[on-demand webinar] property update with dr nicola powell

Helping you build & manage your property portfolio

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This presentation contains general information only and does not take intoaccount your personal objectives, financial situation or needs and youshould consider whether the information is appropriate to you beforeacting on it.

Before acting on any information you should consider seeking advice froma financial adviser and your accountant before making any financialdecision in relation to any matters discussed in this presentation.

General advice disclaimer

Dennis Wong

• Product & Training Manager.

• Property investor for the past 10 years

• Personal experience with renovations

• Great amount of industry experience

• Data Scientist for the Domain Group

• Her key objective is to create factual data driven conversations across all media channels.

• Nicola provides regular property commentary for local and national media outlets including digital, print, television and radio.

• Her passion is translating data to digestible consumer friendly columns.

• Within her career she has published numerous academic and interest papers.

• She is quickly establishing a name as a notable property commentator in Australia.

Dr Nicola Powell

Real Estate Investar

• Property investor focused technology company founded 2006

• We help simplify Real Estate Investment

• We help property investors make the most of their investment portfolios

• 260,000+ investors subscribe to our free membership, news and market reports

• 2,800 current members

• Mix of personal users, brokers, buyers agents and accountants

ASX:REV

• Heavy investment in product

• Public company governance

• Strong and focused board;

• Simon Baker – Former CEO of REA

• Anthony Catalano – CEO of Domain

In partnership with…

Our mission is to provide property investors around the world with the best advice, guidance, products

and services to enable them to create wealth through property investment.

Investor InsightsWho, What and When?

Who is buying?

Three types of property investors

Dr Nicola Powell

Passive Active Analytical

Three types of property investors

Dr Nicola Powell

Passive Active Analytical

• Limited research

• Limited understanding of the investment

path, e.g. tax benefits, finance strategy

• Purchase quickly

• Purchase emotionally

• Some degree of research to find a good

investment prospect

• Understands basic principles

• Seeks professional advice

• Increased chance of making a viable

investment

• Seeks extensive advice

• Research and analytics are a key

foundation

• Takes time to commit

• Conducts extensive due diligence

• Can miss an opportunity

Beginner-research Mid-research Deep-research

Three sorts of property investors

Dr Nicola Powell

Renovator Developer

ActiveShort-term

ActiveShort- to mid-term

Landlord

Passive

Mid- to long-term

What to buy?

Property debate..

Dr Nicola Powell

1. Economic indicators

2. Supply and demand

3. Price point

Dr Nicola Powell

Property debate..a house or a unit?

1. Purchase price

2. Ongoing expenses

3. Maintenance

4. Investment goals

5. Rental potential

New homes

Pros Cons

Delays and extra costs

Growth corridors

(over supply)

Potential over supply

Unpredictable growth

Tax depreciation

Attractive to tenants

Lower maintenance costs

Guarantees & warranties

Dr Nicola Powell

Established homes

Pros Cons

Older home

Building reports

Emotional buyers

Maintenance issues

Avoid premium of new build

Stronger performance in slow markets

Value add

Negotiate price

Dr Nicola Powell

Depreciation

New Home Established Home (5-yrs)

Asking Price $400,000 $375,000

Land Value $200,000 $200,000

Building Value $200,000 $175,000

Depreciable Amount $200,000 $153,125

Amount ($200,000 x 2.5%) x 40yrs ($175,000 x 2.5%) x 35yrs

Real Purchase Price $200,000 $221,875

Dr Nicola Powell

Dr Nicola Powell

Off-plan

purchasing fundamentals

Location

Owner-occupied Stock

Due diligence

Fixtures & fittings

Paperwork

Depreciation

Floor plan

Yield

When to buy?

When to purchase?

Dr Nicola Powell

Key considerations:

- Market dynamics

- Research sales history

- Domain Home Price Guide

- Rental vacancy

- Domain State of the

Market Report

- Yield potential

- Future development

- Research rezoning and

infrastructure changes

Trend watch: house prices

Source: Australian Property Monitors 1 800 817 616. Copyright APM Pty Limited.

Dr Nicola Powell

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

Sydney Melbourne Brisbane Adelaide Canberra Perth Hobart Darwin

Mar 2017 $1,167,127 $842,221 $533,292 $513,263 $692,313 $564,000 $383,558 $593,707

Dec 2016 $1,129,055 $813,146 $539,412 $506,539 $673,137 $574,458 $369,574 $576,904

Trend watch: house price movements


Dr Nicola Powell

14.6%

15.0%

3.6%

4.6%

8.4%

-2.5%

10.3%

-4.1%

3.4%

3.6%

-1.1%

1.3%

2.8%

-1.8%

3.8%

2.9%

Sydney

Melbourne

Brisbane

Adelaide

Canberra

Perth

Hobart

Darwin

YoY Change QoQ Change

Median Unit Price


Dr Nicola Powell

Sydney Melbourne Brisbane Adelaide Canberra Perth Hobart Darwin

Mar 2017 $741,789 $464,247 $385,987 $299,587 $410,256 $369,594 $283,627 $408,652

Dec 2016 $721,920 $463,169 $393,177 $301,909 $412,189 $383,087 $274,183 $464,148

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Mar 2017 Dec 2016

Units price movements


Dr Nicola Powell

-20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0%

Darwin

Hobart

Perth

Canberra

Adelaide

Brisbane

Melbourne

Sydney

YoY Change QoQ Change

Trend watch: affordability


Dr Nicola Powell

Price constraint for buyers in certain markets

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

$1,000,000

$1,100,000

$1,200,000

$1,300,000

Mar-

06

Ju

l-06

No

v-0

6

Mar-

07

Ju

l-07

No

v-0

7

Mar-

08

Ju

l-08

No

v-0

8

Mar-

09

Ju

l-09

No

v-0

9

Mar-

10

Ju

l-10

No

v-1

0

Mar-

11

Ju

l-11

No

v-1

1

Mar-

12

Ju

l-12

No

v-1

2

Mar-

13

Ju

l-13

No

v-1

3

Mar-

14

Jul-14

Nov-1

4

Mar-

15

Ju

l-15

No

v-1

5

Mar-

16

Ju

l-16

No

v-1

6

Mar-

17

Sydney Melbourne Brisbane Adelaide Canberra Perth

Building approvals riseCapital cities tell different stories

Source: Australian Bureau of Statistics, Building Approvals, 8731.0

Dr Nicola Powell

0

10000

20000

30000

40000

50000

60000

70000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

To

tal B

uil

din

g A

pp

rov

als

Sydney Melbourne Brisbane Adelaide Perth

Greater Sydney


Dr Nicola Powell

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Bu

ild

ing

Ap

pro

vals

Houses Units

Greater Melbourne


Dr Nicola Powell

0

5000

10000

15000

20000

25000

30000

35000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Bu

ild

ing

Ap

pro

vals

Houses Units

Greater Brisbane


Dr Nicola Powell

0

5000

10000

15000

20000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Bu

ild

ing

Ap

pro

vals

Houses Units

Australian Capital Territory


Dr Nicola Powell

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Bu

ild

ing

Ap

pro

vals

Houses Units