sydney residential communities research forecast report h2 2012

Sydney CommunitieSReseaRch & FoRecast RepoRt

www.colliers.com.au/research

Population Growth Drives DemandSydney’s outer Ring has observed remarkable change and development over the last five years due to a flourishing population base translating into the need for additional housing and the release of numerous new estates. According to the Australian Bureau of Statistics (ABS) Census, the combined population of the Hills, Blacktown, Penrith, Liverpool, Campbelltown and Camden Local Government Areas (LGAs) has grown by 7%, equivalent to an additional 71,703 people, between 2006 and 2011. A further 37,806 dwellings, including detached and attached houses plus apartments, were constructed over the five year period, equating to an 11% increase in supply levels. With an average household formation rate varying between 2.9 persons in the Campbelltown and Penrith LGAs to 3.2 persons in the Liverpool LGA the number of new dwellings developed and absorbed over the five year period varies in each Region and municipality.

there were 11,928 detached houses produced over the five year period, equivalent to 32% of the total new supply in the outer Ring. However, when the size of the detached dwelling market is analysed within the context of the total housing market, the proportion of detached dwellings represents a solid 78% of all the residential supply, only 6 percentage points (pp) down on the trend recorded in 2006. this suggests a growing market for attached dwellings and apartments in an area traditionally characterised as a detached housing market. this trend is expected to continue for the foreseeable future due to affordability constraints.

the north West Region, which encompasses the Hills and Blacktown LGAs, recorded the greatest population growth, not only in terms of actual number (39,870 persons) but also percentage change (9%), in the outer Ring between the 2006 and 2011 Census. Approximately 470,971 persons currently reside in the north West Region. this population growth has translated into a further 18,574 new dwellings being completed, equivalent to 14% growth over five years, with 40% of this supply being categorised as detached housing. the number of new detached houses produced in the north West Region rose by 7% between 2006 and 2011. overall, 80% of dwellings in this Region are defined as detached houses, down 5pp since the 2006 Census. the strength of the housing market in the north West Region has translated into strong absorption levels being recorded within the eight major estates on offer. Currently this Region has the highest sales level with 53% of all the lots sold.

Residential land MaRket indicatoRs - second halF 2012

Region average sale price sold to date Remaining Yield* number of projects

North West $375,903 5,628 4,924 8

West $257,320 1,350 2,810 4

South West $256,406 4,875 13,680 18

Total $282,503 11,853 21,414 30

SecoNd Half 2012 | reSideNTial

The Parc, KellyvilleColliers international has sold 90% of the estate.

Recent peRFoRMance oF the Residential coMMunities MaRket:

noRth west

west

south west

keY highlights

• Approximately 36% of the stock has sold in the outer Ring, equivalent to a 6pp increase over a six month period.

• the north West Region has 53% of all lots sold, followed by the Western Region with 32%.

• the outer Ring median vacant land sale price rose by 17% over six months to peak at $321,000.

* includes lots that have yet to sell and that have not been released to market.Source: Colliers international Research

the South West Region has reported the second highest population and dwelling increase between the 2006 and 2011 Census. the total population of the Liverpool, Campbelltown and Camden LGAs has grown by 25,506 persons or 7% to total 382,830. the demand for new housing ensured a further 13,530 dwellings were constructed, equivalent to 12% growth, with 34% of the new supply being detached houses. the number of new detached houses produced between 2006 and 2011 expanded by 5% and this housing type now represents 76% of all supply. At present 4,875 lots have sold in the South West Region, equivalent to 26% of the total number of lots. the total number of lots within the 18 estates in the South West Region is equivalent to more than twice the amount of supply in the north West and four times the amount offered in the West.

the Western Region provides the smallest population and as at the 2011 Census the Perth LGA encompassed 178,468 persons, equivalent to 4% growth or an additional 6,327 persons between the 2006 and 2011 Census. despite the smaller market there were a further 5,702 dwellings developed equivalent to a 10% increase. At present nearly 1,350 lots have sold in the four estates in the Western Region, equivalent to a 32% absorption rate.

Whilst the Census gives us a snapshot of the market as at 2011 the ABS building approvals data also provides an indicator as to the amount of new supply which is likely to be developed in the short/medium term. For the first six months of 2012 approximately 1,983 houses have been approved in the municipalities which encompass the outer Ring. if the current trend recorded continues over the remainder of the year then the total number of house approvals will be approximately 6% below the 2011 record of 4,200 houses. However, with the introduction of a new first home owners grant on 1 october 2012 which will double the grant to $15,000 and increase the threshold to $650,000 for new homes only, we are of the opinion that demand is likely to grow in the latter half of the year as purchasers have placed their acquisition on hold to take advantage of increased rebates. Low interest rates coupled with buyers incentives offered by developers are expected to spur buyers into the market.

“ despite a significant jump in supply levels the number of apartments sold in the Southern Precinct has grown by an exponential 121%”

Source: ABS

house appRovals in the outeR Ring oF sYdneY

0

500

1,000

1,500

2,000

2,500

3,000

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4,000

4,500

2006 2007 2008 2009 2010 2011 Jan-June2012

Num

ber

The Hills LGA Blacktown LGA Penrith LGA Liverpool LGA Campbelltown LGA Camden LGA

“ low interest rates, coupled with new government and developer incentives are expected to drive buyers into the market”

tRanspoRt and inFRastRuctuRe

in September the nSW Government released the draft nSW Long term transport master Plan. the objective of the document is to establish the course for transport policy over the next 20 year period. Whilst the document identifies new road, rail and bus services, or at best upgrades, there is no exact timing as to when the projects will commence or where the funding will be derived from. A final plan will be released in november. the following table identifies the current status of major projects which are underway at present.

collieRs inteRnational | p. 2

reSearcH & forecaST rePorT | SecoNd Half 2012 | Residential | sydney

outeR sYdneY inFRastRuctuRe update

infrastructure project location status estimated completion date current description

Rail

north West Rail Link north West Sydney. the nSW Government has confirmed the location of the stations. the first major eiS's has been lodged and the public submission process has been completed. the submissions are being assessed.

Subject to planning approval, major tunnelling work is anticipated to commence in 2014. the construction period will be approximately 8-10 years.

eight stations to be located at Cudgegong Road, Rouse Hill, Kellyville, Bella Vista, norwest, Hills Centre, Castle Hill and Cherrybrook. the Plan includes 15kms of tunnels between Bella Vista and epping plus 4,000 commuter car spaces.

South West Rail Link South West Sydney. Camden, Campbelltown and Liverpool LGAs.

Construction of the project began in August 2009 at Glenfield.

the Glenfield transport interchange is expected to be completed in 2013. the new rail line is expected to commence operation in 2016.

A 12km twin track rail line connecting Glenfield to Leppington via edmondson Park. two new stations will be added at Leppington and edmondson Park, including interchanges and commuter car parking. Glenfield Station will be upgraded and a new 700 vehicle multi-storey commuter car park will be developed at Glenfield. the commuter car park at Seddon Park in Glenfield will be extended.

macarthur turnback South West Sydney. Campbelltown LGA.

the design is currently underway and is scheduled to be completed in late 2012.

n/A. Platform 3 will be converted into a new island and fourth platform. A new 1.1km track will be constructed at macarthur Station.

Liverpool turnback and Platform

South West Sydney. Liverpool LGA.

under construction. the Liverpool turnback Project will be completed in 2013, with the new track and passenger facilities to become fully operational in 2014.

Construction of a new platform and 1.8km of new track.

Road

the northern Road, Cranebrook

north West Sydney. Penrith LGA.

detailed design phase. Construction is planned in two stages. Stage 1 of the upgrade will commence in late 2012 and be completed in 2014.

Widening of the northern Road from a two lane undivided road to a four lane divided road between Andrews Road and north of Borrowdale Way. the upgrade will be built by Lend Lease as part of their statutory approval for Jordan Springs.

Werrington Arterial Road, Claremont meadows

north West Sydney. Penrith LGA.

Contracts have been awarded to prepare the concept design and to undertake an environmental impact assessment for Stage 1.

n/A. A proposed arterial road along Kent Road/Gipps Street and Werrington Road/Christie Street to link the m4 motorway at Claremont meadows with the Castlereagh Freeway corridor at marsden Park.

Richmond Road upgrade - between Bells Creek and Vine Street west

upgrade - north West Sydney. Blacktown LGA.

the concept design and review of environmental factors were approved in April 2012.

Construction is planned in stages in conjunction with precinct development.

the widening of Richmond Road from a two to four lane road between Bells Creek and Vine Street West. Stage 1 of the proposal includes road widening to four lanes of Kent Road/Gipps Street corridor between the m4 motorway and the Great Western Highway.

Schofields Road Corridor north West Sydney. Blacktown LGA.

the detailed design for Stage 1 was completed in early 2012. the concept design and review of environmental factors for Stage 2 is expected to be on display in late 2012. A concept design and a review of environmental factors for Stage 3 are planned to be on public display in late 2014.

Stage 1 is anticipated to commence in the later half of 2012 and be completed by late 2014.

Schofields Road would be extended to Richmond Road creating a major east-west connection between Windsor and Richmond Roads. Construction would occur over three stages.

m5 South West Widening South West Sydney. Work commenced in August 2012. Late 2014. the South West motorway will be expanded from two to three lanes in each direction between Camden Valley Way and King Georges Road.

Camden Valley Way upgrade - between oran Park drive and Bringelly Road

South West Sydney. Construction is progressing at various stages along the roadway.

early 2015. the upgrade from a two to four lane road will be undertaken over three stages. the first stage will be ingleburn to Raby Roads; followed by Raby Road to oran Park drive; and then Bringelly to ingleburn Roads.

Campbelltown Road upgrade South West Sydney. Preliminary investigations have commenced.

n/A. upgrade Campbelltown Road between Hume Highway/Camden Valley Way (the Cross Roads), Casula and denham Court Road, denham Court. the road will be widenend from two to four lanes.

narellan Road, mount Annan South West Sydney. Work has commenced. n/A. the introduction of a third lane, westbound on narellan Road between the Hume Highway interchange and the Australian Botanic Gardens entrance at mount Annan.

Source: transport Construction Authority, Roads & traffic Authority, Sydney Water, draft nSW Long term transport master Plan.



outeR sYdneY inFRastRuctuRe update

infrastructure project location status estimated completion date current description

Road (cont.)

northern Road upgrade South West Sydney. Camden and Liverpool LGA.

the preliminary concept design has been displayed. the concept design will be further developed and a review of environmental factors prepared.

n/A. upgrade the road from two to four lanes road between the old northern Road, narellan and mersey Road, Bringelly.

Bringelly Road upgrade South West Sydney. Camden, Campbelltown and Liverpool LGAs.

Currently in detailed design phase. n/A. Widening of Bringelly Road from a two to a four/six lane divided road between Camden Valley Way, Leppington and the northern Road, Bringelly.

wateR

north West Growth Centre - Package 2

north West Sydney. the contract for design and construction was expected to be awarded in mid-2012.

n/A. Will include work to service parts of Box Hill, Schofields, Alex Avenue and Riverstone.

edmondson Park urban Release Area

South West Sydney. Commenced in late 2011. Catchment C is expected to be complete in late September 2012. timeframes for Catchment d and e are dependant on demand for housing and development.

Water and wastewater trunk infrastructure for Catchment C will include 0.25km of water pipeline and 1.5km of wastewater pipeline. this infrastructure will service approximately 2,000 residential lots.

Source: transport Construction Authority, Roads & traffic Authority, Sydney Water, draft nSW Long term transport master Plan.

Prepared by Colliers international Research

BaulkhamHills

Hornsby

Blacktown

Middle Sydney

Inner Sydney

Penrith

Liverpool

Camden

CampbelltownSutherland

Pittwater

sYdneY coMMunities



North West Region

Stonecutters ridge, colebeeApproximately 27% of the estate has been absorbed since 2008. noRth west Region MaRket activitY – Residential estates

estate name suburb lga Year commenced total lots sold to

dateRemaining

Yield % sold

Bunya Bungarribee Blacktown 2010 730 102 628 14%

Stonecutters ridge Colebee Blacktown 2008 840 223 617 27%

The Ponds Second Ponds Creek Blacktown 2007 3,200 2,104 1,096 66%

ropes crossing St marys Blacktown 2005 2,204 1,111 1,093 50%

Beaumont rise Beaumont Hills the Hills 2008 168 158 10 94%

Bella Vista Waters estate Bella Vista the Hills 2001 1,400 1,330 70 95%

The Parc Kellyville the Hills 2011 210 189 21 90%

New rouse Hill Rouse Hill the Hills 2007 1,800 411 1389 23%

the north West Region continues to offer eight major estates, equivalent to 32% of the outer Ring’s supply. At present 53% of the 10,552 lots have been absorbed, a 4pp increase over the last six months. this is the highest proportion of lots sold in all Regions within the outer Ring. of the total lots sold, 63% have occurred within the Blacktown LGA. the higher sales rate achieved in the Blacktown LGA is attributed to the more affordable lots provided within the municipality when compared to the Hills LGA. the Ponds is the most successful estate in the Blacktown LGA and north West Region with over 2,100 lots transacting since 2007.

Beaumont Rise, the Parc and Bella Vista have sold in excess of 90% of their total stock and all are located within the Hills LGA. the success of the first two estates is attributed to their affordable stock when compared to other estates in the Hills, for example the average sale price for a house and land package in the Parc was $570,000. in comparison the average sale price achieved for a vacant lot over 2012 in Bella Vista was $651,214.

over the last six months Ropes Crossing has recorded 198 sales, with the majority comprising of vacant lots. the estate has recorded the lowest average sale price ($205,235) in the north West region. the Parc and the new Rouse Hill have also recorded in excess of 100 transactions over the six month period.

Source: Colliers international Research



Western Region

Jordan SpringsSince 2010 nearly 500 lots have sold within this estate.

westeRn Region MaRket activitY - Residential estates


dateRemaining

Yield (%) sold

Waterside Cranebrook Penrith 2003 611 379 232 62%

Glenmore ridge Glenmore Park Penrith 2004 522 428 94 82%

Mulgoa rise Glenmore Park Penrith 2011 577 55 522 10%

Jordan Springs Werrington County Penrith 2010 2,450 488 1,962 20%


the Western Region provides 13% of the outer Ring’s supply with a total of 4,160 lots to be delivered over four estates. Approximately 32% of the stock has sold, up 6pp over a six month period. Approximately 415 lots in the Western Region have transacted since the previous report.

only 18% of the stock in Glenmore Ridge remains following the absorption of 181 lots over the last six months. this equates to a 33pp rise in the proportion of lots sold. Based on the current trend, the estate should be nearing completion within the next six months. of the 611 lots in Waterside approximately 62% of the stock has been absorbed since the estate was released in 2003. over the last six months the proportion of lots sold has increased by 20pp. the average sale price over the First Half 2012 was $244,120 in Waterside, $278,542 in Glenmore Ridge and $249,298 in Jordan Springs.



South West Region

freemans ridge, carnes Hillin excess of 200 lots have sold since 2009.


south west MaRket activitY


dateRemaining

Yield (%) sold

The Hermitage Catherine Field Camden 2011 1,400 150 1,250 11%

Manooka Valley Currans Hills Camden 2011 67 8 59 12%

The ridges elderslie Camden 2006 547 232 315 42%

Gregory Hills Gregory Hills Camden 2010 2,400 283 2,117 12%

Garden Gates mount Annan Camden 2004 730 681 49 93%

Harrington Grove narellan Camden 2008 1,100 276 824 25%

oran Park Town centre oran Park Camden 2010 5,000 600 4,400 12%

ayre Spring Farm Camden 2007 675 257 418 38%

Spring farm estate Spring Farm Camden 2007 1,048 297 751 28%

east Village Spring Farm Camden 2011 465 64 401 14%

Panorama Glenfield Campbelltown 2005 515 377 138 73%

ingleburn Gardens ingleburn Campbelltown 2008 287 74 213 26%

one Minto minto Campbelltown 2008 800 253 547 32%

freemans ridge Carnes Hill Liverpool 2009 900 212 688 24%

elizabeth Hills Cecil Hills Liverpool 2011 648 113 535 17%

Glenfield chase Glenfield Liverpool 2010 250 60 190 24%

Parkbridge middleton Grange

Liverpool 2009 723 410 313 57%

Georges fair moorebank Liverpool 2006 1,000 528 472 53%

the South West Region offers the greatest amount of competition in the outer Ring with 18 estates or a total of 18,555 lots equivalent to 56% of the outer Ring’s new supply. over the last six months, only one major estate has been released, Glenfield Chase. this new estate, in Glenfield has been well received as 24% of the 250 lots have already been absorbed.

Since the First Half 2012 the proportion of stock in the South West Region which has sold has risen by 4pp to 26%, despite total supply levels rising by 1%. Approximately 730 lots have been absorbed over the last six months.

the Camden LGA continues to dominate supply levels and offers 72% of the South West Region’s stock. over the last six months the Liverpool LGA recorded the greatest number of sales (345 lots), followed by the Camden LGA (208 lots). However, in terms of percentage sold the Campbelltown LGA currently has 44% of all stock sold, equivalent to an 11pp increase since the First Half 2012 report.

Garden Gates in mount Annan is the only estate to be nearing completion, with 93% of the 730 lots having been sold since the release in 2004. Panorama in Glenfield was released in 2005 by mirvac and has 73% of its stock absorbed. the proportion of lots sold in the other 16 estates ranges from 11% to 57%.

the average vacant land price achieved since 2011 in Panorama is $264,882. interestingly the average lot size sold has jumped from 307m² in 2011 to 538m² in the First Half 2012. Freemans Ridge has recorded an average lot size of 468m² and average sale price of $280,276 in 2012. the average sale price in Parkbridge for 2012 is $248,502 whilst the average lot size sold is 401m².



• the supply levels include lots yet to be sold/released in the Communities contained herein this report plus land releases in various stages of planning.

• Future supply levels are constantly changing as lots are absorbed, development plans are changed and new applications are lodged. the following analysis is a reflection of a point in time.

• Substantial releases due in the short/medium term include marsden Park in the north West, South edmondson Park (the former ingleburn defence site) in the South West and thornton, north Penrith (the former defence site) in the West.

• the first stage of the ‘old defence Site’ in Penrith has been approved. under the Concept Plan Landcom will deliver 900 to 1,000 homes on the site.

• edmondson Park South is located within both the Liverpool and Campbelltown Local Government Areas and is set to be released towards the end of 2012. the redevelopment will incorporate in excess of 2,200 regular residential allotments, rural residential lots, residential unit sites, commercial development sites and school sites.

• the department of Planning and infrastructure released a draft precinct plan for 463 hectares at east Leppington between July and August. east Leppington, which is located east of Camden Valley Way and north of St Andrews Road, will have the capacity for 4,000 homes, a new primary school, plus retail and recreational areas. the precinct will also benefit from being located on the South West Rail Link.

• Following community consultation and feedback, new draft plans for Box Hill and the Box Hill industrial precinct were publicly exhibited between July and August. the new draft plans include variations to housing density levels to provide 9,540 dwellings in total, the expansion of employment land toward Windsor Road allowing for 128 hectares to be delivered and modifications to riparian corridors.

• the draft development Control Plan (dCP) for edmondson Park South proposes providing more affordable housing options by decreasing the minimum lot size by 50m² to 200m², for detached and semi-detached dwellings in the general residential and mixed-use zones, which is likely to result in increased yields. this further cements the changing desire for smaller lots.

• developers will benefit from the announcement of the extension of the State infrastructure Contribution levy beyond the 30 June 2012 deadline. the nSW government will continue providing funding for 50% of necessary infrastructure costs which will assist in driving new supply.

• in the 2012/13 nSW Budget a $481 million Housing Acceleration Fund to build infrastructure necessary for new housing, particularly in Greenfield locations, was announced.

• new estates which are set to be released by Landcom in the short-term include Potts Hill (430 to 450 homes), Highcrest (175 lots) in middleton Grange and Caddens (340 lots).

New Supply Pipeline

Source: department of Planning, Cordells Construction Projects, Colliers international Research

estiMated pRopoRtion oF FutuRe supplY bY Region

South West63%

West3%

North West34%

West 3%

North West 34%South West 63%



• the following analysis includes the sales of vacant lots that have settled and been recorded on RP data as at december 2011 in the outer Ring of Sydney. Previous figures have been revised due to time lags between exchange, settlements and data availability. Sales not at arm’s length or that were sold in-one-line are excluded.

• Between 2005 and 2011 approximately 14,926 vacant lots were sold and settled in the Hills, Blacktown, Penrith, Liverpool, Campbelltown and Camden LGAs. Approximately 50% of the sales have occurred within the north West Region, with 42% of transactions within the South West.

• total outer Ring sale numbers declined by 46% over the six months to december 2011 and 33% over the year. All municipalities recorded a decrease in sale numbers.

• the Blacktown LGA has continued to record the largest market share with 41% of all sales occurring within this municipality over the six month period. Whilst the proportion of sales within the Blacktown LGA only grew by 2pp over the six months the Hills LGA reported a 15pp increase to capture 21% of all land sales.

• the median sale price for vacant lots in the outer Ring increased by 17% over the six months and 11% year on year to peak at $321,000. this is the first period of growth following two consecutive periods of decline.

• only two municipalities recorded a decline in the median lot price over the six month period. the Hills LGA continues to hold the title of the highest median lot price ($420,556) despite the figure falling by 14%

whilst the Liverpool LGA’s median lot price fell by 7%.

• despite the Campbelltown LGA median lot price recording the greatest growth over a six and twelve month basis (31% and 23%) the $265,000 price is ranked third highest of all the outer Ring municipalities.

• the Blacktown and Camden LGAs have recorded six and five periods of consecutive median lot price growth respectively. the change in median price growth has wavered in the other municipalities.

• the 450m² to 550m² lot size range continues to dominate the market with 42% of all sales falling within this category. over calendar 2011 this lot size range recorded 38% of all the sales, well below the 46% recorded in both 2008 and 2009.

• Affordability issues have resulted in increasing demand for the smaller lot. the 350m² to 450m² lot size range recorded 18% of all sales in 2011, well above the 7% of sales in this lot size range during 2005.

• in comparison demand for the 550m² to 650m² lot range has waned from 24% in 2005 to the current 15%, which has been recorded in both 2010 and 2011.

• Whilst the $200,000 to $300,000 price range has dominated since 2005, the proportion of sales has fallen from 58% in 2005 to 44% in 2011. in comparison the $300,000 to $400,000 price range currently represents 35% of the 2011 sales, up on the 26% reported in 2005. the rising cost of land will ultimately result in further demand for smaller lots.

General Land Market

0

200

400

600

800

1,000

1,200

1,400

1,600

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H105 H205 H106 H206 H107 H207 H108 H208 H109 H209 H110 H210 H111 H211

Num

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ales

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Med

ian

Sale

Pric

e

Campbelltown LGA Camden LGA Median Sale Price

Liverpool LGA Penrith LGA Blacktown LGA The Hills LGA

Source: RP data

deMand and Median sale pRices FoR vacant lots in outeR sYdneY

“outer ring median sale prices rose by 17% over a six month period to peak at $321,000”



Source: RP data

geneRal MaRket indicatoRs – vacant land

lgaMedian sale price Median sale price half Yearly annual

h111 h211 change change

The Hills $488,000 $420,556 -14% -12%

Blacktown $340,000 $344,000 1% 3%

Penrith $240,000 $250,000 4% -3%

liverpool $279,000 $260,000 -7% 0%

campbelltown $202,000 $265,000 31% 23%

camden $238,500 $255,000 7% 8%

geneRal land MaRket

Source: RP dataCampbelltown LGA 6%

Camden LGA 19%

Liverpool LGA 17%Penrith LGA 8%Blacktown LGA 35%The Hills LGA 15%

Campbelltown LGA 6%

Camden LGA 19%


Source: RP data

vacant lot tuRnoveR bY lga: 2005 to 2011 nuMbeR oF vacant lot sales bY pRice Range in outeR sYdneY

<$200k$200k-$300k$300k-$400k$400k-$500k$500k-$600k

$600k-$700k$700k-$800k$800k-$900k$900k-$1m$1m+

0

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H209 H110 H210 H111 H211

Num

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<$200k$200k-$300k$300k-$400k$400k-$500k$500k-$600k

$600k-$700k$700k-$800k$800k-$900k$900k-$1m$1m+

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H209 H110 H210 H111 H211

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• the following analysis includes the sales of new and established houses that have settled and been recorded on RP data as at december 2011 in the outer Ring of Sydney. Previous figures have been revised due to time lags between exchange, settlements and data availability. Sales not at arm’s length or that were sold in-one-line are excluded.

• Between 2005 and 2011 approximately 82,171 houses sold and settled in the Hills, Blacktown, Penrith, Liverpool, Campbelltown and Camden LGAs, approximately 5.5 times larger than the vacant land market.

• yet again the north Western Region continues to dominate sales turnover figures with 42% of all transactions occurring in this Region since 2005.

• over the Second Half 2011 the number of houses sold rose by 31% to total 7,390 whilst year on year figures show growth of 10%. All Regions recorded an increase in sales figures on a six and twelve monthly basis. the Western Region reported transactional growth of 23% over the six month period.

• All the municipalities recorded an upsurge in the number of sales over the six month period, the most notable being the Blacktown LGA (32%) followed by the Campbelltown LGA (23%).

• the Blacktown LGA also continues to dominate the outer Ring housing market and has recorded 26% of all sales since 2005, a 2pp increase over a six month period. in comparison, the Blacktown LGA vacant land market represents 35% of the outer Ring market.

• the median sale price for a house in the outer Ring declined by 3% over the Second Half 2011 and 2% over the year. this is the first annual decline recorded after five consecutive periods of growth.

• the Hills median house price peaked at $700,000 in the First Half 2011 and over the six month period weakened by 3%. despite the decline, the municipality continues to record the highest median price in the outer Ring.

• only the Penrith and Liverpool LGAs recorded an increase of 1% respectively in the median house prices over the six month period.

• unlike the vacant land market, there is no discernible movement in the level of demand for the smaller lot. this is attributed to the size of the housing market in comparison to the vacant land market.

• the $300,000 to $400,000 price range maintains the title of most popular sale bracket in 2011 with 35% of all sales in the outer Ring.

General House Market

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

H105 H205 H106 H206 H107 H207 H108 H208 H109 H209 H110 H210 H111 H211

Num

ber

of S

ales

$320,000

$340,000

$360,000

$380,000

$400,000

$420,000

$440,000

Med

ian

Sale

Pric

e

Campbelltown LGA Camden LGA Median Sale Price

Liverpool LGA Penrith LGA Blacktown LGA The Hills LGA

Source: RP data

deMand and Median sale pRices FoR houses in outeR sYdneY

“The number of home transactions in the outer ring increased by an exponential 31% over a six month period”



geneRal house MaRket

Source: RP data

geneRal MaRket indicatoRs – houses

lgaMedian sale price Median sale price half Yearly annual

h111 h211 change change

The Hills $700,000 $680,000 -3% -3%

Blacktown $417,000 $405,000 -3% 3%

Penrith $371,000 $375,000 1% 3%

liverpool $447,750 $450,000 1% 1%

campbelltown $339,975 $340,000 0% 2%

camden $444,250 $441,000 -1% 0%

• the rising cost of housing is evident when the market share by price range is analysed over time. in the calendar year 2011, 32% of all house sold in the Hills LGA were in the $600,000 to $700,000 price range, whereas in 2005 only 17% of sales fell within this price range. Furthermore in 2011, 18% of houses were priced between $500,000 and $600,000, significantly down on the 35% of sales recorded in 2005.

• in 2011 the $300,000 to $400,000 price range was most prevalent in the Blacktown LGA (36%), Campbelltown LGA (57%) and Penrith LGA (52%). the $400,000 to $500,000 dominated the Camden LGA (40%) and Liverpool LGA (42%).

H209

Num

ber

of S

ales

H110 H210 H111 H211

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

$200k-$300k$300k-$400k$400k-$500k$500k-$600k$600k-$700k$700k-$800k$800k-$900k$900k-$1m$1m+

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

H209 H110 H210

Num

ber

Number of Houses Sold By Price Range in Outer Sydney

$200k-$300k $300k-$400k $400k-$500k

Campbelltown LGA 15%

Camden LGA 7%


Campbelltown LGA 15%

Camden LGA 7%


Source: RP data Source: RP data

house tuRnoveR bY lga: 2005 to 2011 nuMbeR oF houses sold bY pRice Range in outeR sYdneY



Outlookdemand for Sydney’s outer Ring Communities in the short and medium term will be supported by population growth, low interest rates, government incentives, new infrastucture and improving levels of consumer sentiment. Supply levels continue to be constrained by fragmentation issues, infrastructure costs and financing issues associated with development sites, ensuring an oversupplied market is not foreseen in the short/medium term.

the cash rate still remains at historically low interest rates and is currently just below the medium-term average. deloitte Access economics has forecast the cash rate to decline in 2013 thus further lowering the cost of housing. Coupled with falling median prices in recent times the outer Ring Communities market is set to provide opportune buying options.

Government incentives that will further stimulate the housing market include the First Home owner Grant (new Homes) Scheme which will come into effect from 1 october 2012. the $7,000 First Home owner Grant will be replaced by a $15,000 grant in nSW and only applies to new housing. traditionally the introduction of a new government incentive brings forward demand for housing as the cost of entry to the market is eased. to take advantage of the new Scheme many first home buyers have placed there purchasing decision on hold until the 1 october 2012. the $15,000 will be reduced to $10,000 from 1 January 2014 and a spike in the number of buyers entering the market in the Second Half 2013 is expected.

Another government incentive that is driving absorption rates is the First Home—new Home Scheme which results in transfer duty exemptions on vacant blocks of land up to $350,000 and new homes valued up to $550,000. Concessions on transfer duty for to vacant blocks of land priced between $350,000 and $450,000 and new homes valued between $550,000 and $650,000 are also available. developers will seek to take advantage of the new Scheme and provide product that meets the price criteria, resulting in an increase in the number of smaller lots and house and land packages on offer. over the last five years there has been a marked change in the number of smaller lots being acquired and this is attributed to the ever increasing cost of entry in the housing market. despite the price caps associated with the government incentives Colliers international anticipates demand for the smaller lot i.e. under 450m² to continue in the long term as the cost to acquire larger lots will restrict buyers.

Financing issues surrounding either development site acquisition and long term construction projects will ensure the market is not saturated with product, however the lack of choice is likely to place additional pressures on prices. Coupled with the delays associated with the planning system, lack of suitable infrastructure to development sites and the costs associated with infrastructure levies Sydney’s outer Ring will not be faced with oversupply issues in the short/medium term. the nSW Government has recognised these issues and announced the formation of urbangrowth nSW. the objective of urbangrowth nSW is to “coordinat[e] and delive[r] on new development sites which are deemed problematic by the private sector”. demand fundamentals remain positive in the Sydney outer Ring Communities market, however supply constraints continue to impact the market placing further pressure on the market.

collieRs inteRnational

Level 12, Grosvenor Place225 George StreetSydney, nSW, 2000tel 02 9257 0222FaX 02 9347 0710

ReseaRcheR

ariel Pollarddirector | Researchtel 02 8337 6207FaX 02 8987 0107

ReseaRcheR

robert fischer director | Valuationtel 02 9840 0221 FaX 02 9761 7421

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

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

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sydney residential communities research forecast report h2 2012

Real Estate

detached housing market

westthe north west region

number of new detached

number of new dwellings

detached dwelling market

western region

attached dwellings

total housing market