punt road public acquisition overlay valuation & economic advice · 2018-01-15 · condition...
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Punt Road Public Acquisition Overlay
Valuation & Economic Advice Norton Rose Fulbright on behalf of VicRoads
February 2016
© Urbis Valuations Pty Ltd ABN 28 105 273 523 All Rights Reserved. No material may be reproduced without prior permission. You must read the important disclaimer appearing within the body of this report. URBIS Australia Asia Middle East urbis.com.au
URBIS STAFF RESPONSIBLE FOR THIS REPORT WERE:
Directors Andrew Kinnaird & Mark Dawson Senior Valuer Linda Sharkey Valuer Brie McClaren Job Code MPEV-1429
TABLE OF CONTENTS
URBIS MPEV-1429-001
Executive Summary .................................................................................................................................... 1
1 Introduction ...................................................................................................................................... 2 1.1 Instructions ........................................................................................................................................ 2 1.2 Basis of Valuation .............................................................................................................................. 2 1.3 Definitions Of Value and Compensation ........................................................................................... 2 1.4 Escalation Allowance For Time ......................................................................................................... 3 1.5 Qualifications and Experience ........................................................................................................... 4 1.6 Assistance ......................................................................................................................................... 4 1.7 Questions Outside Expertise, Inaccuracies and additional Matters .................................................. 4 1.8 Facts, matters and assumptions ........................................................................................................ 4 1.9 Planning Panel Victoria Statement .................................................................................................... 4 1.10 Date of Inspection And Valuation Estimate ....................................................................................... 4
2 Key Assumptions and Disclaimers ............................................................................................... 5 2.1 Condition of Improvements ................................................................................................................ 5 2.2 Occupancy ......................................................................................................................................... 5 2.3 Planning Permits................................................................................................................................ 5 2.4 Ownership .......................................................................................................................................... 5 2.5 Other Heads of Compensation .......................................................................................................... 5 2.6 Properties Assessed .......................................................................................................................... 6 2.7 Building and Land Areas ................................................................................................................... 6 2.8 Impact on Buildings in ‘After’ Value ................................................................................................... 6 2.9 Property Ownership and Prior Compensation ................................................................................... 6 2.10 Redevlopment of Properties .............................................................................................................. 6 2.11 Pecuniary Interest .............................................................................................................................. 6 2.12 Limited Liability Scheme .................................................................................................................... 6 2.13 Market Movement .............................................................................................................................. 7 2.14 Goods & Services Tax ....................................................................................................................... 7 2.15 External Information Sources ............................................................................................................ 7
3 Location ............................................................................................................................................ 8
4 Land Affected by Public Acquisition Overlay ............................................................................. 10 4.1 Title Details ...................................................................................................................................... 10 4.2 Encumbrances, Caveats and Notices ............................................................................................. 10 4.3 Services ........................................................................................................................................... 10 4.4 Site Contamination .......................................................................................................................... 10 4.5 Land Area of Each Property ............................................................................................................ 10 4.6 Public acquisition Overlay Area ....................................................................................................... 11
5 Town Planning ............................................................................................................................... 12 5.1 Zoning .............................................................................................................................................. 12 5.2 Overlays ........................................................................................................................................... 13 5.3 Heritage Considerations .................................................................................................................. 13 5.4 Permitted Uses ................................................................................................................................ 13
6 Improvements ................................................................................................................................ 14 6.1 Overview .......................................................................................................................................... 14 6.2 Photographs .................................................................................................................................... 14
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7 Market Considerations ................................................................................................................. 15 7.1 Residential ...................................................................................................................................... 15 7.2 Retail/commercial ........................................................................................................................... 15 7.3 Development Sites .......................................................................................................................... 16 7.4 Sales Evidence ............................................................................................................................... 16 7.4.1 Punt Road house Evidence – Western side ................................................................................... 17 7.4.3 Punt Road House Evidence – Eastern Side ................................................................................... 18 7.4.4 House Sales – Nearby .................................................................................................................... 20 7.4.5 Apartment Sales – Punt Road ........................................................................................................ 21 7.4.6 Aprtment Sales – Nearby ................................................................................................................ 22 7.4.7 Land Sales – Dwellings .................................................................................................................. 23 7.4.8 Development Sites .......................................................................................................................... 24 7.4.9 Retail Sales ..................................................................................................................................... 25 7.4.10 Pub and Hotel Sales ....................................................................................................................... 26 7.4.11 Petrol Station and Carwash Sales .................................................................................................. 27
8 Economic Advice .......................................................................................................................... 28
9 Valuation Estimate ........................................................................................................................ 29
10 Economic Cost of Removing PAO .............................................................................................. 31
11 Economic Cost of Redevelopment ............................................................................................. 33
12 Economic Cost Summary ............................................................................................................ 34
Disclaimer .................................................................................................................................................. 35
Appendix A Letter of Instruction
Appendix B Qualifications and Experience
Appendix C Economic Memo
URBIS MPEV-1429-001 INTRODUCTION 1
Executive Summary
Brief Description: Properties affected by Public Acquisition Overlay along the eastern side of Punt Road, between Alexandra Avenue, South Yarra and Union Street, Windsor.
Instructing Party: Rory O’Connor of Norton Rose Fulbright, on behalf of VicRoads.
Purpose of Report: To provide an expert report that comments broadly on the economic value of retaining the Public Acquisition Overlay (PAO) and the economic cost of having to reinstate the PAO if it was removed.
Total Land Area: 78,429 m2, including VicRoads owned properties.
Total Land area of PAO: 36,630 m2, plus 10,634 m2of VicRoads owned properties.
Town Planning: General Residential, Residential Growth, Neighbourhood Residential and Commercial 1 zones.
Interest Valued: Freehold unencumbered subject to the assumptions contained herein.
Date of Valuation Estimate: 20 January 2016
Valuation Estimate Approaches: Direct Comparison, Summation and Capitalisation of estimated rent.
Economic Cost of Removing PAO: 2016 $ 2051 $ 50% P&E Act Reduction $39,100,000 $540,000,000 70% P&E Act Reduction $55,400,000 $650,000,000 90% P&E Act Reduction $71,700,000 $750,000,000
Economic Cost of Redevelopment: 2016 $ 2051 $ $N/A $82,450,000
Key Assumptions: I refer to the Key Assumption and Disclaimers contained within section 2 of this report. This report contains a high level estimate of potential compensation scenarios only. Internal inspections and occupancy details were not made available as part of this assessment.
Disclaimer: This Executive Summary should be used in conjunction with the Report and Valuation Estimates which follows, not in isolation.
Valuer: Andrew Kinnaird, AAPI Director
Certified Practising Valuer Australian Property Institute Member No 62804
2 INTRODUCTION URBIS
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1 Introduction
1.1 INSTRUCTIONS The Advisory Committee was appointed by the Minister for Planning to report and recommend on whether to retain, modify or remove the Public Acquisition Overlay (PAO) along the eastern side of Punt Road between Alexandra Avenue, South Yarra and Union Street, Windsor.
Specifically, I have been requested to:
(1) Review the background materials provided;
(2) Confer with instructing solicitors and counsel where necessary;
(3) Prepare an expert report addressing valuation matters arising from the Terms of Reference. In particular, I have been requested to comment broadly on the economic value of retaining the PAO and the economic cost of having to reinstate the PAO if it was removed; and
(4) If necessary, appear at the Tribunal for the Final Hearing of these matters, currently listed on February 9-11, 16-, 18 and 19, when necessary for the purpose of presenting your expert opinion concerning town planning.
My letter of instruction is attached at Appendix A.
In answering Question 3 I have based my calculations on the assumption that the current improvements situated within the PAO are identical to what would exist when ultimately compulsorily acquired.
In addition to the foregoing I have been verbally instructed to consider advice from 10 Consulting. I have been instructed to assess the cost of compensation in the event that the PAO is removed from the subject properties together with all supporting Government strategic planning or similar documents which could be construed as constituting a proposed reservation. This requires me to consider what level of redevelopment could occur on the subject properties over a 35 year time period and the potential impact on the economic cost of reinstating the PAO.
1.2 BASIS OF VALUATION In calculating the estimated economic value of retaining the PAO, I have undertaken an indicative desktop valuation estimate of each property affected by the PAO as at the current date. I have not inspected any of the individual properties internally, nor have I undertaken detailed investigations into the condition and state of accommodation of each individual property.
My indicative valuation assessments have been based on the information provided to me only, which I have assumed to be reasonably accurate. The Direct Comparison and Summation approaches have been utilised in my indicative desktop valuation estimates. Where appropriate I have also undertaken a capitalisation of estimated rent approach as a check method for commercial properties. I note that if occupancy details were available this would most likely become the primary method of valuation.
This report has been prepared for the above mentioned purpose only and cannot be relied upon for any other purpose.
1.3 DEFINITIONS OF VALUE AND COMPENSATION The Land Acquisition and Compensation Act 1986 (LACA) includes the following definitions which may pertain to compulsory acquisitions and are relevant to the indicative assessments contained within this report. The Planning and Environment Act 1987 (P&E Act) refers to the LACA in relation to these definitions, highlighting that payments of compensation under this Act is for Financial Loss.
“market value”, in relation to any interest in land on a particular date, means the amount of money that would have been paid for that interest if it had been sold on that date by a willing but not anxious seller to a willing but not anxious purchaser;
URBIS MPEV-1429-001 INTRODUCTION 3
“loss attributable to severance”, in relation to the acquisition of a claimant’s interest in land, means the amount of any reduction in the market value of any other interest of the claimant in the acquired land or any interest of the claimant in other land used in conjunction with the acquired land which is caused by its severance from the acquired land.
The LACA and P&E Act include additional definitions and measures of compensation which are discussed later in this report. Two key principles relate to when compensation is paid under the P&E Act (or its predecessor the Town and Country Planning Act 1961). When a payment is made under the P&E Act it is registered on Title.
In the event that the property is later compulsorily acquired the formula for the prescribed amount is applied in Section 41(7) of the LACA.
A X C B
A = the amount of compensation previously paid in respect of the land for the loss of market value due to:
i) the reservation or proposed reservation of the land or part of the land for a public purpose in a planning instrument, or ii) any part of the land being required for a public purpose.
B = the market value of the land in respect of which the compensation was paid, that value to be determined as if the underlying zoning applied to the land at the date which was the basis for the calculation of that compensation.
C = the compensation payable under this Part for the market value and severance less the value of the land attributable to improvements of a durable nature made:
i) with the consent of the Authority under section 12(1) (b); or ii) after the last date on which compensation was paid in respect of the land and before service of the most recent notice of intention to acquire an interest in the land.
In the event that a PAO is removed, recovery of compensation previously paid under the P&E Act is detailed in Section 111 as follows;
1) Any person who has paid compensation under this Part in respect of land as a result of a reservation or proposed reservation may recover the amount of compensation which is set out in a statement lodged under section 110(1) in respect of the land from its present owner of the land if-
a) the planning scheme is amended to remove the reservation; or
b) the amendment which proposed to reserve the land lapses; or
c) the declaration under section 113 is cancelled.
As a matter of completeness, market value has also been assessed in accordance with the definition approved by the Australian Property Institute, as follows:
“The estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in and arm’s length transaction, after proper marketing, wherein the parties have each acted knowledgably, prudently, and without compulsion.”
1.4 ESCALATION ALLOWANCE FOR TIME In calculating the estimated economic cost of having to reinstate the PAO, Urbis Economists have estimated the potential house and unit price growth over the identified future acquisition timeframe to as
4 INTRODUCTION URBIS
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compared to the Consumer Price Index. The difference between these two measures equates to the likely real house price growth which I have applied to the current market value estimates of each individual property to demonstrate the potential economic cost. I highlight that this memo has been prepared by Mark Dawson of this office and relates to advice that is outside my area of expertise.
1.5 QUALIFICATIONS AND EXPERIENCE My expert evidence report has been prepared in accordance of the requirements of the Planning Panels Victoria ‘Guide to Expert Evidence’ and a statement of my qualifications and experience is attached as Appendix B to this report.
A significant proportion of my valuation experience has been preparing compensation valuations in accordance with the Land Acquisition and Compensation Act 1986 and the Planning and Environment Act 1987.
1.6 ASSISTANCE In preparing this report I was assisted by Linda Sharkey, Senior Valuer and Brie McClaren, Valuer in gathering information, searching Certificates of Title and preparing parts of the report at my direction. Section 8 Economic Commentary was prepared by Mark Dawson, Director. The report was also peer reviewed by Brian Dudakov, Director. The opinions contained within the report are my own unless stated otherwise.
1.7 QUESTIONS OUTSIDE EXPERTISE, INACCURACIES AND ADDITIONAL MATTERS
To my knowledge, there are none contained within in my report. I highlight that section 8 Economic Commentary was prepared by Mark Dawson, Director, Economics and Market Research. This section is not my opinion as it contains advice that sits outside my area of expertise.
1.8 FACTS, MATTERS AND ASSUMPTIONS These are stated within my report.
1.9 PLANNING PANEL VICTORIA STATEMENT I have made all the inquiries that I believe are desirable and appropriate and no matters of significance which I regard as relevant to my knowledge been withheld from the Panel.
1.10 DATE OF INSPECTION AND VALUATION ESTIMATE A kerbside inspection of the properties affected was undertaken on 20 January 2016, this has been adopted as the relevant date of the valuation estimate.
URBIS MPEV-1429-001 KEY ASSUMPTIONS AND DISCLAIMERS 5
2 Key Assumptions and Disclaimers
2.1 CONDITION OF IMPROVEMENTS As mentioned earlier, I have not internally inspected the properties affected by the PAO at the date of inspection. Therefore I cannot accurately assess the value of the buildings situated on the properties.
Reference to the Rawlinson’s Construction Cost guide indicates that a medium size and quality residential dwelling with double brick is likely to cost in the order of $1,525-$1,645 per m2 excluding GST as at January 2015. Three storey flats of medium standard (modern build) are likely to cost in the order of $1,925 to $2,075 per m2 excluding GST as at January 2015.
In most instances I have adopted a deprecated building value of $750 per m2 for houses and between $1,000 and $1,500 per m2 for apartments. For some properties that have sold recently, where internal photos are available in Urbis’s sales databases, I have adopted higher or lower building rates.
I reserve the right to review these estimates if more detailed information becomes available.
2.2 OCCUPANCY I have not been provided with detailed occupancy details. This is of particular relevance to the properties that are being leased or occupied for retail or commercial purposes. These properties may be over or under let, which would impact on the market value of these properties. Furthermore, this information would be required to determine whether these properties highest and best use value is in line with the current use or would be for an alternative purpose i.e. residential redevelopment.
2.3 PLANNING PERMITS As the PAO has been in place since 1954 there is likely to be a number of properties that have either been fully constructed or have been substantially renovated since. In these circumstances it is possible that any planning permit issued for the works on these properties would have been approved on the basis that compensation is not payable for such.
I have not been provided with the above information. Therefore, it is possible that some of the estimates of compensation contained within this report are over stated, where permits on the aforementioned basis have been issued.
2.4 OWNERSHIP Other than those properties advised to be owned by VicRoads I have not been provided with the ownership details of the subject properties. Where two or more continuous certificates of title are held in one line there could be an impact on the compensation entitlement for those properties. This has not been factored into the valuation estimates.
2.5 OTHER HEADS OF COMPENSATION The estimates of compensation in this report focus on the market value, severance and application of the prescribed formula. When properties are compulsorily acquired, owners are entitled to other heads of claim. These claims, or costs to VicRoads, could add to the economic cost of the project. Nevertheless we have not detailed these within this report. They could include but are not limited to;
Disturbance; such as moving costs and stamp duty for replacement properties, business loss for commercial properties,
Special Value; such as additional costs for fitting a dwelling for disabled persons, Solatium; up to 10% payment of the market value for the intangible and non-pecuniary
disadvantages resulting from the acquisition, Costs of claim; these can include lawyers, valuers, town planners, accountants, engineers, etc.
6 KEY ASSUMPTIONS AND DISCLAIMERS URBIS
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I highlight that most of the aforementioned other heads of claim are not assessed by property valuers and hence would fall outside my area of expertise.
2.6 PROPERTIES ASSESSED The properties assessed are limited to those situated along the eastern side of Punt Road. Additional properties on the western side of the Punt Road are affected by a PAO but do not form part of this report.
2.7 BUILDING AND LAND AREAS For the majority of properties I have adopted the land and building areas as identified in either 10 Consulting report or VicRoads records. I have tested some of this advice by searching Certificates of Title and undertaking check measures of the PAO online. Hence, in limited circumstances I have adopted different land or building areas to what has been provided.
2.8 IMPACT ON BUILDINGS IN ‘AFTER’ VALUE I have estimated whether the affected buildings within the PAO would be fully demolished or partially or fully retained. This estimate has been made based on the aerial plans provided. I reserve the right to review my assessments based on detailed advice in this regard.
2.9 PROPERTY OWNERSHIP AND PRIOR COMPENSATION Based on the advice provided to me I have categorised each property as either; owned by VicRoads, P&E Act compensation paid or no compensation paid. In relation to the properties having no compensation paid I understand that only two or three of these have a right to claim compensation under the P&E Act, I have not been informed which properties these are. I have not independently verified this information.
In relation to the properties where compensation has been paid under the P&E Act I have been provided with the amount of compensation paid. In order to accurately apply the prescribed formula under the LACA it is necessary to be provided with the Before Value as at the date the compensation was paid. Absent of this information I have undertaken alternative calculations on the basis that the previous compensation paid equates to either 50%, 70% or 90% of the total compensation ultimately to be paid when compulsory acquisition occurs. This is important in determining VicRoads interest in these properties.
I reserve the right to review my valuation estimates if more detailed information becomes available.
2.10 REDEVLOPMENT OF PROPERTIES In accordance with my instructions I have relied upon 10 Consulting’s advice as to the redevelopment potential of subject properties in the event that the PAO is removed. I have applied this to a typical property size and then applied it to 50% of the total PAO area. This is a high level estimate to demonstrate the potential increase in property costs and is not based on specific properties.
2.11 PECUNIARY INTEREST I confirm that neither I, nor Urbis, have any pecuniary interest that could reasonably be regarded as being capable of affecting that person’s ability to give an unbiased opinion of value, or that would conflict with a proper valuation of the property. I advise that this position will be maintained until the purpose for which this valuation is being obtained is completed.
2.12 LIMITED LIABILITY SCHEME Urbis Valuations Pty Ltd operates under the Australian Property Institute Limited Liability Scheme which is a scheme approved under Professional Standards Legislation.
URBIS MPEV-1429-001 KEY ASSUMPTIONS AND DISCLAIMERS 7
2.13 MARKET MOVEMENT I am required to advise that this valuation is current at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period of time (including as a result of general market movements or factors specific to the particular property). Liability for losses arising from such subsequent changes in value is excluded as is liability where the valuation is relied upon after the date of the valuation.
2.14 GOODS & SERVICES TAX In my opinion the properties affected are most likely to be defined as either a ‘going concern’, GST exempt or the purchaser is entitled to claim an input tax credit under the relevant provisions of current GST legislation. Accordingly, a hypothetical sale of the interest valued herein is assumed to be GST free and our valuation is exclusive of any GST. I take no responsibility for the liability or otherwise for the payment of GST on an assumed sale of the interest valued herein. In addition, any market rentals, passing rentals from existing leases and outgoings amounts are also assumed to be exclusive of GST unless stated to the contrary.
2.15 EXTERNAL INFORMATION SOURCES In undertaking our valuation assessments I have relied on the following information:
Individual property information as provided within the background materials, prepared by 10 Consultancy Group, dated March 2015;
Spread sheets provided by Vic Roads (Roads Corporation) with details of land areas, area of the PAO and amounts of compensation previously paid.
VicRoads Punt Road Study May 2012 together with various background reports
Terms of Reference for Advisory Committee
Internal Urbis databases and externally provided market information; and
Sales evidence sourced from local real estate agents, valuers and Council.
In referring to sales and/or rental information as detailed within this report, I have relied on a range of external sources including publicly available information (newspapers, statements by public companies), subscription to information databases and information generally provided verbally by others such as estate agents, property managers, property valuers and consultants. In many instances, I have not had access to the original source material such as contracts of sale or signed leases. Although I have no reason to doubt the validity of the information provided to us, and I have relied on this information in good faith, I am unable to state with certainty that the information upon which I have relied is consistent with the contractual arrangements between the relevant parties.
8 LOCATION URBIS
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3 Location The Public Acquisition Overlay runs along the eastern side of Punt Road, from Alexandra Avenue to Union Street, through the suburbs of South Yarra, Prahran and Windsor, approximately 3 radial kilometres south, south-east of the Melbourne CBD.
This part of Punt Road is predominately occupied by period dwellings constructed before the introduction of the PAO, along with some commercial properties including petrol station, car wash, shops, car rental outlet, and various accommodation buildings such as a boarding house and backpacker lodge.
In addition, there are a number of schools positioned along the western side of Punt Road, including Christ Church Grammar School, South Yarra Primary School, Wesley College and Airlie Police College. Wesley College owns tennis courts affected by the PAO on the east side of Punt Road. The Alfred Hospital is situated to the south-western corner of Punt Road and Commercial Road, with the main entrance on Commercial Road.
Detailed overleaf is a location plan outlining the area affected by the Acquisition Overlay:
URBIS MPEV-1429-001 LOCATION 9
10 LAND AFFECTED BY PUBLIC ACQUISITION OVERLAY URBIS
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4 Land Affected by Public Acquisition Overlay
4.1 TITLE DETAILS I have not been provided with copies of the Certificates of Title for each property. A Certificate of Title was searched for randomly selected properties. I have done this confirm the accuracy of the information provided to me, in particular land areas, as detailed below in Section 4.5.
4.2 ENCUMBRANCES, CAVEATS AND NOTICES This valuation does not take into account the effect, if any, on the value of the interest valued of any easements, encumbrances or other notations whether registered on the Certificates of Title or not. I accept no responsibility for the impact on value from any such instrument.
4.3 SERVICES I have assumed that all services, including gas, electricity, water, sewerage and telephone, are connected or available for connection to the properties.
I have not undertaken formal searches to establish whether or not services are either available or connected to the subject property.
4.4 SITE CONTAMINATION I have not been provided with, nor sighted, contamination reports prepared by a qualified consultant.
Therefore, this valuation takes no account of the actual or possible effect on the value of the subject property of any previous or current environmental hazard including pollution, contamination, noxious emission or discharge, or the cost of, or necessity for, ceasing or cleaning up any environmental hazard.
Should any environmental reports subsequently reveal contamination issues and/or associated clean-up costs, my assessment may require revision.
4.5 LAND AREA OF EACH PROPERTY As I have not been provided with Title Plans for each property, I have relied upon land areas provided to me for the individual properties contained within the background materials, prepared by 10 Consultancy Group, dated March 2015 and Vic Roads records.
A summary of the property areas of the searched Certificates of Title are as follows;
I have assumed this information to be correct and have not had the opportunity to verify the majority of the information, aside from a small selection of properties. I accept no responsibility for information provided to me and relied upon within my assessment which is not accurate.
Land AreasPUNT ROAD
Land Area (m²)
474 Punt Road, South Yarra 356412-414 Punt Road, South Yarra 538
380 Punt Road, South Yarra 230212 Punt Road, Prahran 438206 Punt Road, Prahran 412
508/508A Punt Road, South Yarra 530484-486 Punt Road, South Yarra 2,168
Street Address
URBIS MPEV-1429-001 LAND AFFECTED BY PUBLIC ACQUISITION OVERLAY 11
4.6 PUBLIC ACQUISITION OVERLAY AREA I have been provided with the areas of the PAO by Vic Roads for the majority of the properties. I have relied upon this information for the purpose of this valuation estimate. There are 11 properties where I have not been provided with PAO areas and have estimated these with the plans provided. There are a further 10 properties that I have made some amendments to areas provided.
12 TOWN PLANNING URBIS
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5 Town Planning
5.1 ZONING The following zoning information has been sourced from the Department transport, Planning and Local Infrastructure’s website (www.dtpli.vic.gov.au/planning). In accordance with both the 10 Consulting Report and my investigations, all of the land affected by the PAO is contained within the City of Stonnington. The affected properties have the following zonings:
- ‘General Residential’ Zone - ‘Residential Growth’ Zone - ‘Neighbourhood Residential’ Zone - ‘Commercial 1’ Zone.
The purpose of the ‘General Residential’ Zone is:
To encourage development that respects the neighbourhood character of the area.
To implement neighbourhood character policy and adopted neighbourhood character guidelines.
To provide a diversity of housing types and moderate growth in locations offering good access to services and transport.
The purpose of the ‘Residential Growth’ Zone is:
To provide housing at increased densities in buildings up to and including four storey buildings.
To encourage a diversity of housing types in locations offering good access to services and transport including activities areas.
To encourage a scale of development that provides a transition between areas of more intensive use and development and areas of restricted housing growth.
To allow educational, recreational, religious, community and a limited range of other non-residential uses to serve local community needs in appropriate locations.
The purpose of the ‘Neighbourhood Residential’ Zone is:
To recognise areas of predominantly single and double storey residential development.
To limit opportunities for increased residential development.
To manage and ensure that development respects the identified neighbourhood character, heritage, environmental or landscape characteristics.
To implement neighbourhood character policy and adopted neighbourhood character guidelines.
To allow educational, recreational, religious, community and a limited range of other non-residential uses to serve local community needs in appropriate locations.
The purpose of the ‘Commercial 1’ Zone is:
To create vibrant mixed use commercial centres for retail, office, business, entertainment and community uses.
To provide for residential uses at densities complementary to the role and scale of the commercial centre.
URBIS MPEV-1429-001 TOWN PLANNING 13
5.2 OVERLAYS All of the individual properties are affected by the Public Acquisition Overlay.
In addition, properties are also affected by Heritage Overlay, Design and Development Overlay and Special Building Overlay.
The purpose of the Public Acquisition Overlay is:
To identify land which is proposed to be acquired by an authority and reserves land for public purpose. In the instance of the subject overlay, for the purpose of road widening.
The purpose of the Heritage Overlay is:
To conserve and enhance heritage places of natural or cultural significance.
To conserve and enhance those elements which contribute to the significance of heritage places.
To ensure that development does not adversely affect the significance of heritage places.
To conserve specifically identified heritage places by allowing a use that would otherwise be prohibited if this will demonstrably assist with the conservation of the significance of the heritage place.
The purpose of the Design and Development Overlay is:
To identify areas which are affected by specific requirements relating to the design and built form of new development.
The purpose of the Special Building Overlay is:
To identify land in urban areas liable to inundation by overland flows from the urban drainage system as determined by, or in consultation with, the floodplain management authority.
To ensure that development maintains the free passage and temporary storage of flood waters, minimises flood damage, is compatible with the flood hazard and local drainage conditions and will not cause any significant rise in flood level or flow velocity.
To protect water quality in accordance with the provisions of relevant State Environment Protection Policies, particularly in accordance with Clauses 33 and 35 of the State Environment Protection Policy (Waters of Victoria).
5.3 HERITAGE CONSIDERATIONS Some of the properties are affected by Heritage Overlays, as I have not internally inspected the properties I have not made specific adjustments for heritage encumbrances or significance. In some circumstances heritage dwellings of certain significance or quality of improvement can positively or negatively impact on the value of a property.
5.4 PERMITTED USES I have not obtained a copy of any planning permit/s for the affected properties. As no lease or occupation information has been provided to me, I have undertaken my valuation estimates on the highest and best use which may not be the current use.
As noted in section 2.3 I have not taken into account any impact on compensation entitlement flowing from planning permit conditions.
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6 Improvements
6.1 OVERVIEW It was not possible for me to undertake any internal inspections of the properties affected by the overlay. I have relied upon the information provided to me along with publically available information and mapping applications in arriving at a brief overview of the improvements to each property.
In the majority of cases, I have been unable to identify the condition of each property internally. I have thus assumed the condition of each property to be average.
6.2 PHOTOGRAPHS Detailed below is a sampling of photographs of some of the properties affected by the overlay: These were taken on 20 January 2016, being the day of assessment.
PICTURE 1 –522 PUNT ROAD PICTURE 2 – 390 PUNT ROAD
PICTURE 3 – 262 PUNT ROAD PICTURE 4 –122 PUNT ROAD
URBIS MPEV-1429-001 MARKET CONSIDERATIONS 15
7 Market Considerations
7.1 RESIDENTIAL The inner city residential market has been strong over the last 18 to 24 months, on the back of a low interest rate climate, stabilised economy and strong demand for inner residential houses and apartments.
Since the start of 2015, there have been several examples of inner city dwellings selling well above expectation, with clearance rates regularly above 70% during the latter half of 2014.
Our recent enquiries reveal that a strong appetite exists for established dwellings for both investment and owner occupation with agents reporting high levels of interest at inspections and auctions throughout 2015.
Given the attributes of the subject properties, particularly the convenient access to the Melbourne CBD, arterial road network, public transport routes and shopping facilities it would be reasonable to expect a strong demand for the subject properties if put to the market.
7.2 RETAIL/COMMERCIAL Low interest rates (lower interest payments) and rising house prices (greater equity) have freed up income for consumer spending, in particular discretionary spending, which has in turn supported the retail market. Households appear to be now moving from high levels of savings to increased consumption. National retail trade growth has been strongest in both Victoria and New South Wales and is indicative of the correlation between consumer spending and movements in house prices, with the improved consumer confidence from house price rises driving an increase in spending.
Expenditure at restaurants and cafés has been the strongest component of retail trade over the past 24 months, indicating that consumer caution has diminished and also reflects the growth in fast casual dining and the increase in popularity of lane-ways as retail destinations, particularly in Melbourne’s CBD.
Local and overseas investor appetite continues to drive demand for investment properties, particularly those offered with medium to short term leases. Self-managed superannuation funds (SMSF) have also had a part to play in this market. This competition for stronger returns has put downward pressure on yields.
The office city fringe vacancy rate has risen in the six months to September 2015, from a historical tight 5.97% to 7.83%, largely due to new supply coming into the market, in particular recently in South Melbourne. Location and proximity to services continues to be a strong factor in tenant demand, with availability of modern, well positioned stock, at affordable prices levels being more favoured by tenants, to older or secondary positioned stock.
The Reserve Bank of Australia decided to leave the official cash rate on hold at 2.0 per cent at its 6 October 2015 meeting. This follows a 25 basis point reduction in May 2015 and a 25 basis point reduction in February 2015. The intent of the rate cut is to stimulate the economy, although it may take some time to determine the result on the property market.
16 MARKET CONSIDERATIONS URBIS
MPEV-1429-001
7.3 DEVELOPMENT SITES The Melbourne residential development market has been extremely strong, particularly over the past twelve to eighteen months. The existing sentiment has been assisted by a low interest rate climate, stabilised economy and increased demand for inner residential houses and apartments.
The market for residential apartment sites, particularly in the Melbourne CBD and CBD fringe, has attracted wide interest from both local and offshore developers. There have been multiple examples whereby sites have sold for prices well in excess of vendor expectations.
The strength of the development site market has seen a steady flow of sites marketed for sale, particularly over the past twelve months. The rise in prices paid for inner city housing combined with strong population projections has given developers confidence in purchasing and developing these sites.
Unquestionably, the market has been assisted by the emergence of both offshore apartment purchasers and offshore developers. It is common in the current market for projects to be majority or wholly sold to international investors, particularly out of Asia.
Whilst there has been recent strong representation from Asian developers and investors active in the Melbourne market, Urbis are of the view that those properties located within close proximity to the CBD will continue to remain sought after, particularly those benefiting from strong amenity, including access to public transport and local shops.
Interim planning controls, which were introduced in September 2015 under the central city planning review launched by the Labor Government, have introduced maximum plot ratios and in some instances restricted building height limits in the city and Southbank until an amendment to the Melbourne Planning Scheme is passed following a twelve month public consultation period. These controls significantly reduce the potential densities on city development sites, which in turn will affect value. Sites offered with the surety of development approval, particularly those with high density development approved prior to the introduction of the planning controls, are likely to be more keenly sought after by developers. There is now evidence starting to emerge of a clear premium being paid for sites with existing planning approval under the previous controls as opposed to site transacting with no planning approval which will therefore be subject to the new controls.
7.4 SALES EVIDENCE In preparing the valuation estimates for the subject properties I have researched sales evidence considered most capable of comparison.
The comparable sales evidence which I have relied upon is detailed in the 11 sales schedules contained over the following pages.
UR
BIS
M
PEV-
1429
-001
MAR
KET
CO
NSI
DER
ATIO
NS 17
7.
4.1
PU
NT
RO
AD
HO
USE
EV
IDE
NC
E –
WES
TER
N S
IDE
Sal
es E
vide
nce
PU
NT
RO
AD
DW
ELL
ING
SA
LES
- W
ES
TER
N S
IDE
1 &
2/ 9
23 P
unt R
oad,
So
uth
Yarr
a 43
9 Pu
nt R
oad,
Ri
chm
ond
235
Punt
Roa
d,
Rich
mon
d 23
7 Pu
nt R
oad,
Ri
chm
ond
561
Punt
Roa
d, S
outh
Ya
rra
311
Punt
Roa
d,
Rich
mon
d
Sal
e P
rice
$2,0
10,0
00$7
90,0
00$1
,400
,000
$1,3
92,0
00$1
,450
,000
$929
,000
Sal
e D
ate
Oct
-15
Aug-
15M
ay-1
5O
ct-1
4D
ec-1
4D
ec-1
3B
uild
ing
Area
300
sq.m
105
sq.m
201
sq.m
230
sq.m
205
sq.m
160
sq.m
Land
Are
a41
6 sq
.m19
8 sq
.m23
3 sq
.m23
2 sq
.m43
5 sq
.m16
3 sq
.mZo
ning
GR
Z1N
RZ1
GR
Z3G
RZ3
GR
Z1G
RZ3
Ove
rlays
DD
O, H
OD
DO
2, H
O36
4, L
SIO
HO
332
HO
332
HO
6H
O33
2
Anal
ysed
Bui
ldin
g Va
lue
179,
600
032
8,20
032
4,80
010
1,50
017
9,20
0An
alys
ed B
uild
ing
Rate
($/m
²)59
90
1,63
31,
412
495
1,12
0An
alys
ed la
nd V
alue
1,83
0,40
079
0,00
01,
071,
800
1,06
7,20
01,
348,
500
749,
800
Anal
ysed
land
rate
4,40
03,
990
4,60
04,
600
3,10
04,
600
Sale
Rat
e pe
r sq.
m. L
and
Area
$4
,832
$3,9
90$6
,009
$6,0
00$3
,333
$5,6
99
Com
men
ts
Form
er m
ansi
on
curr
ently
con
figur
ed a
s tw
o ap
artm
ents
, eac
h w
ith 2
bed
room
s an
d an
d 1
bath
room
. Site
ha
s re
ar la
ne a
cces
s an
d on
-site
par
king
for
thre
e ca
rs.
Sin
gle
stor
ey, s
emi-
deta
ched
Vic
toria
n co
ttage
with
3
bedr
oom
s an
d 1
bath
room
. Dw
ellin
g is
in
belo
w a
vera
ge c
ondi
tion
and
in n
eed
of fu
ll re
furb
ishm
ent.
Fully
reno
vate
d, tw
o-le
vel V
icto
rian
terr
ace
with
3 b
edro
oms,
2
bath
room
s, b
rick
pave
d co
urty
ard
and
off-s
treet
pa
rkin
g.
A th
ree
leve
l Vic
toria
n te
rrac
e w
ith 3
be
droo
ms,
stu
dy, 2
ba
thro
oms
and
base
men
t den
/sto
rage
. In
clud
es R
OW
to o
ne o
ff-st
reet
car
spa
ce.
Det
ache
d do
uble
fro
nted
dw
ellin
g w
ith
Haw
thor
n br
ick
faça
de,
4 be
droo
ms
and
1 ba
thro
om
Two
stor
ey V
icto
rian
terr
ace
in d
ated
but
go
od c
ondi
tion.
In
clud
es th
ree
bedr
oom
s, tw
o liv
ing
area
s, o
ne b
athr
oom
an
d do
uble
car
port
via
RO
W.
Pho
to
Sour
ce: U
rbis
, Rea
l Est
ate
Agen
ts
18 MA
RKE
T C
ON
SID
ER
ATIO
NS
UR
BIS
MPE
V-14
29-0
01 7.
4.3
PU
NT
RO
AD
HO
USE
EV
IDE
NC
E –
EA
STE
RN
SID
E
Sal
es E
vide
nce
PU
NT
RO
AD
SA
LES
- A
FFE
CTE
D (E
AS
TER
N S
IDE
)
344
Punt
Roa
d, S
outh
Ya
rra
214
Punt
Roa
d, P
rahr
an
350
Punt
Roa
d, S
outh
Ya
rra
368
Punt
Roa
d, S
outh
Ya
rra
378
Punt
Roa
d, S
outh
Ya
rra
206
Punt
Roa
d, P
rahr
an30
6-30
8 Pu
nt R
oad,
So
uth
Yarr
a
Sal
e P
rice
$950
,000
$850
,000
$1,5
00,0
00$8
11,0
00$6
80,0
00$1
,051
,000
$3,9
00,0
00S
ale
Dat
eD
ec-1
5Ap
r-15
May
-15
Apr-
15M
ar-1
5Fe
b-15
Sep
-14
Land
Are
a12
6 sq
.m43
3 sq
.m13
0 sq
.m24
0 sq
.m20
0 sq
.m40
4 sq
.m2,
523
sq.m
Dev
elop
able
Are
a34
sq.
m19
3 sq
.m31
sq.
m86
sq.
m46
sq.
m19
2 sq
.m1,
609
sq.m
Zoni
ngR
GZ1
RG
Z1N
RZ3
RG
Z1R
GZ1
RG
Z1R
GZ1
Ove
rlays
PAO
PAO
PAO
, HO
PAO
PAO
PAO
PAO
, SB
O
Sale
Rat
e pe
r sq.
m. L
and
Area
$7
,540
$1,9
63$1
1,53
8$3
,379
$3,4
00$2
,601
$1,5
46Sa
le P
rice
- per
Dev
elop
able
m2
$27,
941
$4,4
04$4
8,38
7$9
,430
$14,
783
$5,4
71$2
,424
Com
men
ts
A re
nova
ted
two-
leve
l Vi
ctor
ian
terr
ace
prov
idin
g 3
beds
and
1
bath
. For
mer
ly oc
cupi
ed
as a
sho
p an
d dw
ellin
g.
Pre
sent
s w
ell i
nter
nally
. S
ite is
larg
ely
affe
cted
by
PAO
and
has
rear
la
ne a
cces
s .
A se
mi-d
etac
hed,
sin
gle
stor
ey c
otta
ge w
ith 4
be
ds, 2
bat
hs. L
arge
ly un
reno
vate
d. P
erio
d fe
atur
es. I
nclu
des
rear
bu
ngal
ow.
Ren
ovat
ed 3
bed
room
Vi
ctor
ian
terr
ace
with
re
ar c
ourty
ard
and
off-
stre
et p
arki
ng v
ia re
ar
right
of w
ay. A
ffect
ed b
y P
AO.
A m
oder
n (1
995)
two
leve
l tow
nhou
se w
ith 3
be
droo
ms,
1 b
athr
oom
an
d of
f-stre
et p
arki
ng
via R
OW
lane
way
. The
dw
ellin
g is
set
bac
k 20
m fr
om th
e fro
ntag
e (n
ot in
PAO
are
a).
A tw
o st
orey
Vic
toria
n dw
ellin
g in
nee
d of
co
mpl
ete
refu
rbis
hmen
t. P
rovid
es
3 be
droo
ms,
2
bath
room
s.
Dou
ble
front
ed,
reno
vate
d 3
bedr
oom
, 2
bath
room
sin
gle
stor
ey
dwel
ling
set b
ack
from
th
e fro
ntag
e.
Cle
arw
ater
Car
was
h an
d ca
fé. C
orne
r lo
catio
n w
ith s
econ
dary
fro
ntag
e to
Arg
o S
treet
; Fu
ture
rede
velo
pmen
t po
tent
ial a
lthou
gh
affe
cted
by
PAO
. Sol
d as
a g
oing
con
cern
(u
nder
rece
ivers
hip)
.
Pho
to
Sour
ce: U
rbis
, Rea
l Est
ate
Agen
ts
UR
BIS
M
PEV-
1429
-001
MAR
KET
CO
NSI
DER
ATIO
NS 19
Sal
es E
vide
nce
PU
NT
RO
AD
SA
LES
- A
FFE
CTE
D (E
AS
TER
N S
IDE
)
114
Punt
Roa
d, W
inds
orSa
ville
Hot
el, 1
-5
Com
mer
cial
Roa
d &
270
Pu
nt R
oad,
Sou
th Y
arra
22
0 Pu
nt R
oad,
Pra
hran
500
Punt
Roa
d, S
outh
Ya
rra
122
Punt
Roa
d, W
inds
or48
0 Pu
nt R
oad,
Sou
th
Yarr
a94
-96
Punt
Roa
d,
Win
dsor
380
Punt
Roa
d, W
insd
or
Sal
e P
rice
$1,2
10,0
00$7
,352
,000
$1,1
00,0
00$9
84,0
00$8
10,0
00$5
,100
,000
$2,2
50,0
00$9
50,0
00S
ale
Dat
eAu
g-14
Jun-
14M
ay-1
4Ap
r-14
Oct
-13
Oct
-13
Apr-
13M
ar-1
3La
nd A
rea
447
sq.m
1,39
0 sq
.m33
7 sq
.m66
3 sq
.m34
0 sq
.m2,
762
sq.m
1,21
0 sq
.m23
1 sq
.mD
evel
opab
le A
rea
248
sq.m
1,14
6 sq
.m13
4 sq
.m34
3 sq
.m12
6 sq
.m2,
150
sq.m
1,16
8 sq
.m81
sq.
mZo
ning
RG
Z1R
GZ1
RG
Z1G
RZ9
RG
Z1G
RZ9
RG
Z1R
GZ1
Ove
rlays
PAO
, DD
O
PAO
PAO
, SB
OP
AOP
AO, D
DO
PAO
, DD
O, H
OP
AO, D
DO
PAO
,
Sale
Rat
e pe
r sq.
m. L
and
Area
$2
,707
$5,2
89$3
,264
$1,4
84$2
,382
$1,8
46$1
,860
$4,1
13Sa
le P
rice
- per
Dev
elop
able
m2
$4,8
87$6
,415
$8,2
40$2
,869
$6,4
29$2
,372
$1,9
27$1
1,72
8
Com
men
ts
Det
ache
d do
uble
fro
nted
dw
ellin
g w
ith4
bedr
oom
s, 2
ba
thro
oms.
Ful
ly re
nova
ted
inte
rnal
ly.
Incl
udes
off-
stre
et
park
ing
via R
OW
.
Cor
ner s
ite o
ccup
ied
as
a ho
tel,
sold
with
vac
ant
poss
essi
on fo
r 'Th
e B
lock
' ren
ovat
ing
TV
show
.
Ren
ovat
ed s
paci
ous
dwel
ling
(219
sqm
) with
4/
5 be
droo
ms,
3
bath
room
s, c
ourty
ard
and
doub
le g
arag
e.
Cor
ner s
ite w
ith g
ood
acce
ss.
Det
ache
d si
ngle
leve
l dw
ellin
g in
unr
enov
ated
co
nditi
on.
Acco
mm
odat
ion
incl
udes
4 b
edro
oms,
1
bath
room
1950
's u
nren
ovat
ed
sing
le le
vel d
wel
ling
offe
ring
3 be
droo
ms
and
1 ba
thro
om, w
ith a
se
ctio
n of
the
dwel
ling
parti
tione
d in
to a
stu
dio
apar
tmen
t. In
clud
es
doub
le g
arag
e. C
orne
r si
te.
Ger
man
Con
sula
te.
Com
pris
es a
det
ache
d tw
o-le
vel p
erio
d dw
ellin
g an
d va
cant
la
nd to
the
rear
. Sui
tabl
e to
rede
velo
pmen
t.
Two
adjo
inin
g pr
oper
ties
with
acc
ess
from
bot
h P
unt R
oad
and
Uni
on S
treet
, su
itabl
e fo
r re
deve
lopm
ent.
Cur
rent
ly be
ing
rede
velo
ped
to a
n ap
artm
ent b
uild
ing.
Ren
ovat
ed tw
o-st
orey
Vi
ctor
ian
terr
ace
(164
sqm
) with
3
bedr
oom
s, 2
bat
hroo
ms
plus
off-
stre
et p
arki
ng
for t
wo
cars
via
RO
W.
Pho
to
Sour
ce: U
rbis
, Rea
l Est
ate
Agen
ts
20 MA
RKE
T C
ON
SID
ER
ATIO
NS
UR
BIS
MPE
V-14
29-0
01 7.
4.4
HO
US
E S
ALE
S –
NE
ARB
Y
Sal
es E
vide
nce
DW
ELL
ING
SA
LES
- N
EA
RB
Y
21 N
icho
lson
Str
eet,
Sout
h Ya
rra
15 A
lbio
n St
reet
, Sou
th
Yarr
a 66
Air
lie S
tree
t, So
uth
Yarr
a 16
Ale
xand
ra S
tree
t, So
uth
Yarr
a 8
Ath
ol S
tree
t, Pr
ahra
n4
Gla
dsto
ne S
tree
t, W
inds
or7
Unio
n St
reet
, Win
dsor
67 A
lfred
Str
eet,
Prah
ran
6 Ra
lsto
n St
reet
, Sou
th
Yarr
a
Sal
e P
rice
$1,8
26,0
00$1
,355
,000
$2,1
75,0
00$1
,215
,000
$1,3
50,0
00$8
90,0
00$9
50,0
00$8
50,0
00$1
,105
,000
Sal
e D
ate
Nov
-15
Jul-1
5Ju
l-15
Jun-
15M
ay-1
5D
ec-1
4N
ov-1
4S
ep-1
4Ju
n-14
Bui
ldin
g Ar
ea11
3 sq
.mn/
a11
3 sq
.m10
3 sq
.m12
0 sq
.m10
0 sq
.m13
8 sq
.m97
sq.
m10
3 sq
.mLa
nd A
rea
302
sq.m
170
sq.m
283
sq.m
131
sq.m
210
sq.m
161
sq.m
202
sq.m
162
sq.m
188
sq.m
Zoni
ngN
RZ3
NR
Z3N
RZ1
NR
Z3N
RZ3
NR
Z3N
RZ3
NR
Z3G
RZ1
2O
verla
ysN
ilN
ilD
DO
, HO
Nil
SBO
DD
O, H
OD
DO
, SBO
SBO
, N
il
Anal
ysed
Bui
ldin
g Va
lue
$176
,000
n/a
$175
,000
$255
,000
$275
,000
$133
,300
$142
,000
$121
,000
$118
,000
Anal
ysed
Bui
ldin
g Ra
te ($
/m²)
1,55
8n/
a1,
549
2,47
62,
292
1,33
31,
029
1,24
71,
146
Anal
ysed
Lan
d Va
lue
$1,6
50,0
00n/
a$2
,000
,000
$960
,000
$1,0
75,0
00$7
56,7
00$8
08,0
00$7
29,0
00$9
87,0
00An
alys
ed L
and
Valu
e ($
/m²)
$5,4
64n/
a$7
,067
$7,3
28$5
,119
$4,7
00$4
,000
$4,5
00$5
,250
Com
men
ts
Fully
reno
vate
d,
deta
ched
wea
ther
boar
d Vi
ctor
ian
cotta
ge w
ith
thre
e be
droo
ms,
two
bath
room
s, u
pdat
ed
inte
rior,
rear
dec
k an
d of
f-stre
et c
ar s
pace
via
R
OW
.
Two
leve
l, m
oder
n to
wnh
ouse
with
3
bedr
oms
and
2 ba
thro
oms,
plu
s of
f-st
reet
par
king
to th
e fro
nt.
Fully
reno
vate
d,
elev
ated
, det
ache
d do
uble
fron
ted
dwel
ling
with
2 b
edro
oms,
1
bath
room
and
2 li
ving
area
s pl
us la
ndsc
aped
ga
rden
s.
Fully
reno
vate
d si
ngle
st
orey
dw
ellin
g w
ith 2
be
droo
ms
and
1 ba
thro
om. I
nclu
des
roof
st
orag
e an
d re
ar
cour
tyar
d.
Sin
gle
stor
ey, s
ingl
e fro
nted
Vic
toria
n co
ttage
w
ith 3
bed
room
s, 1
ba
thro
om, u
pdat
ed
inte
rior a
nd s
ide
cour
tyar
d.
Sin
gle
front
ed
Edw
ardi
an te
rrac
e w
ith
3 be
droo
ms,
1 ba
thro
om, d
ated
but
fu
nctio
nal i
nter
ior a
nd
rear
cou
rtyar
d.
Dou
ble
front
ed
Edw
ardi
an d
wel
ling
with
3
bedr
oom
s, 1
ba
thro
om, p
artia
lly
reno
vate
d in
terio
r and
la
ndsc
aped
rear
co
urty
ard.
Sin
gle
front
ed V
icto
rian
terr
ace
with
2 b
ed, 1
ba
th, d
ated
but
fu
nctio
nal i
nter
ior a
nd
one
off-s
treet
car
spa
ce
via R
OW
lane
way
.
Two
bedr
oom
, tw
o ba
thro
om, s
ingl
e fro
nted
Vic
toria
n co
ttage
w
ith b
rick
pave
d co
urty
ard.
Pho
to
Sour
ce: U
rbis
, Rea
l Est
ate
Agen
tses
t. bu
ildin
g si
ze
UR
BIS
M
PEV-
1429
-001
MAR
KET
CO
NSI
DER
ATIO
NS 21
7.
4.5
AP
AR
TME
NT
SA
LES
– P
UN
T R
OA
D
Sal
es E
vide
nce
SO
UTH
YA
RR
A A
PA
RTM
EN
TS -
PU
NT
RO
AD
5/94
3 Pu
nt R
oad,
Sou
th Y
arra
3/39
2 Pu
nt R
oad,
Sou
th Y
arra
1/95
3 Pu
nt R
oad,
Sou
th Y
arra
7/39
2 Pu
nt R
oad,
Sou
th Y
arra
1/55
9 Pu
nt R
oad,
Sou
th Y
arra
2/76
7 Pu
nt R
oad,
Sou
th Y
arra
13/7
67 P
unt R
oad,
Sou
th
Yarr
a4/
37 D
avis
Ave
nue,
Sou
th
Yarr
a1/
943
Punt
Roa
d, S
outh
Yar
ra
Sal
e P
rice
$549
,000
$527
,000
$355
,000
$515
,000
$417
,500
$465
,000
$530
,000
$503
,500
$790
,000
Sal
e D
ate
Dec
-15
Dec
-15
Nov
-15
Nov
-15
Nov
-15
Nov
-15
Nov
-15
Sep
-15
Jun-
15Ap
artm
ent S
ize (m
2 )65
sq.
m86
sq.
m45
sq.
m86
sq.
m58
sq.
m66
sq.
m73
sq.
m40
sq.
m10
4 sq
.mB
edro
oms
(No.
)2
21
21
22
12
Bat
hroo
m (N
o.)
11
11
11
11
1C
ar P
arks
(No.
)1
11
01
11
11
Sale
Pric
e - p
er m
2$8
,446
$6,1
28$7
,889
$5,9
88$7
,198
$7,0
45$7
,260
$12,
588
$7,5
96
Pho
to
Com
men
tsAn
upd
ated
two
bedr
oom
ap
artm
ent w
ithin
a
conv
erte
d Vi
ctor
ian
man
sion
. One
of o
nly
5 ap
artm
ents
.
An u
pdat
ed a
rt de
co tw
o be
droo
m a
partm
ent w
ith
com
mun
al g
arde
n ar
ea.
A 19
70's
one
bed
room
ap
artm
ent p
rese
ntin
g in
be
low
ave
rage
con
ditio
n.
With
in b
lock
of n
ine.
A re
nova
ted
art d
eco
first
flo
or tw
o be
droo
m
apar
tmen
t with
com
mun
al
gard
en a
rea.
No
car s
pace
A pa
rtial
ly up
date
d ar
t dec
o on
e be
droo
m g
roun
d flo
or
apar
tmen
t. B
enef
its fr
om
two
priva
te c
ourty
ards
.
An u
pdat
ed e
leva
ted
grou
nd
floor
apa
rtmen
t with
bal
cony
an
d ca
r spa
ce.
A pa
rtial
ly up
date
d to
p flo
or
2 be
droo
m a
partm
ent w
ith
balc
ony
and
car s
pace
.
A re
nova
ted
first
floo
r one
be
droo
m a
partm
ent w
ith
balc
ony
and
car s
pace
An u
pdat
ed g
roun
d flo
or tw
o be
droo
m a
partm
ent w
ithin
a
conv
erte
d Vi
ctor
ian
man
sion
. One
of o
nly
5 ap
artm
ents
. B
enef
its fr
om
priva
te c
ourty
ard.
Sour
ce: U
rbis
, Rea
l Est
ate
Agen
ts
22 MA
RKE
T C
ON
SID
ER
ATIO
NS
UR
BIS
MPE
V-14
29-0
01 7.
4.6
AP
RTM
EN
T SA
LES
– N
EA
RB
Y
Sal
es E
vide
nce
SO
UTH
YA
RR
A A
PA
RTM
EN
TS -
NE
AR
BY
1/4
Rals
ton
Stre
et, S
outh
Ya
rra
88/8
Per
th S
tree
t, Pr
ahra
n1/
45 C
arol
ine
Stre
et,
Sout
h Ya
rra
4/37
Dav
is A
venu
e, S
outh
Ya
rra
4/10
3 O
sbor
ne S
tree
t, So
uth
Yarr
a
Sal
e P
rice
$505
,000
$677
,500
$589
,000
$503
,500
$511
,000
Sal
e D
ate
Oct
-15
Oct
-15
Sep
-15
Sep
-15
Sep
-15
Apar
tmen
t Size
(m2 )
86 s
q.m
40 s
q.m
60 s
q.m
Bed
room
s (N
o.)
12
21
2B
athr
oom
(No.
)1
11
11
Car
Par
ks (N
o.)
11
11
1
Sale
Pric
e - p
er m
2n/
a$7
,878
n/a
$12,
588
$8,5
17
Pho
to
Com
men
tsAn
ave
rage
gro
und
floor
on
e be
droo
m a
partm
ent
with
cou
rtyar
d an
d ca
r sp
ace.
One
of n
ine.
An a
vera
ge tw
o be
droo
m
apar
tmen
t with
bal
cony
an
d ca
r spa
ce. B
enef
its
from
com
mun
al g
arde
ns
and
swim
min
g po
ol.
A da
ted,
gro
und
floor
2
bedr
oom
apa
rtmen
t with
ca
r spa
ce.
A re
nova
ted
first
floo
r one
be
droo
m a
partm
ent w
ith
balc
ony
and
car s
pace
A re
nova
ted
first
floo
r tw
o be
droo
m a
partm
ent w
ith
car s
pace
. O
ppos
ite
railw
ay li
ne
Sour
ce: U
rbis
, Rea
l Est
ate
Agen
ts
UR
BIS
M
PEV-
1429
-001
MAR
KET
CO
NSI
DER
ATIO
NS 23
7.
4.7
LAN
D S
ALE
S –
DW
ELLI
NG
S
Sal
es E
vide
nce
DW
ELL
ING
LO
T S
ALE
S -
LAN
D V
ALU
E
7 Po
rtla
nd P
lace
, Sou
th
Yarr
a 18
Mos
s St
reet
, Pra
hran
58 A
lfred
St,
Prah
ran
32 Y
ork
Stre
et, P
rahr
an33
Nic
hols
on S
tree
t, So
uth
Yarr
a 4
Com
mer
cial
Roa
d,
Prah
ran
7 He
nry
Stre
et, W
inds
or
Sal
e P
rice
$2,2
65,0
00$1
,655
,000
$1,4
85,0
00$8
65,0
00$1
,132
,000
$800
,000
$861
,000
Sal
e D
ate
Dec
-15
Dec
-15
Nov
-15
Aug-
15Fe
b-15
Apr-
15Ap
r-15
Land
Are
a46
5 sq
.m29
3 sq
.m32
5 sq
.m14
2 sq
.m24
8 sq
.m21
0 sq
.m17
7 sq
.mZo
ning
NR
Z3N
RZ3
NR
Z3N
RZ3
NR
Z3R
GZ1
NR
Z3O
verla
ysH
OS
BO
n/a
SB
OS
BO
SB
OD
DO
Sale
Rat
e pe
r sq.
m. L
and
Area
$4
,871
$5,6
48$4
,569
$6,0
92$4
,565
$3,8
10$4
,864
Com
men
ts
Dat
ed d
etac
hed
bric
k dw
ellin
g w
ith 4
be
droo
ms
in n
eed
of fu
ll re
furb
ishm
ent.
Con
side
red
to b
e cl
ose
to la
nd v
alue
. Site
has
15
met
re fr
onta
ge a
nd
has
side
abu
ttal t
o a
lane
way
.
Det
ache
d w
eath
erbo
ard
bung
alow
with
3
bedr
oom
s. B
athr
oom
is
upda
ted
whi
le th
e re
mai
ning
hou
se
pres
ents
in g
ener
ally
orig
inal
con
ditio
n.
Sem
i-det
ache
d br
ick
victo
rian
with
3
bedr
oom
s. P
rese
nts
in
aver
age
cond
ition
.
Vaca
nt la
nd w
ith
pote
ntia
l for
car
acc
ess.
D
etac
hed
3 be
droo
m, 1
ba
thro
om w
eath
erbo
ard
dwel
ling
in b
elow
av
erag
e co
nditi
on -
Clo
se to
land
val
ue.
Vaca
nt la
nd w
ith re
ar
lane
acc
ess
and
pote
ntia
l for
city
vie
ws.
An o
rigin
al s
ingl
e st
orey
dw
ellin
g w
ith 2
be
droo
ms
and
1 ba
thro
oms.
Con
side
red
to re
pres
ent c
lose
to
land
val
ue.
Pho
to
Sour
ce: U
rbis
, Rea
l Est
ate
Agen
ts
24 MA
RKE
T C
ON
SID
ER
ATIO
NS
UR
BIS
MPE
V-14
29-0
01 7.
4.8
DE
VE
LOP
ME
NT
SIT
ES
Sal
es E
vide
nce
DE
VE
LOP
ME
NT
SIT
ES
39 D
arlin
g St
reet
, Sou
th
Yarr
a28
3-28
9 Hi
gh S
tree
t, Pr
ahra
n10
8-12
6 C
omm
erci
al
Road
, Pra
hran
17 &
19
Com
mer
cial
Ro
ad, S
outh
Yar
ra10
5 Pu
nt R
oad,
Win
dsor
1-
3 Yo
rk S
tree
t, Pr
ahra
n10
98 M
alve
rn R
oad,
A
rmad
ale
103-
105
High
Str
eet,
Prah
an16
8-17
6 Hi
gh S
tree
t & 1
-5
Vic
tori
a St
reet
, Pra
hran
22-3
2 To
orak
Roa
d,
Sout
h Ya
rra
24 G
rang
e Ro
ad, T
oora
k
Sal
e P
rice
$5,9
70,0
00$5
,250
,000
$17,
500,
000
$2,4
00,0
00$8
,820
,000
$2,9
50,0
00$1
,206
,000
$6,2
50,0
00$8
,400
,000
$15,
000,
000
$7,2
00,0
00S
ale
Dat
eD
ec-1
9D
ec-1
9N
ov-1
9Ju
n-19
May
-19
Apr-
19D
ec-1
8D
ec-1
8D
ec-1
8N
ov-1
8Ap
r-18
Land
Are
a67
2 sq
.m53
7 sq
.m2,
300
sq.m
605
sq.m
1,32
2 sq
.m83
0 sq
.m35
0 sq
.m85
0 sq
.m1,
137
sq.m
1,87
5 sq
.m2,
653
sq.m
Zoni
ngG
RZ9
C1Z
C1Z
, MU
ZR
GZ1
GR
Z1G
RZ1
2G
RZ1
C1Z
C1Z
C1Z
GR
Z11
Ove
rlays
DD
O1
DD
O7,
SBO
n/a
n/a
DD
OS
BO
-D
DO
7D
DO
7, H
O12
6D
DO
7, H
O15
0-
Sale
Pric
e - p
er m
2$8
,884
$9,7
77$7
,609
$3,9
67$6
,672
$3,5
54$3
,446
$7,3
53$7
,388
$8,0
00$2
,714
Com
men
ts
Cur
rent
ly co
mpr
ises
ol
der s
tyle
apa
rtmen
t bl
ock
com
pirs
es 1
0 on
e be
droo
m a
partm
ent w
ith
lock
up
gara
ges.
Cur
ent
rent
al $
12,5
23 p
er
mon
th.
Cor
ner d
evel
opm
ent s
ite
sold
with
per
mit
for 3
1 ap
artm
ents
and
4
grou
nd fl
oor u
nits
Cor
ner d
evel
opm
ent s
ite
com
pirs
ing
thre
e re
tail/
show
room
s.
Cur
rent
inco
me
$457
,588
p.a
Cur
rent
com
pris
es tw
o pe
riod
hom
es w
ithin
R
GZ1
zon
e. B
enef
its
from
rear
acc
ess.
An a
partm
ent b
lock
of
ferin
g 20
stu
dio
apar
tmen
ts a
nd 2
0 on
e-be
droo
m a
partm
ents
, in
clus
ive o
f pla
ns a
nd
perm
its fo
r 82
apar
tmen
ts a
nd 5
1 ca
r sp
aces
.
Cur
rent
ly co
mpr
isin
g a
basi
c w
areh
ouse
. Zo
ned
GR
Z an
d co
nsid
ered
sui
tabl
e fo
r re
side
ntia
l re
deve
lopm
ent.
Vaca
nt G
RZ
land
si
tuat
ed o
n th
e so
uth
side
of M
alve
rn R
oad,
ju
st w
est o
f Gle
nfer
rie
Roa
d. L
and
size
is
rela
tivel
y sm
all.
Cur
ently
com
pris
es
rest
uran
t and
car
was
h w
ith a
n ap
prox
imat
e in
com
e of
$12
0,00
0 p.
a ,
expi
ring
in J
une
2017
. B
enef
its fr
om d
ual s
treet
fro
ntag
e to
Hig
h an
d P
ercy
stre
et.
Cur
rent
ly im
porv
ed b
y si
ngle
leve
l bric
k w
areh
ouse
. Sol
d w
ith
vaca
nt p
osse
sion
. Site
be
nefit
s fro
m tw
o st
reet
fro
ntag
es a
nd s
ide
lane
way
.
At th
e tim
e of
sal
e,
impo
rvem
ents
co
nsis
ted
of th
ree
doub
le s
tore
y re
tail
shop
s. S
old
with
per
mit
for 6
3 un
its a
nd
tow
nhou
ses,
incl
udin
g gr
ound
floo
r ret
ail w
ithin
6
stor
ey c
ompl
ex
Cor
ner d
evel
opm
ent s
ite
loca
ted
clos
e to
Too
rak
Villa
ge. G
ener
al
Res
iden
tial Z
oned
site
.
Pho
to
Sour
ce: U
rbis
, Rea
l Est
ate
Agen
ts
UR
BIS
M
PEV-
1429
-001
MAR
KET
CO
NSI
DER
ATIO
NS 25
7.
4.9
RE
TAIL
SA
LES
Sal
es E
vide
nce
RE
TAIL
159
Com
mer
cial
Rd,
Sou
th
Yarr
a19
-21
Toor
ak R
d, S
outh
Ya
rra
182
Com
mer
cial
Rd,
Pr
ahra
n21
1 C
omm
erci
al R
d, S
outh
Ya
rra
604
High
St,
Prah
ran
135
Toor
ak R
d, S
outh
Yar
ra31
8-32
6 C
hape
l St &
1-3
C
arlto
n St
, Pra
han
Sal
e P
rice
$1,5
00,0
00$3
,300
,000
$3,8
00,0
00$1
,471
,000
$1,5
10,0
00$1
,825
,000
$10,
805,
000
Sal
e D
ate
Nov
-19
Sep
-19
Jul-1
9Ju
n-19
Apr-
19O
ct-1
8Ju
l-18
Zoni
ngC
1ZC
1ZC
1ZC
1ZG
RZ1
2C
1ZC
1ZO
verla
ysD
DO
7, H
O12
6D
DO
1, D
DO
7D
DO
7, H
O12
6, IP
O3
DD
O7,
HO
126,
IPO
3, S
BO
HO
178
DD
O1,
DD
O7,
SB
O D
DO
7B
uild
ing
Area
129
sq.m
233
sq.m
371
sq.m
165
sq.m
170
sq.m
240
sq.m
1,87
1 sq
.mLa
nd A
rea
155
sq.m
336
sq.m
276
sq.m
125
sq.m
220
sq.m
153
sq.m
1,08
2 sq
.mP
assi
ng R
ent
$71,
140
$90,
205
$126
,782
$67,
600
Vaca
nt P
osse
ssio
n$8
0,04
4$4
08,0
00A
naly
sed
Rat
e/sq
m.m
.$5
51$3
87$3
42$4
10n/
a$3
34$2
18In
itial
Yie
ld4.
74%
2.73
%3.
34%
4.60
%n/
a4.
39%
3.78
%
Bldg
Rat
e ($
/m2 )
$11,
628
$14,
163
$10,
243
$8,9
15$8
,882
$7,6
04$5
,775
Land
Rat
e ($
/m2 )
$9,6
77$9
,821
$13,
768
$11,
768
$6,8
64$1
1,92
8$9
,986
Com
men
tsS
old
with
pas
sing
rent
of
appr
ox $
71,1
40 p
.a o
n 5
year
leas
e te
rm w
ith a
fu
rther
opt
ion
of 5
yea
rs.
Impr
oved
by
olde
r sty
le
doub
le s
tore
y br
ick
dwel
ling.
Sol
d w
ith p
assi
ng re
ntal
of
$90,
205
pa. F
ive
sepa
rate
te
nanc
ies.
Impr
oved
by
two
stor
ey, d
oubl
e fro
nted
old
er
styl
e bu
ildin
g. O
n-si
te
park
ing.
Sol
d w
ith p
assi
ng n
et
rent
al o
f $12
6,78
2 or
$1
35,0
00 g
ross
. C
ompi
rses
old
er s
tyle
2
stor
ey b
uild
ing
with
4
tena
ncie
s. S
ubje
ct to
C
hape
l stre
et p
reci
nct
herit
age
over
lay
Sol
d w
ith p
assi
ng n
et re
nt
of $
67,6
00 p
.a o
n 4
year
le
ase
with
two
optio
ns o
f 4
year
s. C
ompr
ises
old
er
styl
e tw
o st
orey
bui
ldin
g.
Sol
d as
vac
ant
poss
essi
on. C
ompr
ises
ol
der s
tyle
2 s
tore
y bu
ildin
g
Sol
d w
ith to
tal g
ross
rent
of
$80,
044
p.a
from
two
tena
ncie
s. C
ompr
ises
re
furb
ishe
d tw
o st
orey
bu
ildin
g.
Cor
ner s
ite s
old
with
a
pass
ing
net i
ncom
e of
$4
08,0
00 p
.a.
Impr
ovem
ents
com
pris
e 5
atta
ched
thre
e st
orey
te
rrac
e st
rip s
hops
.
Phot
o
Sour
ce: U
rbis
, Var
ious
26 MA
RKE
T C
ON
SID
ER
ATIO
NS
UR
BIS
MPE
V-14
29-0
01 7.
4.10
P
UB
AN
D H
OTE
L S
ALE
S
Sal
es E
vide
nce
PU
BLI
C H
OU
SE
S, H
OTE
LS A
ND
AC
CO
MM
OD
ATI
ON
733
Punt
Roa
d, S
outh
Yar
ra
333
Mal
vern
Roa
d, S
outh
Ya
rra
The
Prin
ce o
f Wal
es, 2
9 Fi
tzro
y St
reet
, St K
ilda
King
Dav
id S
choo
l, 11
7 Ko
oyon
g Ro
ad &
21-
23
Mun
ro S
tree
t, A
rmad
ale
Flyi
ng D
uck
Hote
l, 67
Be
ndig
o St
reet
, Pra
hran
Alb
any
Hote
l, 1-
23 M
illsw
yn
Stre
et, S
outh
Yar
raW
ater
Rat
Hot
el, 2
56 M
oray
St
reet
, Sou
th M
elbo
urne
33
9-34
1 Pu
nt R
oad,
Ri
chm
ond
62-7
4 A
rgo
Stre
et, S
outh
Ya
rra
Sal
e P
rice
$2,7
00,0
00$8
,000
,000
$45,
000,
000
$14,
500,
000
$4,3
75,0
00$1
6,40
0,00
0$2
,300
,000
$1,6
55,0
00$5
,300
,000
Sal
e D
ate
May
-15
Feb-
15Fe
b-15
Jan-
15D
ec-1
4N
ov-1
4Ap
r-14
Nov
-13
Oct
-12
Zoni
ngG
RZ1
RG
Z1C
1ZN
RZ2
GR
Z12
GR
Z1M
UZ
MU
ZR
1Z (N
ow N
RZ3
)
Ove
rlays
DD
OH
O, S
BOD
DO
, HO
HO
, IP
OD
DO
, DP
O, H
O, S
BOD
DO
and
HO
DD
O, H
OE
AO, H
OH
O
Bui
ldin
g Ar
ea71
0 sq
.m1,
421
sq.m
5,80
2 sq
.m1,
750
sq.m
540
sq.m
1,77
0 sq
.m51
3 sq
.m38
0 sq
.m86
0 sq
.m
Land
Are
a65
5 sq
.m3,
105
sq.m
4,25
0 sq
.m6,
026
sq.m
768
sq.m
2,15
2 sq
.m31
4 sq
.m30
5 sq
.m1,
407
sq.m
Pas
sing
Ren
t$1
70,0
00$3
20,0
00$2
,300
,000
Unk
now
nVa
cant
Pos
sess
ion
Vaca
nt P
osse
ssio
n Va
cant
Pos
sess
ion
Vaca
nt P
osse
ssio
n Va
cant
Pos
sess
ion
Ana
lyse
d R
ate/
sqm
.m.
$239
.44
$225
.19
$396
.42
N/a
N/a
N/a
N/a
N/a
N/a
Initi
al Y
ield
6.30
%4.
00%
5.11
%N
/aN
/aN
/aN
/aN
/aN
/a
Bldg
Rat
e ($
/m2 )
$3,8
03$5
,630
$7,7
56$8
,286
$8,1
02$9
,266
$4,4
83$4
,355
$6,1
63La
nd R
ate
($/m
2 )$4
,122
$2,5
76$1
0,58
8$2
,406
$5,6
97$7
,621
$7,3
25$5
,426
$3,7
67
Com
men
tsTw
o le
vel p
erio
d dw
ellin
g le
ased
as
a ho
stel
for 7
+7
year
s fro
m 1
/6/2
014.
Ren
t is
fixe
d fo
r the
firs
t 2 y
ears
an
d in
crea
sed
by 3
% p
.a.
ther
eafte
r. Ag
ent b
elie
ves
the
sale
pric
e is
bel
ow
mar
ket.
Sal
e ha
s ye
t to
settl
e (le
gal i
ssue
s w
ith th
e co
ntra
ct o
f sal
e).
Leon
ard
Joel
Auc
tion
Roo
ms.
Lea
sed
by a
rt au
ctio
neer
Joh
n Al
brec
ht
until
Jun
e 20
17 w
ith
optio
nal f
urth
er te
rms.
Four
leve
l bui
ldin
g le
ased
to
7 te
nant
s op
erat
ing
a pu
blic
hou
se, b
andr
oom
, re
stau
rant
, day
spa
, 39-
room
hot
el a
nd 1
50 s
pace
ca
rpar
k. T
here
is a
per
mit
for a
furth
er 6
6 ap
artm
ents
to
the
rear
car
par
k (le
ase
to th
e ca
rpar
k ex
pire
s M
arch
201
5).
Arm
adal
e H
ouse
- a
man
sion
occ
upie
d as
pr
ivate
Jew
ish
scho
ol s
old
subj
ect t
o a
two-
year
le
aseb
ack.
Pur
chas
ed b
y a
priva
te in
vest
or.
Est
ablis
hed
pub
on c
orne
r si
te, w
ith d
ual s
treet
fro
ntag
e, a
djoi
ning
Prin
ces
Gar
dens
. Sol
d w
ith v
acan
t po
sses
sion
. Inc
lude
s pu
boic
hou
se, b
istro
, bee
r ga
rden
and
firs
t flo
or
resi
denc
e. S
uita
ble
for
rede
velo
pmen
t.
The
Alba
ny H
otel
whi
ch
sold
with
pla
nnin
g ap
prov
al
for t
he re
furb
ishm
ent o
f the
dw
ellin
g an
d de
velo
pmen
t of
eig
ht h
igh
end
apar
tmen
ts.
Pur
chas
er
plan
s to
act
on
the
perm
it.
Last
sol
d in
Apr
-12
with
out
a pe
rmit
for $
13.7
mil
($6,
366
per m
2 of l
and)
.
Two
leve
l Vic
toria
n bu
ildin
g w
ith p
rom
inen
t cor
ner
posi
tioni
g, g
ood
expo
sure
an
d 36
m c
ombi
ned
front
age.
Pro
vides
pub
lic
hous
e, fu
nctio
n ro
om,
rest
aura
nt a
nd o
utdo
or
deck
. $1m
reno
vatio
n co
mpl
eted
in 2
005.
Sol
d w
ith v
acan
t pos
sess
ion.
Two
adjo
inin
g tw
o-le
vel
Vict
oria
n te
rrac
es
conf
igur
ed a
nd o
pera
ting
as a
bro
thel
, with
six
bedr
oom
s - a
ll w
ith
show
ers.
Incl
udes
par
king
to
the
rear
via
RO
W. S
uit
back
pack
ers
host
el a
nd
bout
ique
hot
el a
ltern
ative
us
es.
A la
rge
site
inco
rpor
atin
g th
e Ar
go H
otel
and
ad
join
ing
car p
ark.
The
pr
oper
ty s
old
with
vac
ant
poss
essi
on a
nd fe
atur
es
thre
e st
reet
fron
tage
s.
Pla
nnin
g ap
prov
al w
as in
pl
ace
at th
e tim
e of
sal
e fo
r a
40-a
partm
ent
deve
lopm
ent.
Phot
o
Sour
ce: U
rbis
, Var
ious
UR
BIS
M
PEV-
1429
-001
MAR
KET
CO
NSI
DER
ATIO
NS 27
7.
4.11
P
ETR
OL
STA
TIO
N A
ND
CA
RW
ASH
SAL
ES
Sal
es E
vide
nce
PE
TRO
L S
TATI
ON
/ CA
R W
AS
H
103-
105
High
Str
eet,
Prah
ran
Prah
ran
7 El
even
, 728
M
alve
rn R
oad,
Pra
hran
Mal
vern
Eas
t 7 E
leve
n, 6
09
Wav
erle
y Ro
ad, M
alve
rn
East
306-
308
Punt
Roa
d, S
outh
Ya
rra
43-4
7 Ne
pean
Hig
hway
, El
ster
nwic
k
Sal
e P
rice
$6,2
50,0
00$4
,230
,000
$2,8
50,0
00$3
,900
,000
$4,1
00,0
00
Sal
e D
ate
Jan-
15Au
g-14
Aug-
14Ja
n-14
Jan-
14
Zoni
ngC
1ZR
GZ2
GR
Z7R
GZ1
C2Z
Ove
rlays
DD
O7
Nil
Nil
PAO
, SBO
Bui
ldin
g Ar
ea77
0 sq
.m55
0 sq
.m55
0 sq
.m61
0 sq
.m35
6 sq
.m
Land
Are
a85
0 sq
.m2,
015
sq.m
1,21
2 sq
.m2,
500
sq.m
2,21
2 sq
.m
Pas
sing
Ren
t$1
20,0
00$1
74,3
53$1
29,3
59N
/a$1
75,0
83A
naly
sed
Rat
e/sq
m.m
.$1
56$3
17$2
35N
/a$4
92In
itial
Yie
ld1.
92%
4.12
%4.
54%
N/a
4.27
%
Bldg
Rat
e ($
/m2 )
$8,1
17$7
,691
$5,1
82$6
,393
$11,
517
Land
Rat
e ($
/m2 )
$7,3
53$2
,099
$2,3
51$1
,560
$1,8
54
Com
men
tsTw
o ad
join
ing
fact
orie
s,
one
occu
pied
as
a ca
r w
ash
and
the
othe
r as
a di
ner/r
esta
uran
t. Lo
cate
d op
posi
te S
win
burn
e U
ni.
Leas
e ex
pire
s Ju
ne 2
017.
R
ear a
cces
s via
Per
cy
Stre
et.
7 E
leve
n co
nven
ienc
e st
ore
and
petro
l sta
tion.
Lea
sed
for 1
5 yr
s fro
m S
ept 1
1, w
ith
3x5
year
opt
ions
. Ren
t in
crea
ses
by 4
% p
er
annu
m.
7 E
leve
n co
nven
ienc
e st
ore
and
petro
l sta
tion.
Lea
sed
for 1
5 yr
s fro
m J
uly
11, w
ith
3x5
year
opt
ions
. Ren
t in
crea
ses
by 4
% p
er
annu
m.
Cle
arw
ater
Car
was
h an
d ca
fé. C
orne
r loc
atio
n w
ith
seco
ndar
y fro
ntag
e to
Arg
o S
treet
; Fut
ure
rede
velo
pmen
t pot
entia
l al
thou
gh a
ffect
ed b
y P
AO.
Sol
d as
a g
oing
con
cern
(u
nder
rece
ivers
hip)
.
Cle
arw
ater
Car
was
h an
d ca
fé. C
orne
r loc
atio
n w
ith
seco
ndar
y fro
ntag
e to
Al
exan
dra
Aven
ue.
Red
evel
opm
ent p
oten
tial.
Sol
d as
a fr
eeho
ld a
nd
goin
g co
ncer
n. In
com
e is
fro
m s
igna
ge.
Phot
o
Sour
ce: U
rbis
, Var
ious
28 ECONOMIC ADVICE URBIS
MPEV-1429-001
8 Economic Advice I refer to the Memo prepared by Mark Dawson attached as Appendix C.
I have adopted the growth rates within this Memo for the purpose of assisting my estimate of the economic cost of reinstating the PAO.
The key growth rate table and 2 bullet points in this advice are;
SCENARIO 2 – ADJUSTED HOUSE/UNIT ANNUAL PRICE GROWTH OVER TIME 1 YEAR 5 YEARS 10 YEARS 15 YEARS
House Unit House Unit House Unit House Unit
Greater Melbourne 0.2% 0.1% 2.0% 1.0% 5.0% 2.5% 6.5% 3.5%
Stonnington 3.0% 1.5% 6.5% 2.0% 7.5% 4.5% 8.0% 5.0%
CPI 2.1% 2.6% 2.6% 2.5%
This scenario has been viewed on a 15 year time frame. Growth over the longer term of 35 years could be anticipated to be similar to the assumed growth rates over the 15 year time period as provided here. This is indicative only, and the further out in time that projections are provided, the more uncertain they become.
It should also be noted that this scenario presents median price growth for Stonnington as a whole. Properties within particular areas of Stonnington will experience greater/lower rates of growth than the median. With reference to the properties in question along Punt Road, it would be anticipated that these properties are likely to achieve a lower rate of growth than the Stonnington median price, since owners of these properties are less likely to invest further capital due to the PAO.
The difference between these two measures equates to the likely real house price growth which I have applied to the current market value estimates of each individual property to demonstrate the potential economic cost. The annual growth rate above CPI is 5.5% and 2.5% for houses and units respectively. As the majority of the properties are either houses or land I have adopted a growth rate of 5.5% for the purpose of this assessment.
In considering the economic cost of redevelopment in section 11, I have not grown the cost of building costs above the inflation rate. I am informed that the Building Cost Index (BCI) has historically been similar to the rate of inflation. The significant inputs to the BCI are material costs, labour costs and efficiency gains through building processes or technology.
URBIS MPEV-1429-001 VALUATION ESTIMATE 29
9 Valuation Estimate My indicative valuation assessments have been based on the information provided to me only, which I have assumed to be reasonably accurate. The Direct Comparison and Summation approaches have been utilised in my indicative desktop valuation estimates. Where appropriate I have also undertaken a capitalisation of estimated rent approach as a check method for commercial properties. I note that if occupancy details were available this may become the primary method of valuation.
I have undertaken valuation estimates for the properties as at 20 January 2016. For those properties that are not owned by VicRoads, which are to be partially acquired, I have undertaken a ‘Before’ and ‘After’ assessment. The ‘Before’ value is to be determined ignoring any impact of the acquisition. In contrast the ‘After’ value takes into account all impacts, favourable or unfavourable, resulting from the Scheme of the Acquisition.
I refer to section 2 for my detailed assumptions and qualifications in undertaking the valuation estimates. The total of the compensation estimates is summarised on the following page. If required, I can provide my detailed calculations.
I note that the total P&E Act compensation paid by VicRoads is $2,418,155. This includes $960,000 for property 15 which is a claim not yet finalised. The P&E Act compensation payments are across 41 properties. VicRoads owns 19 properties and the balance 75 properties have not had compensation paid. I understand that all but two or three of these properties are not entitled to claim compensation under the P&E Act as they have been purchased with the knowledge of the PAO.
I further note that two of the properties were compensated for Financial Loss before 14 February 1966, when Australia changed from the pound to the dollar. I have assumed that the compensation figures provided to me are in dollars. As such, there may need to be a minor adjust to the total compensation paid for these two properties, which account for $10,400 of the aforementioned total.
30 VA
LUAT
ION
EST
IMAT
E
U
RBI
S
MPE
V-14
29-0
01
S
umm
ary
of V
alue
Est
imat
esP
UN
T R
OA
D
Type
Ado
pted
Lan
d Ar
ea (m
²)Es
t. PA
O A
rea
m²
Befo
re L
and
Valu
eBe
fore
Bui
ldin
g Va
lue
Befo
re T
otal
Va
lue
Afte
r Lan
d Va
lue
Afte
r Bui
ldin
g Va
lue
Afte
r Tot
al
Valu
eCo
mpe
nsat
ion
50%
70%
90%
VicR
oads
Ow
ned
10,6
34$4
9,20
9,71
0$1
,348
,500
$50,
558,
210
No
Com
pens
atio
n P
aid*
46,6
1123
,433
$199
,880
,018
$20,
613,
450
$220
,530
,000
$79,
581,
509
$5,2
24,3
78$8
4,78
0,00
0$1
35,7
50,0
00
Loss
on
Sal
e21
,184
13,1
97$1
02,0
04,9
00$1
2,00
0,03
3$1
14,0
60,0
00$2
9,98
6,34
9$2
,577
,425
$32,
570,
000
$81,
490,
000
$40,
745,
000
$24,
447,
000
$8,1
49,0
00
Sub
tota
ls78
,429
36,6
30$3
51,0
94,6
28$3
3,96
1,98
3$3
85,1
48,2
10$1
09,5
67,8
59$7
,801
,803
$117
,350
,000
Tota
l Com
pens
atio
n*in
clud
es 2
pro
perti
es w
hich
hav
e rig
ht to
cla
im c
ompe
nsat
ion
unde
r P &
E A
ct
Whe
re P
&E
Act C
ompe
nsat
ion
Paid
URBIS MPEV-1429-001 ECONOMIC COST OF REMOVING PAO 31
10 Economic Cost of Removing PAO I have assessed the economic value of retaining the PAO and the economic cost of having to reinstate the PAO if it was removed as follows;
Retaining the PAO
In the scenario that the PAO was retained the remaining compensation to be paid would be;
VicRoads Owned properties; $0 No Compensation Paid properties; $135,750,000 Loss on Sale Properties (assuming 70% P&E Act reduction) $24,447,000 Total Payable as at 2016 (rounded) $160,200,000
The cost of acquiring the market value of the properties not owned by VicRoads as at 2016 is $160,197,000 based on the assumption that the compensation paid for the loss on sale properties equates to 70% of the compensation entitlement. The cost based on 50% and 90% P&E Act reduction is $176,500,000 and $143,900,000 respectively.
The future cost of the compulsory acquisitions in 35 years based on 5.5% annual real growth after CPI reduction is;
50% P&E Act reduction (rounded) $1,150,000,000 70% P&E Act reduction (rounded) $1,040,000,000 90% P&E Act reduction (rounded) $940,000,000
Removing the PAO
In the scenario that the PAO was abandoned I have assumed that VicRoads would sell the properties that they own and would recover the compensation paid under the P&E Act.
That VicRoads would sell their properties; $50,560,000 Less the cost of selling at say 1.5%; ($758,400) Income from recovery of P&E Act Compensation; $2,418,155 Total 2016 Income (rounded): $52,220,000
Cost of acquiring all 135 properties again (assumed the following day);
VicRoads Owned properties; $50,560,000 No Compensation Paid properties; $135,750,000 Loss on Sale Properties $81,490,000 Total Payable as at 2016 $267,798,210 Total 2016 Income (rounded): $52,220,000 Net Difference as at 2016 (rounded) $215,600,000
The net difference of removing the PAO on day 1 and compulsorily acquiring all of the properties on day 2 as at 2016 is $215,600,000.
I have assumed that in the scenario that VicRoads sells their properties that this income would be used for other projects and would not be reinvested to be used in 35 years’ time
The future cost of acquiring $267,798,210 in 35 years at 5.5% $1,744,390,000 Less 2016 Income $52,220,000 Total Future Cost to Acquire (Rounded) $1,690,000,000
32 ECONOMIC COST OF REMOVING PAO
Difference
The difference between the value of retaining the PAO and removing it is;
As at 2016
50% P&E Act reduction $215,600,000 less $176,500,000 $39,100,000 70% P&E Act reduction $215,600,000 less $160,200,000 $55,400,000 90% P&E Act reduction $215,600,000 less $143,900,000 $71,700,000
As at 2051
50% P&E Act reduction $1,690,000,000 less $1,150,000,000 $540,000,000 70% P&E Act reduction $1,690,000,000 less $1,040,000,000 $650,000,000 90% P&E Act reduction $1,690,000,000 less $940,000,000 $750,000,000
URBIS MPEV-1429-001 ECONOMIC COST OF REDEVELOPMENT 33
11 Economic Cost of Redevelopment I have been instructed to assess the cost of compensation in the event that the PAO is removed from the subject properties together with all supporting Government strategic planning or similar documents which could be construed as constituting a proposed reservation. This requires me to consider what level of redevelopment could occur on the subject properties over a 35 year time period and the potential impact on the economic cost of reinstating the PAO.
I have been advised that the properties currently have 41,856 m2 of buildings over 78,429m2 of land, reflecting a plot ratio of 0.53:1. I note that the majority of the Vic Roads owned properties are predominantly vacant land used for car parks.
Mr Rob Milner’s advice indicates that a significant proportion of the properties zoned Residential Growth could be redeveloped for townhouse or apartment buildings of between 2 to 4 storeys. As such, plot ratios of 2:1 to 3:1 could be achieved for these properties.
For the purpose of this assessment I have assumed that 50% of the properties would be redeveloped over 35 years and have a plot ratio increase from 0.53:1 to 2.5:1, based on Mr Milner’s average range. My calculation is as follows;
Total land Area 78,429m2 land area Assume 50% is redeveloped 39,215m2 of land area Current Plot Ratio 0.53:1 20,784m2 of building area Potential Plot Ratio of 2.5:1 98,038m2 of building area
My current average building value estimate for dwellings is $750 per m2. I consider that this would change to $1,000 per m2 based on the same level of deprecation but for denser townhouse or apartment product. This could result in a value up lift of;
Current buildings – 20,784m2 @ $750 per m2 $15,588,000 Potential redevelopment – 98,038m2 @ $1,000 per m2 $98,038,000 Potential Increase in building value (2051 $) $82,450,000
As discussed in section 8 Economic Advice, I have not grown the potential increase in building value above the CPI.
This figure would be on top of the 2051 economic cost of removing the PAO as discussed in Section 10.
34 ECONOMIC COST SUMMARY
12 Economic Cost Summary Based on the foregoing assumptions I have assessed the economic value of retaining the PAO and the economic cost of having to reinstate the PAO if it was removed as follows
2016 $ 2051 $ 50% P&E Act reduction $39,100,000 $540,000,000 70% P&E Act reduction $55,400,000 $650,000,000 90% P&E Act reduction $71,700,000 $750,000,000
Potential impact of redevelopment (2051 $) $82,450,000
I have made all the inquiries that I believe are desirable and appropriate and no matters of significance which I regard as relevant to my knowledge been withheld from the Panel.
I advise that this Report and Valuation Estimates is only for the use of the party to whom it is addressed, and no responsibility or liability is accepted to any third party for the whole or any part of its contents.
Urbis Valuations Pty Ltd
Andrew Kinnaird Director and Certified Practising Valuer Australian Property Institute Member No 62804
URBIS MPEV-1429-001 DISCLAIMER 35
Disclaimer This report is dated February 2016 and incorporates information and events up to that date only and excludes any information arising, or event occurring, after that date which may affect the validity of Urbis Valuations Pty Ltd’s (Urbis) opinion in this report. Urbis prepared this report on the instructions, and for the benefit only, of The Body Norton Rose Fulbright on behalf of VicRoads (Instructing Party) for the purpose of Valuation Report (Purpose) and not for any other purpose or use. To the extent permitted by applicable law, Urbis expressly disclaims all liability, whether direct or indirect, to the Instructing Party which relies or purports to rely on this report for any purpose other than the Purpose, and to any other person which relies or purports to rely on this report for any purpose whatsoever (including the Purpose).
In preparing this report, Urbis was required to make judgements which may be affected by unforeseen future events, the likelihood and effects of which are not capable of precise assessment.
All surveys, forecasts, projections and recommendations contained in or associated with this report are made in good faith and on the basis of information supplied to Urbis at the date of this report, and upon which Urbis relied. Achievement of the projections and budgets set out in this report will depend, among other things, on the actions of others over which Urbis has no control.
Whilst Urbis has made all reasonable inquiries it believes necessary in preparing this report, it is not responsible for determining the completeness or accuracy of information provided to it. Urbis (including its officers and personnel) is not liable for any errors or omissions, including in information provided by the Instructing Party or another person or upon which Urbis relies, provided that such errors or omissions are not made by Urbis recklessly or in bad faith.
This report has been prepared with due care and diligence by Urbis and the statements and opinions given by Urbis in this report are given in good faith and in the reasonable belief that they are correct and not misleading, subject to the limitations above.
Liability limited by a scheme approved under Professional Standards Legislation.
APPENDICES URBIS
MPEV-1429-001
Appendix A Letter of Instruction
URBIS MPEV-1429-001 APPENDICES
Appendix B Qualifications and Experience
Andrew Kinnaird Director Professional Details and Qualifications
Full Name: Andrew Paul Kinnaird
Practice: Urbis Valuations Pty Ltd Level 12/120 Collins Street Melbourne Vic 3000
Occupation: Director Urbis Valuations Pty Limited (trading as Urbis)
Qualifications: AAPI (Associate of the Australian Property Institute) Certified Practising Valuer – Member No. 62804 Bachelor of Business (Property) with Distinction – RMIT
Associations Current Member – Australian Property Institute Admissions Subcommittee, joined August
2012 Member 2009-2011, Property Council of Australia Residential Developers Committee Western Australia Land Valuers Licensing Board No. LV44537, date first license granted 13
January 2011
Experience Became a Certified Practising Valuer in September 2003 and have the following experience in the valuation of Residential, Industrial and Commercial and other forms of Real Estate throughout Victoria; Residential and Industrial Sub-divisional Land, Infill Development Sites
Valuation and consultancy advice for Acquisition and Disposal, Rating and Tax, Compensation and Mortgage Purposes, and
Experienced in assessing the impacts on land value of properties with a Growth Areas Infrastructure Contribution liability.
Feasibility analysis, and Margin Scheme Valuations, and Market research
Expert Evidence and Conferences Provided Expert Evidence in J&G Knowles and Associates Pty Ltd and Owners Corporation
RP12247 (plus 30 more respondents) – VCAT Reference OC2088/2013. Gave Expert Evidence to the Planning Panel on behalf of the Metropolitan Planning
Authority for the Wyndham North Development Contributions Plan in December 2013. Provided Expert Evidence in Broadcast Australia Pty Ltd and Valuer General (2011)
WASAT 58. Involved in a numerous mediations and compulsory conferences for a range of purposes.
Professional Details and Qualifications
Page 2
Development Contributions Plan Valuations Prepared Development Contribution Plan Valuations on behalf of the Metropolitan Planning
Authority for various Precinct Structure Plans, and Advised land owners in a number of Development Contributions Plan areas of values. Sat on the Metropolitan Planning Authority Advisory Panel which introduced the Public Land
Equalisation Method of Valuation for Development Contribution Plans.
Acquisition and Compensation Valuations on behalf of both owners and Authorities for compulsory acquisition purposes
e.g. road widening (VicRoads), railways (Regional Rail Link) educational sites (Department of Education), retarding basins (Melbourne Water) and land within the Western Grassland Reserve, and
Gave a presentation to the Australian Property Institute Swan Hill Conference on compulsory acquisition issues in November 2014.
Industrial, Retail and Commercial Valuation and consultancy advice for Acquisition and Disposal, Rating and Tax,
Compensation and Mortgage Purposes, and Experience in rental assessments, negotiations and Determinations.
Contact
tel: 61 3 8663 4888 fax: 61 3 8663 4999 email: [email protected]
mobile and after hours: 0405 128 040
Date this document was prepared: 1 February 2016
APPENDICES URBIS
MPEV-1429-001
Appendix C Economic Memo
Punt Road_EMR Component_160129\
Memo (Internal Use Only)
To: Andrew Kinnaird
From: Mark Dawson
Email: [email protected]
Date: 28 January 2016
Subject: Punt Road – Economic Advice
Dear Andrew,
Long Term Housing Market Conditions
This memo presents the findings of economic analysis to inform the potential growth rates of residential property that will impact upon the economic cost of removing the PAO over a 15 year period.
Research Aims and Approach
As noted in our earlier discussions, the pace of inflation is particularly hard to predict in both the short and the long term. It is subject to many influences at different times.
In providing insight into potential house price inflation Urbis has reviewed a range of historic economic indicators and forecasts. Given the many variables and influences, even these inputs must be regarded as indicative only over the longer term.
In order to provide some guidance, Urbis has: 1. Reviewed long term historic trends in house and unit prices to identify common cycles and influences. This
long term historic transaction analysis provides an evidence base from which to compare historic house price and CPI growth over various cycles.
As a starting point this provides an average growth rate that has been achieved and can be used to inform future growth prospects over time.
2. Reviewed indicators on national and state economic prospects as available from ABS, Treasury and state government as well as Urbis forecasts to understand how the rate of price growth may be affected at different times within the 15 year period.
3. Prepared a population forecast to provide an indication of anticipated future dwelling demand for the study area, which would underpin Stonnington’s ability to achieve a greater or lesser level of house price growth.
Using the information above we have provided two scenarios:
Scenario 1 – A continuation of historic rates of growth carried forward
Scenario 2 – An adjusted scenario taking into account current and forecast market conditions
Punt Road_EMR Component_160129\ Page 2
Scenario 1 – Continuation of Long Term Historic Rates of Growth Historic Trends
We have reviewed the long term historic trends in house and unit price growth for Greater Melbourne and Stonnington, and have identified the following cycles and influences. Melbourne Market
Since 1995, Melbourne has experienced 5 property market cycles. The most recent cycle peaked in 2013 with a growth rate of 7.1%, which compared to previous cycles was
not particularly strong. Over the last 15 years, Melbourne has seen a compound growth rate of 7.3% per annum in the median
house price and 6.5% per annum for the median unit price. This compares to historic CPI growth over the same time period of 2.6% per annum for Greater Melbourne.
MEDIAN HOUSE PRICE GROWTH AND HOUSE COMPLETIONS – GREATER MELBOURNE
Stonnington Market
Stonnington has experienced similar peaks and troughs to the broader Melbourne market. Whilst Stonnington has at times experienced some periods of much lower growth rates than Melbourne, the
peaks have been much higher which has translated to a higher growth rate over the long term. The median house price grew by 8.9% per annum over the 15 years to 2015 and the median unit price grew
by 6.6% per annum. SCENARIO 1 - HISTORIC HOUSE/UNIT PRICE GROWTH OVER TIME
1 Year 5 Years 10 Years 15 Years
House Unit House Unit House Unit House Unit
Greater Melbourne -0.9% 0.9% 2.0% 1.1% 5.5% 5.2% 7.3% 6.5%
Stonnington 12.6% 1.4% 7.9% 2.0% 7.8% 5.2% 8.9% 6.6%
Source: ABS; APM PriceFinder; Urbis
-5%
0%
5%
10%
15%
20%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Pric
e G
row
th
Est
imat
ed H
ouse
Com
plet
ions
Period (Annual)
High supply
9/11
GFC
Stimulus,FHB boosts,
rate cuts, lowsupply
Supplycoming on
Stimulusending
Punt Road_EMR Component_160129\ Page 3
MEDIAN HOUSE/UNIT PRICE GROWTH AND HOUSE/UNIT COMPLETIONS – STONNINGTON
Implied Future Growth
In the last 20 years on average, the lowest level of growth (trough) has occurred approximately 2 years after the peak growth. Currently, we are seeing a trough for Greater Melbourne, and based on historic patterns, it is expected that 2016 will see the lowest point of this trough.
Supply levels have typically lagged price growth by 1 year. It is expected that 2016 will see a high amount of supply being completed, this will lead into a softer 2017 for houses if historic patterns are relied upon.
Beyond 2017, the positive Victorian economic growth and forecast strong population growth mean that the housing market is expected to see continued growth.
For Stonnington, the stronger house price growth than Melbourne is a reflection of the quality of stock that is located in the suburbs that make up the LGA and the desirability of the area.
Based on historic rates of growth over the past 15 years, Stonnington could be expected to see median house price growth of 8.9% per annum over the next 15 years and 6.5% per annum in median unit price growth.
This growth is 6.4% per annum and 4.1% per annum respectively, above the long term forecast inflation rate of 2.5% per annum.
Source: ABS; APM PriceFinder; Urbis
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
2,500
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Pric
e G
row
th
Est
imat
ed C
ompl
etio
ns
Period (Annual)
House Completions Unit CompletionsHouse Price Growth Unit Price Growth
Punt Road_EMR Component_160129\ Page 4
Scenario 2 – Adjusted for Prevailing Economic and Market Conditions Emerging Future Prospects
Whilst historic patterns can give an indication as to future growth, there are many factors to consider in regard to the reasoning for this historic growth and whether or not these circumstances will be present in the future. We have considered some of these conditions to provide an adjusted scenario if they were to occur. National Economic Conditions
Australia’s economic growth for calendar year 2015 remained positive; marginally below trend levels in the face of a slowing world economy and, substantial decline in commodity prices.
Business investment has fallen over the past year and is expected to decline further over the coming year as mining investment adjusts to lower commodity prices. Mining investment is set to become a significant negative impact on national growth.
Government spending has lifted over the past year, providing support for the economy. Given the constraints on the public sector finances this support may not be sustained in coming quarters.
Key future risks facing the global economy include: political uncertainty and a strong euro in Europe, Japan taking a hit from weak global demand, a larger-than-expected slowdown in China and falling oil prices. The state of the global economy will be a significant driver of Australia’s performance over the medium and long term.
In the face of slower rates of growth in the national economy, low national business and consumer sentiment, the RBA has decreased interest rates to a record low of 2.0%. Any short term movement is likely to be down, however the market is expecting a gradual increase in interest rates sometime late in 2016 or even after.
State Economic Conditions
In contrast with the national sentiment the more diverse Victorian economy has performed relatively well in recent years due to strong population growth and a lack of exposure to the mining downturn. The economic outlook for Victoria remains cautiously positive again due to continued population and employment growth as well as an increase in infrastructure investment. The economy is benefitting from the low interest rate; in particular the construction sector. The low interest rate has resulted in an increase in home buyers and the low exchange rate has encouraged overseas buyer activity in the market. This increase in demand has given the housing construction industry a boost. Victoria is currently the fastest-growing economy on the eastern seaboard, overtaking NSW for the first time
since 2008. Victoria’s Gross State Product growth of 2.5% for 2014/15 exceeds the budget estimate of 2.25%.
Treasury expects growth to continue to improve towards the trend rate, driven by strengthening household consumption and higher export growth aided by the lower exchange rate.
However, a number of commentators are predicting lower growth in the housing sector as a number of factors combine to cool the market, including the tightening of lending requirements and capital controls for Chinese purchasers, as well as oncoming supply of apartments in inner Melbourne.
Economic Prospects Anticipated to Influence the Housing Market
1. CPI Forecast The Reserve Bank of Australia aims to hold inflation between 2 – 3%. In 2015, CPI was measured at 1.4%
for Melbourne. A slight increase in inflation is attributed to Australia’s terms of trade in 2016 which are increasing the price
of imported goods. Urbis forecasts that in 2016, CPI will increase to 2.1% and increase to as high as 3% in 2017 before reverting back to the long term average of 2.5% over the ensuing years.
Punt Road_EMR Component_160129\ Page 5
Forecasts for inflation remain within the RBA’s target rate which will mean that there should be limited pressure on inflation in the short term. This is positive for the property market as low interest rates have been a key driver for growth in recent years.
2. Household debt & Income Growth Household debt has increased significantly over the past 25 years. As at 2013, total household debt was
measured at $1.84 trillion, equivalent to $79,000 for every person living in Australia at that time. Since the GFC, real household debt per person has slowed. Between 2001 and 2007, real household debt
increased by 10% per annum. However from 2008, possibly as a result of the tightening in mortgage lending standards, real household debt grew at a much slower average rate of 2% per annum.
Comparing debt to income; debt increased more rapidly that household income from 1993 to 2007. Since the GFC, debt has trended in line with household income growth. As at 2013, the amount of debt owed by households was nearly 1.8 times the amount of disposable household income.
Wage growth averaged 2.6% for the year, and National Gross Household Income was 3.6%. Treasury forecasts indicate wage growth to return to the long term average of 3.5% over the medium term which should result in solid household income growth.
Stonnington Population Forecast
As at the 2011 census, there were approximately 98,850 people in the Stonnington LGA. This is forecast to grow to 133,250 by 2030.
This is growth of 24,200 residents between 2015 and 2030, representing total growth of 23% (1.2% per annum), over the 15 year period.
In 2011, the total number of occupied private dwellings was estimated at 46,800 for Stonnington, and this is estimated to have increased to 51,600 in 2015 (based on 97% of approvals having been completed).
This recent increase has seen a high amount of supply come to market and has put pressure on unit prices. This is consistent with the broader Melbourne market view that there are currently high amounts of supply
coming to market which is expected to hold unit price growth over the coming years. House price growth in Stonnington is somewhat protected from these supply numbers, since the suburbs
within the LGA are established and considered to be of high quality housing, and therefore in high demand. Population growth and the desire to live within Stonnington are expected to continue to push house prices, albeit at a lower rate than the past.
POPULATION – HISTORIC AND FORECAST FOR STONNINGTON
Source: ABS; Victoria in Future; Urbis
88,250 92,893
109,050
126,592
0
25,000
50,000
75,000
100,000
125,000
150,000
-500
500
1,500
2,500
3,500
4,500
5,500
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
Growth - Historic Growth - Forecast
Population - Historic Population - Forecast
Punt Road_EMR Component_160129\ Page 6
Implied Future Growth
The outlook for population growth in Stonnington is positive, with forecasts indicating 1.2% per annum growth over the next 15 years.
CPI and economic growth in general is expected to see an uptick over the next year or two and then reverting back to the long term target of 2.5%.
This implies stable future growth of a similar rate to what we have seen in the past. Potential for Stonnington to Outperform Melbourne Market
Desirable area in terms of amenity, proximity and connections to Melbourne infrastructure. High concentration of white collar workers, with higher level of educational attainment and earning potential. Proximity to key employment centres, in particular the growing and diverse service based economy as
opposed to the declining production industries. Road, tram and rail access as well as proximity give Stonnington enduring appeal as a place to live, close to employment opportunities.
Risks to Stonnington underperforming the Melbourne Market
The current pipeline of units in inner Melbourne, including Stonnington presents potential for unit price growth to taper off as supply is absorbed.
Houses on the other hand will remain in shorter supply given the emergence of apartment development and the lack of opportunity for major additions to detached housing stock (as can be seen from chart 2, the recent continued growth in house prices is not being met with a supply response for detached houses – this dwelling requirement is instead being met by greater volumes of unit development). If historic patterns are anything to go by, this could lead to a continued divergence between house price and unit price growth in the next few years.
UNIT SALES CYCLE - STONNINGTON
Source: APM PriceFinder; Urbis
$575,000
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
0
500
1,000
1,500
2,000
2,500
3,000
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
Period (Annual)
Median S
ale Price
Num
ber o
f Tra
nsac
tions
No. of Transactions Median Sale Price
Punt Road_EMR Component_160129\ Page 7
HOUSE SALES CYCLE - STONNINGTON
Given historic patterns of growth, the timing of peaks and troughs in accordance with supply additions, as well as the prevailing economic conditions, the table below presents an adjusted price growth scenario.
This scenario assumes the following:
Some level of mirroring from previous cycles, with 2016/17 seeing a lower rate of growth following a price peak and subsequent additions to supply; and transitioning back up towards longer term average rates over time.
Subdued global and national economic context to some extent offset by greater economic diversity and resilience in Melbourne, tempering the rate of growth in the next 2-3 years.
Continued demand from population growth in Victoria, relative attractiveness to overseas purchasers due to the lower AUD and liveability, albeit with slower rates of sale for off-the plan property due to capital controls for Chinese purchasers and tighter lending restrictions.
A slightly lower rate of growth overall in the next few years due to relatively high levels of household debt to income, but with income growth reverting back to trend rates of growth as forecast by Treasury over time.
Stonnington outperforms the Greater Melbourne average due to the white collar focus of workers/residents and a continued wider shift to the service economy in Melbourne.
House price growth exceeds unit price growth due to greater scarcity and land value appreciation.
SCENARIO 2 – ADJUSTED HOUSE/UNIT PRICE GROWTH OVER TIME 1 Year 5 Years 10 Years 15 Years
House Unit House Unit House Unit House Unit
Greater Melbourne 0.2% 0.1% 2.0% 1.0% 5.0% 2.5% 6.5% 3.5%
Stonnington 3.0% 1.5% 6.5% 2.0% 7.5% 4.5% 8.0% 5.0%
CPI 2.1% 2.6% 2.6% 2.5%
Source: APM PriceFinder; Urbis
$1,610,000
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
Period (Annual)
Median S
ale Price
Num
ber o
f Tra
nsac
tions
No. of Transactions Median Sale Price
Punt Road_EMR Component_160129\ Page 8
This scenario has been viewed on a 15 year time frame. Growth over the longer term of 35 years could be anticipated to be similar to the assumed growth rates over the 15 year time period as provided here. This is indicative only, and the further out in time that projections are provided, the more uncertain they become.
It should also be noted that this scenario presents median price growth for Stonnington as a whole. Properties within particular areas of Stonnington will experience greater/lower rates of growth than the median. With reference to the properties in question along Punt Road, it would be anticipated that these properties are likely to achieve a lower rate of growth than the Stonnington median price, since owners of these properties are less likely to invest further capital due to the PAO.
I trust this research provides useful insight into the long term rates of growth that have been achieved and an indication of how the current conditions could impact upon this rate of growth over the short to medium term.
Regards,
Mark Dawson
office
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