 850 1,650

Evergreen Truganina Wyndham 2012 132 15 117

Forsyth Park Truganina Wyndham 2012 473 59 414

Gateway Truganina Wyndham 2012 214 52 162

Allura Truganina Wyndham 2011 1,300 250 1,050

Arnolds Creek Melton West Melton 2008 1,700 1,105 595

Botanica Springs Brookfield Melton N/A 2,000 N/A N/A

*Includes lots that have yet to sell and that have not been released to marketSource: Colliers International Research



Western Region WESTERN REGION MARKET ACTIVITY - RESIDENTIAL ESTATES


Yield*

Eynesbury Estate Eynesbury Melton 2010 4,500 873 3,627

Maplewood Melton Melton 2011 626 107 519

Peppermint Grove Melton West Melton 2010 452 45 407

Silverdale Melton Melton N/A 267 N/A N/A

Waterford Melton Melton 2010 3,200 30 3,170

Aspire Plumpton Melton 2011 700 135 565

Atherstone South Melton Melton 2012 4,900 115 4,785

Encore Plumpton Melton 2011 158 N/A N/A

Toolern Waters Toolern Melton 2012 920 N/A N/A

Penny Royal Melton West Melton 2011 350 N/A N/A

Taylors Hill Caroline Springs Melton 2002 2,000 1,820 180




Northern RegionIn the Northern Region two new estates have been released while three previous estates have been completed. This takes the total number of lots available in the region to 21,250 of which 24% has already been sold (5,116 lots). Approximately 58% of the total number of lots in the Northern Region are within the LGA of Whittlesea, down from 66% six months earlier.

Over the last six months Carlingford estate sold the eight remaining lots available and was therefore removed from analysis in this report. Palisades and Vantage Point have also been removed due to their completion status.

Orchard Grove, a development by Metro Property, has sold approximately 100 lots since it began marketing in April 2011; this is equivalent to 57% of its total stock. Other notable sales results have occurred in the Everton Gardens estate which has sold an estimated 43 lots since the last reporting period. This estate is currently marketing its second of five stages with the third stage being released in the fourth quarter of this year.

NORTHERN REGION MARKET ACTIVITY - RESIDENTIAL ESTATES


Yield*

Aurora Epping North Whittlesea N/A 2,213 N/A N/A

Bridge Inn Rise Doreen Whittlesea 2009 190 110 80

Eucalypt Wollert Whittlesea 2010 1,300 350 950

Everton Gardens Mernda Whittlesea 2010 250 93 157

Fairview Mernda Whittlesea 2010 481 190 291

Lyndarum Epping North Whittlesea 2010 600 201 399

Mernda Villages Mernda Whittlesea 2006 3,000 1,800 1,200

Mosaic Lalor Whittlesea 2010 850 326 524

Renaissance Rise Mernda Whittlesea 2008 719 139 580

Summerhill North Epping Whittlesea 2009 687 549 138

Eden Gardens Epping North Whittlesea N/A 450 300 150

Orchard Grove Doreen Whittlesea 2011 175 100 75

Riverstone at Plenty River

Doreen Whittlesea 2009 1,200 620 580

Berry Lane Mernda Whittlesea 2010 268 135 133

Panorama Doreen Doreen Whittlesea 2010 125 57 68

Brookhaven Sunbury Hume 2010 245 46 199

Canterbury Hills Sunbury Hume 1990 1,404 N/A N/A

Highlands Craigieburn Hume 2008 4,764 N/A N/A

Jackson's Hill The South Valley Hume 1997 2,572 N/A N/A

Providence at Greenvale

Greenvale Hume 2010 150 100 50


Brookhaven, SunburySince marketing began in the second half of 2010 Brookhaven has sold 19% of its total stock.



South Eastern RegionThe South Eastern Region is the least expensive of the growth corridors. Of the 24 estates idenitifed in the region, comprising an estimated 19,104 lots, 6,151 have already been sold. Heritage Springs, Lakeside Pakenham, Arena at Officer, The Grove, and Settlers Run are all nearing completion and have therefore been removed from analysis in this report.

Previously Colliers International reported over 50% of stock in the South Eastern Region had already been absorbed. This figure has now declined to 33% due to the removal of the five estates which have been completed, as well as the introduction of two new estates

Potters Grove and Timbertop estates began marketing in the first half of 2012 and will add approximately 821 lots to the LGA of Cardinia. Approximately 70 lots have already sold since marketing commenced. Other notable sales results for estates in the region include those in Selandra Rise, which has sold approximately 150 lots since the last reporting period.

The South East Region has historically recorded the highest median sale price of all the growth corridors, however new suburbs such as Officer have begun to develop more rapidly reducing median lot prices as well as increasing the average lot size.

Of a sample of 146 lots which are currently for sale in the South East corridor the weighted average lot size was approximately 451m2, the largest across all growth corridors, and an average sale price approximately $208,308, excluding rebates.

SOUTH EASTERN REGION MARKET ACTIVITY - RESIDENTIAL ESTATES


Yield*

Arden Estate Pakenham Cardinia 2008 637 N/A N/A

Cardinia Lakes Pakenham Cardinia 2007 750 375 375

Eden Brook Pakenham Cardinia 2011 601 N/A N/A

Stockman Woods Estate Longwarry Cardinia 2010 150 100 50

Worthington Estate Pakenham Cardinia N/A 800 150 650

Timbertop Officer Cardinia 2012 600 50 550

Potters Grove Officer Cardinia 2012 221 20 201

Alarah Casey Casey 2009 250 193 57

Aspect Officer Casey 2010 2,500 250 2,250

Bernly Gardens Berwick Casey N/A N/A N/A N/A

Botanic Ridge Cranbourne Casey 2007 950 650 300

Berwick Waters Clyde North Casey 2011 2,750 150 2,600

Cascades on Clyde

Clyde Casey 2007 1,100 900 200

Casiana Grove Cranbourne West Casey 2010 670 270 400

Grandvue Officer Casey 2010 860 280 580

ArbourleaCranbourne

North Casey 2011 325 50 275

Parks Edge Cranbourne Casey 2011 520 20 500


Bellevue, TruganinaThis 325 lot estate has already sold 18% of it’s stock since marketing commenced.

N

1

2

3

4

5

6

7

8

9

10

11 12 13 14 15 16 17 18 1920 21

31

32

3330 29 28 27 26 25 24 23 22

MO

RRIS

RO

AD

BELLEVUE DRIVE

MER

IVAL

E D

RIVE

217 216 215 214 213 212 211 210 209 208 207206

205

204

203

202

201

239 238

237

233

231

230

228226

225224

223222221

218

219220

227

229

232

234

235

236

VANTAGE PLACE

STONYBROOK WAY301

302

303

304

305

306

307

308

309

310

313314

315 316 317 318

312311

325 323 322 321 320 319

324

407 406 405 404 403 402 401

507414

413412

411410

409408

417

418

419

420

416415 423

424 425 426 427 530

529

528

527

526 525 524 523 522 521

422

421

PEN

LEA

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RT

WAI

ORA

CO

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BEAT

TY A

VEN

UE

ALLCREST COURT

520519518

517516

515

514

513

512511

510509

508

506 505 504 503 502 501

601

602

603

604 605606 607 608 609 610 611 612 613

614 615 616 617

618

619

629

628 627 626 625 624 623 622621

620

STONYBROOK WAY

SHALAMAR DRIVE

FULLERTON WAY

MAI

TLAN

D D

RIV

E

SAMSARA AVENUE

701702

703704

705706

707708

709

710711

712713

714

727

726

725

724723

722

721

720719

718

830829

828 827826 825 824 823

822 821 820 819 818 817 816 815

814813

812811

810809

808807

806805

804803

802801

927 926 925 924 923

901

902

903

904

905

906

907

922

921

920

919

918

917

916

915

914

10091010

10111012

10131014

1015

10171018

1019

1001 1002 10031004 1005 1006 1007 1008

908

909

910

110111021103

11041105

11061107

1108

1016913

912

911

1139

717

715 716 11091110 1111

1112

1113

1114

1115 1116

1117

1118

1119

1120

1121 1122 1123 1124 1125

1126

1127

1128

1129

1130

1131

1137

1138

1136

1135

1134

1133

1132

SAMSARA AVENUE

DISP

LAY

VILL

AGE

DISPLAY VILLAGE

SALE

SO

FFIC

E

11 Stages Featuring325 impressive allotments

6

4114110 5

09

1STAGE 11

STAGE 10

STAGE 7

STAGE 8

STAGE 9

STAGE 6

STAGE 3

STAGE 4

STAGE 5

STAGE 2STAGE 1



South Eastern RegionSOUTH EASTERN REGION MARKET ACTIVITY - RESIDENTIAL ESTATES


Yield*

Pasadena Clyde Casey 2010 420 160 260

Quarters Cranbourne West Casey 2011 800 93 707

Selandra Rise Clyde North Casey 2010 1,200 750 450

The Avenue Casey Casey N/A N/A N/A N/A

Livingston Cranbourne East Casey 2011 N/A N/A N/A

The Hunt Club Cranbourne Casey 2002 2,000 1,690 310

Marriott Waters Lyndhurst Casey N/A 1,000 N/A N/A




New Supply Pipeline

Source: Growth Area Authority compiled by Colliers International Research

•The supply of residential lots include lots yet to be sold/released in the communities contained in this report, plus land releases in various stages of planning. All have completed precinct structure plans (PSPs) with the Growth Area Authority.

•Future supply levels are constantly changing as lots are absorbed, development plans changed and new applications lodged. The figures below indicate a reflection of the current development pipeline as detailed within completed and draft PSP’s.

•Six new PSPs were completed in June 2012. These new development areas will add an estimated 37,782 lots to the growth corridors of Melbourne in the future. This brings the number of total proposed lots to 135,561.

•The recently completed Lockerbie PSP is the largest of the six new completed PSPs released by the Growth Area Authority. Comprising 1,121 hectares of land in the LGA of Hume, approximately 35 kilometres from the Melbourne CBD. The land is proposed to yield 10,221 lots with a development timeframe of 20 years.

•The Manor Lakes, Diggers Rest and Lockerbie North PSPs each have less than 5,000 proposed lots.

•The Merrifield PSP is a joint project between MAB Corporation and Gibsons Property Corporation. The new master planned community is set to house an estimated 6,877 households and will be delivered over the next 25 years.

•The Western corridor has the highest proportion of lots (36%) with completed PSPs in the supply pipeline, the majority of which are in the LGA of Melton (35,254 lots). This is followed by the South Eastern corridor with 33% and the Northern corridor with 31%.

ESTIMATED PROPORTION OF FUTURE SUPPLY BY REGION

West 36%

North 31%

South East 33%



General Land Market•The following analysis includes sales

of vacant lots that have settled and been recorded on Pricefinder as at December 2011 in Melbourne’s Growth Areas. Previous figures have been revised due to time lags between exchange, settlement and data availability. Sales not at arm’s length or that were sold in one line are excluded.

•Between 2005 and 2011 approximately 82,265 vacant lots were sold and settled in the LGAs of Hume, Cardinia, Casey, Whittlesea, Wyndham, and Melton.

•The LGA of Wyndham has recorded the highest proportion of total vacant lot sales in the growth areas of Melbourne with 31% of total sales respectively, followed by Melton with 17%, Casey and Whittlesea with 16% each.

•The LGA of Wyndham recorded the highest median price for vacant lots (excluding rebates) in Melbourne’s growth areas over the second half of 2011 with $237,750, followed by Casey ($213,950), Whittlesea ($211,000), Hume ($195,000), Melton ($175,500), and Cardinia ($176,000).

•Only the LGA of Wyndham recorded an increase in the median price over the six months to December 2011, the LGA of Cardinia remained stable while the rest recorded decreases in median sales prices of vacant lots.

Source: Pricefinder

*Median prices exclude rebatesSource: Pricefinder General House Market

City of Hume City of WhittleseaCity of Casey City of WyndhamShire of Cardinia Shire of Melton

H12005

H22005

H12006

H22006

H12007

H22007

H12008

H22008

H12009

H22009

H12010

H22010

H12011

H22011

2,000

1,000

0

3,000

4,000

8,000

10,000

5,000

6,000

7,000

Media

n Sa

les P

rice

Num

ber o

f Sale

s

9,000

$225,000

$200,000

$175,000

$150,000

$125,000

$100,000

Median Sale Price

GENERAL MARKET INDICATORS – VACANT LAND

LGAMedian Sale Price Median Sale Price Half Yearly Annual

H1 11 H2 11 Change Change

Cardinia $175,750 $176,000 0% 3%

Casey $224,000 $213,950 -5% -3%

Hume $210,500 $195,000 -8% -4%

Melton $181,000 $178,500 -1% 16%

Whittlesea $220,000 $211,000 -4% 5%

Wyndham $230,000 $237,750 3% 16%

“The LGA of Wyndham recorded the highest median price for vacant lots (excluding rebates) in Melbourne’s growth areas over the second half of 2011” DEMAND AND MEDIAN SALE PRICES FOR VACANT LOTS IN MELBOURNE’S GROWTH AREAS




General Land Market•The median sale price in the growth areas

of Melbourne decreased by 9% over the six month period, from $215,000 to $205,000, but recorded an increase of 7% year on year.

•The total number of sales over the second half of 2011 decreased by approximately 21% over the six month period.

•Over the 2011 calendar year product between $200,000 and $300,000 was the most popular, constituting 50% of sales over the first half of 2011 and 49% of sales in the second half. This is the first time over the measurable period that this price range has surpassed product under $200,000 in total number of sales.

•Product between $200,000 and $300,000 has grown its market share by 44% from the first half of 2005 (5%) to the second half of 2011 (49%).

•The 350m2 to 450m2 lot size range continues to be the most popular throughout the Melbourne growth corridors comprising approximately 29% of total sales over the second half of 2011. This is followed by lots between 450m2 and 550m2 which made up 24% of sales over the same period.

•Colliers International recognizes that the increase in total sales for lots smaller than 450m2 is partially due to restrictions imposed by the State government which demands developers produce 15 lots per hectare.

Source: Pricefinder

VACANT LOT TURNOVER BY LGA: 2005-2011

Casey 16%Melton 17%

Whittlesea 16%Wyndham 33%

Hume 10%

Cardinia 9%

Source: Pricefinder

$200k-$300k

$300k-$400k

$600k-$700k

$700k+

<$200k

$500k-$600k

$400k-$500k

H2 2009 H1 2010 H2 2010 H1 2011 H2 2011

2,000

1,000

0

3,000

4,000

8,000

10,000

9,000

5,000

6,000

7,000

NUMBER OF VACANT LOTS SOLD BY PRICE RANGE IN MELBOURNE’S GROWTH AREAS




General House Market•The following analysis includes the sales of

new and established houses that have settled and been recorded on Pricefinder as at December 2011 in the growth areas of Melbourne. Previous figures have been revised due to time lags between exchange, settlement and data availability. Sales not at arm’s length or that were sold in one line are excluded.

•Between 2005 and December 2011 approximately 107,165 houses were sold and settled in the LGAs of Melton, Hume, Wyndham, Whittlesea, Cardinia, and Casey.

•Over the second half of 2011 the total number of sales dropped in the growth areas of Melbourne by approximately 11% from the first half of the year. The LGA of Cardinia recorded the greatest drop in sales with a decrease of 17%.

•All LGAs, except the City of Hume, recorded declines in total sales volumes over the six months to December 2011.

•The median house price in Melbourne’s growth areas decreased for the second time over the past 12 months. Down to $385,000 from $390,000.

•The LGA of Casey had the highest proportion of overall sales in the growth areas of Melbourne with 29%, followed by Wyndham with 18%, and Hume with 17%.

•Over the second half of 2011 overall sales volumes declined in the growth areas of Melbourne by 6%. The South Eastern Region saw the greatest deterioration in sales volume with a drop of 11% while the Northern Region saw only a 1% decrease in total number of sales.

•Unlike the vacant land market, the South Eastern Region of Melbourne comprised approximately 35% of house sales in the growth area of Melbourne over the second half of 2011, this area represented the smallest proportion of vacant lots sold in the region with only 14% of total sales.

•The Western corridor represented the second largest proportion of house sales (34%) this trend has been consistent for the past 12 months.

•Unlike the market for vacant lots, the house market has remained dominated by sales of lots between 550m2 and 650m2 since the first half of 2005. This is due in part to the quantity of existing stock of this size in the area.

•The proportion of lots sold between the 350m2 to 450m2 have increased 5% since the first half of 2005 to 12% of total sales while lots sold between 650m2 and 750m2 have decreased by 3% over the same period.

•Product between $300,000 to $400,000 has been the most popular sale price range since the first half of 2009 while the $400,000 to $500,000 range has grown its market share 20% since the first half of 2005.

•The proportion of property transactions in the $500,000 to $600,000 range have increased by 7% since the first half of 2005, while the proportion of properties priced under $300,000 have dropped by 59% over the same time period.

Source: Pricefinder

City of Casey City of HumeCity of Wyndham Shire of Melton Shire of CardiniaCity of Whittlesea

H12005

H22005

H12006

H22006

H12007

H22007

H12008

H22008

H12009

H22009

H12010

H22010

H12011

H22011

2,000

1,000

0

3,000

4,000

8,000

10,000

5,000

6,000

7,000

Media

n Sa

les P

rice

Num

ber o

f Sale

s

9,000

$450,000

$400,000

$350,000

$300,000

$250,000

$200,000

Median Sale Price

DEMAND AND MEDIAN SALE PRICES FOR HOUSES IN MELBOURNE’S GROWTH AREAS




General House Market

Source: Pricefinder

GENERAL MARKET INDICATORS – HOUSES

LGAMedian Sale Price Median Sale Price Half Yearly Annual

H1 11 H2 11 Change Change

Wyndham $380,000 $385,000 1% 1%

Whittlesea $425,000 $407,750 -4% -2%

Casey $392,500 $392,000 0% 1%

Cardinia $375,000 $361,000 -4% -2%

Hume $378,000 $367,550 -3% -2%

Melton $370,000 $370,000 0% 3%

“the new and established housing market has remained dominated by sales of lots between 550m2 and 650m2 since the first half of 2005”

Source: Pricefinder

HOUSE TURNOVER BY LGA: 2005-2011

Casey 35%

Cardinia 10%

Whittlesea 17%

Hume 17%

Melton 15%

Wyndham 22%

Source: Pricefinder

NUMBER OF HOUSES SOLD IN OUTER MELBOURNE

$300k-$400k

$400k-$500k

$700k-$800k

$800k+

<$300k

$600k-$700k

$500k-$600k

H2 2009 H1 2010 H2 2010 H1 2011 H2 2011

2,000

1,000

0

3,000

4,000

8,000

10,000

9,000

5,000

6,000

7,000

NUMBER OF HOUSES SOLD BY PRICE RANGE IN MELBOURNE’S GROWTH AREAS



OutlookWith the declines in demand shown via reduced building approval figures, population growth, and consumer sentiment during 2012 it is anticipated that vacant lot and house sales in the growth corridors of Melbourne will remain low. Colliers International expects that due to the removal of the First Home Owner Boost in June 2012 sale figures in the first half of 2012 will be higher than those in the second half due to certain purchases being pulled forward in order to obtain the government rebate but that overall annual sales figures will be similar to those recorded in 2011.

While it is highly unlikely that consumer sentiment will shift into the positive spectrum due to stagnating employment growth and steady unemployment rates over 2013 Colliers International expects that vacant lot and house sales in the growth corridors of Melbourne will continue at levels recorded over 2011 until the beginning of 2014. Along with the lack of demand and negative consumer outlook, financing issues are likely to persist for both purchasers and developers over the next 12 months as banks remain risk averse.

The ability to stimulate the market doesn’t rest with any one party, but rather, demands a more collaborative approach between developers, councils and state government in order to deliver more affordable housing in Melbourne. With the current environment, Colliers International anticpates that developers will offer varied lot sizes in order to deliver affordable house and land packages to the market. This action is anticipated to lead to a further increase in the proportion of sales between 350m2 and 450m2 and will lead to a more affordable median price recorded in both vacant lot and house sale prices over the next 16 months.

COLLIERS INTERNATIONAL

Level 32, 367 Collins Street, Melbourne VIC 3000TEL 03 9629 8888FAX 03 9629 4945

RESEARCHERS

Margaret Bowden Analyst / ResearchTEL 03 9940 7279FAX 03 9092 1479

Paul Wheate Director / ValuationTEL 03 9612 8823FAX 03 9092 1323

Colliers International does not give any warranty in relation to the accuracy of the information contained in this report. If you intend to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections.

Colliers International will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. COPYRIGHT - Colliers International 2012.

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melbourne residential communities rfr h2 2012

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