SYDNEY APARTMENT MARKET UDIA NSW URBAN ICON RESEARCH BREAKFAST · sydney is the 2nd least...
Transcript of SYDNEY APARTMENT MARKET UDIA NSW URBAN ICON RESEARCH BREAKFAST · sydney is the 2nd least...
SYDNEY APARTMENT MARKETUDIA NSW URBAN ICON RESEARCH BREAKFASTPRINCESS VENTURA
AGENDA
Where are apartment developments occurring?
Who lives in apartment?
Potential apartment sites
Affordability story
Build to Rent is coming to Australia
Conclusions
WHERE ARE APARTMENT DEVELOPMENTS OCCURRING?
Apartment hotspots: 2011–2016
Renters 2016
WHO LIVES IN APARTMENTS?
APARTMENTS NOW MAKEUP 30% OF ALL DWELLINGS
27.6%
59.0%
12.8%
0.6%
30.0%
55.3%
14.0%
0.7%0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Apartment Separate House Semi-detached Other
2011 2016
+79,290
+7,720
+39,360
+3,590
AND IN THE HOTSPOTS, APARTMENTS ACCOUNT FOR 80%+ OF DWELLINGS
+1,527
+3,072+2,747
+1,946
+1,960
0%
20%
40%
60%
80%
100%
120%
Chatswood Zetland Rhodes Parramatta Chippendale
2016 Apartment (%)
2011 Apartment (%)
APARTMENTS AREN’T JUST FOR SINGLES AND COUPLES >25% OF APARTMENTS IN SYDNEY ARE OCCUPIED BY FAMILIES WITH CHILDREN
553,441 APARTMENTS IN 2016
HOUSEHOLD COMPOSITION IN APARTMENTS VARIES WIDELY BY LOCATION
0%
5%
10%
15%
20%
25%
30%
35%
40%
Chatswood Zetland Rhodes Parramatta Chippendale
Lone person household
Couples
Families with children
Group household
15%
20%
63%
2%
Apartment
Owned
Mortgage
Rented
Other
36%
40%
23%
2%
Detached
Owned
Mortgage
Rented
Other
DOMINANCE OF RENTERS LIVING IN APARTMENTS
WHAT ABOUT IN APARTMENT HOTSPOTS?
61%65%
61%
75% 75%
17%
24%28%
16% 13%
18%
8% 9% 8%10%
3% 3% 2% 1% 3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Chatswood Zetland Rhodes Parramatta Chippendale
Other (%)
Owned (%)
Mortgage (%)
Rented (%)
HOUSEHOLD INCOMES ACROSS SYDNEY ARE LOWER FOR APARTMENT DWELLERS
70%
53%
30%
47%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Apartment (%)
Detached (%)
Below Median
Above Median
BUT INCOMES IN HOTSPOTS MORE ALIGNNED WITH THE SYDNEY AVERAGE
55%49%
53%59%
63%
45%51%
47%41%
37%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Chatswood Zetland Rhodes Parramatta Chippendale
Below Median Above Median
HIGHEST SHARE OF APARTMENT DWELLERS IN HOTSPOTS ARE CHINESE-BORN
POTENTIAL APARTMENT SITES
Apartment Pipeline
Future Sites
AFFORDABILITY STORY
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
WAGES HAVE BEEN GROWING AT LESS THAN HALF OF APARTMENT PRICES
Median apartment
price growth
8.5% per annum
Wage growth
3.4% per annum
CUMULATIVE APARTMENT PRICE GROWTH OVER THE LAST 10 YEARS HAS FAROUTSTRIPPED WAGE GROWTH
100
110
120
130
140
150
160
170
180
190
200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Wage Growth Median Apartment Price Growth
SYDNEY IS THE 2ND
LEAST AFFORDABLE HOUSING MARKET IN THE WORLD
2005 2017
CITY
MEDIAN
MULTIPLE CITY
MEDIAN
MULTIPLE
1. LOS ANGELES, USA 11.2 1. HONG KONG 19.4
2. SAN DIEGO, USA 10.8 2. SYDNEY, AUSTRALIA 12.9
3. HONOLULU, USA 10.6 3. VANCOUVER, CANADA 12.6
4. VENTURA COUNTY, USA 9.6 4. SANTA CRUZ, USA 10.4
5. SAN FRANCISCO, USA 9.3 5. SAN JOSE, USA 10.3
6. MIAMI, USA 8.8 6. MELBOURNE, AUSTRALIA 9.9
7. SYDNEY, AUSTRALIA 8.5 7. SANTA BARBARA, USA 9.4
8. NEW YORK, USA 7.9 8. LOS ANGELES, USA 9.4
9. RIVERSIDE, USA 7.7 9. HONOLULU, USA 9.2
10. SAN JOSE, USA 7.4 10. SAN FRANCISCO, USA 9.1
WHAT ABOUT THE OTHER AUSTRALIAN CITIES?
2005 2017
CITY
MEDIAN
MULTIPLE CITY
MEDIAN
MULTIPLE
7. SYDNEY 8.5 2. SYDNEY 12.9
15. HOBART 6.6 6. MELBOURNE 9.9
18. ADELAIDE 6.5 34. ADELAIDE 6.6
19. MELBOURNE 6.4 38. BRISBANE 6.3
23. PERTH 6.1 39. HOBART 6.2
26. BRISBANE 6.0 48. PERTH 5.9
45. CANBERRA 4.8 51. CANBERRA 5.8
51. DARWIN 4.3 127. DARWIN 4.3
BUILD TO RENT IS COMING TO AUSTRALIA
▪ Rental yields to increase
▪ Attractive and stable risk adjusted returns RETURNS WILL BRING IN INVESTORS
▪ Speedier to develop
- No pre-sales hurdles
▪ Opportunity to leverage airspace and maintain control
- Shopping centres
- Clubs
- Train stations
NEED FOR CONTROL WILL ENTICE DEVELOPERS
▪ More balanced tenant-landlord power base
▪ Security of tenure
▪ Flexibility
▪ Responsive customer service
▪ Services and amenity options
FOR RESIDENTS IT’S ABOUT CHOICE
RENTERS ARE GROWING TO BE A FORCE TO RECKON WITH
2006 = 32%
458,740 dwellings
2011 = 32%
491,740 dwellings
2016 = 36%
574,130 dwellings
URBIS.COM.AU
WE’RE NOT OUT OF THE WOODS YET -CHALLENGES
▪ Site availability
▪ Lack of experience and credibility in operations
▪ New asset class considered a novelty by investors
CONCLUSIONS
URBIS.COM.AU
POINTS TO PONDER
1. Two-thirds of apartment dwellers are renters
2. Many families with children live in apartments >140,000
3. Future apartment locations
- Parramatta
- New train stations
- Above shopping centres and clubs
4. Affordability worsening – should we worry?
5. Build to rent is coming to a site near you!
THANK YOUPRINCESS [email protected]