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Market Report
Market Report
FAIR6724_Market_Report_297x210_FA1.indd 1 7/03/2017 3:08 PM
2UPDATED INFORMATION
Information may be subject to change from time to time and updated information can be obtained at any time by contacting Ashton Rowe on [email protected] or visiting our website, www.ashtonrowe.com.au.
DISCLAIMER
Whilst this information has been carefully compiled, no warranty or promise as to its correctness is made or intended. The information outlined within this document also represents subjective interpretation by Ashton Rowe (ACN 144 714 509) and should not be relied upon for investment decisions. Interested parties should undertake independent inquiries and investigations to satisfy themselves that any details herein are true and correct. No forecasts are being made by Ashton Rowe about potential investment returns. Past information about yield and growth does not imply that such gains or growth will be made in the future. The material in this publication is copyright. This document cannot be reproduced without the express permission of Ashton Rowe.
Date compiled February 2017.
The product and pricing information contained within this document is based on price lists and third party information obtained throughout the course of our research. This information has been verified to the best of our ability, but Ashton Rowe accept no responsibility for reliance on this information. This information has been prepared independent of the vendor and at our own discretion.
ASHTON ROWE ONLY CONDUCT RESEARCH AND DO NOT ACT AS A SALES AGENT
Ashton Rowe conduct comprehensive commercial and residential property research only. Ashton Rowe do not act as sales agents on behalf of developers or any real estate agents. Ashton Rowe are remunerated for the Market Report only.
THIS IS NOT INVESTMENT ADVICE. YOU SHOULD SEEK YOUR OWN FINANCIAL ADVICE
This report does not take into account the investment objectives, financial situation and particular needs of investors. It is important that you read the entire document and any supplementary amendments in full before making any investment decisions. It is particularly important that you consider the risk factors that could affect the financial performance of the property. You should carefully consider these factors in light of your particular investment needs, objectives and financial circumstances (including financial and taxation issues) and seek professional advice from your own professional advisors before deciding to invest.
INTEGRITY OF THE CONTENT
While Ashton Rowe believe it is unlikely that the electronic version of the report will be tampered with or altered in any way, Ashton Rowe cannot give any absolute assurance that this will not occur. Any investor in doubt concerning the validity or integrity of an electronic copy of the report should immediately request a paper copy of the document directly from Ashton Rowe.
USEFUL INFORMATION
Throughout this report certain defined terms are used. Defined terms appear in the glossary in Appendix C. All financial amounts in this report are expressed in Australian Dollars ($AUD) unless otherwise stated.
IMPORTANT NOTICES
1
CONTENTS
SECTION I EXECUTIVE SUMMARY 2
SECTION II OVERVIEW OF PROPERTY 4
SECTION III LOCATION 6
SECTION IV MARKET ANALYSIS 7
SECTION V PROJECT TEAM 10
APPENDIX A MASTER PLAN 12
APPENDIX B RENTAL APPRAISALS 14
APPENDIX C ADDITIONAL INFORMATION 16
2ASHTON ROWE IS ONE OF AUSTRALIA’S LEADING PROPERTY RESEARCH AND INVESTMENT F IRMS
SPECIALIS ING IN RES IDENTIAL PROPERTY.
This report is designed to assist potential investment buyers in the selection and understanding of suitable residential investment properties. Our experienced research analysts have conducted extensive and objective research culminating in this Market Report.
CAPITAL GROWTH (HOUSES)
LAST 3 YEARS LONG TERM FORECAST
15.2% per annum 3% per annum
The average rate of capital growth for houses in Blacktown over the last three years was 15.2% per annum, well above the 10 year average of 4.7%. The Blacktown residential housing market has outperformed the Sydney metropolitan market over the last three years by an average of 2.3% per year.1
RENTAL YIELD (HOUSES)
CURRENT AVERAGE YIELD ESTIMATED GROSS Y IELDS OF TOWNHOUSES IN THE PROJECT*
3.5% 4.0% +
Over the last 10 years, the average rental yield for houses in Blacktown was 4.7 %, slightly above the current yield of 3.5%. This yield compression has occurred throughout the Sydney market and is a result of capital value increases and historical low interest rates. The yields shown above are based on today’s market rates. Potential gross yields for houses in Fairwater are based on the current price list of dwellings in that development and rental appraisals performed by Frasers Property Management (see Appendix B).2
MARKET DRIVERS
POPULATION
GROWTH
The current population (as at 2015) in the Blacktown area is estimated at 339,328 people and has a natural increase in population of approximately 158,634 people forecast to arrive from 2016 to 2031 (average of 7,554 people per annum).
URBAN RENEWAL The aggressive planning framework of Blacktown City coupled with the state government earmarking the North West and Greater Macarthur Priority Growth corridors precinct will increase housing in the LGA (+50,000 expected) and increase net employment by approximately 45,000 jobs.
INVESTMENT The proposed 2016/17 Works Improvement Program is the largest capital expenditure works program ever considered by Blacktown City Council with proposed works valued at over $166 million – four times the amount allocated in 2011/12.
SOCIAL The demographic of the area is changing significantly. University qualified residents have increased by nearly 47% since 2006. This is a trend that we expect to continue resulting in positive social change in the broader area.
1 Ashton Rowe Research and Residex Blacktown Report October 2016.2 Ashton Rowe Research and Residex Blacktown Report October 2016. *Averaged across 2 and 3 bedroom dwellings in the project and rental appraisals provided by Frasers Property Management in the appendix.
SECTION I
EXECUTIVE SUMMARYSE
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DEVELOPMENT ESSENTIALS
ADDRESS Fairwater Boulevard Blacktown
LOCATION 12.8km North West of Parramatta CBD1.2km walk to Blacktown Train Station and Buses
DEVELOPMENT TEAM Developer: Frasers Property AustraliaBuilder: Frasers Property Australia
TOTAL DWELLINGS Comprised of terraces, freestanding homes and apartments.
F IXTURES AND F ITT INGS Fully ducted air conditioning throughout, ceiling fans, NBN and Foxtel.
*PROXIMITY TO LOCAL AMENIT IES Transport:Business Services:Retail:Café Restaurants:Community:Medical Facilities:Recreation:Education:
ExcellentExcellentExcellentExcellentExcellentExcellentExcellentExcellent
ESTIMATED RATES
(PER QUARTER)**
Council: Water:
Approximately $350 $250
FIRB APPROVAL Purchasers to apply independently
*These figures are an estimate only based on the information available at the time of preparation, being 22 October 2016 as provided by Frasers Property Australia. **Source: Blacktown City Council
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SECTION II
OVERVIEW
The project is an architecturally designed residential community predominately made up 2, 3 and 4 bedroom terraces and freestanding houses and apartments.
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Open Space
Post Office
200m Scale
Bank
Public Transport
Cinema/Theatre
Shopping
Entertainment/BarsRestaurants/Cafes
Medical
School/university
Sport/Recreation
Library
Police
Golf
As at December 2016
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PROXIMITY TO LOCAL AMENITIES
The proximity of a variety of local amenities is vital when considering the suitability of an investment property as these amenities are attractive to prospective tenants. Ashton Rowe classifies its Proximity Ratings by a combination of distance, quality and quantity on a scale of Excellent - Good - Average - Below Average.
TRANSPORT (EXCELLENT)
Blacktown Interchange 800m
M4, M7 and M2 Motorway Within minutes
RETAIL & DINING (EXCELLENT)
Blacktown Markets 6.1km
Westpoint Blacktown 1.3km
Woodcroft Shopping Centre 3.3km
Parklea Markets 7.5km
Blacktown RSL 2.0km
Parramatta Westfield 22 min
SPORT AND RECREATION (EXCELLENT)
Blacktown International Sports Park 7.7km
Sydney Motorsport Park 10.1km
Chinese Gardens Doonside 5.7km
Wet’n Wild 6.8km
Blacktown Aquatic Centre 2.6km
COMMUNITY (EXCELLENT)
Australia Post 1.6km
Police Station 1.3km
Library 10.9km
Banking 2.3km
MEDICAL FACIL IT IES (EXCELLENT)
Blacktown Hospital 2.6km
Blacktown General Practice 1.7km
EDUCATION (EXCELLENT)
UWS Nirimba Campus 5.2km
Tafe Blacktown Campus 1.9km
Blacktown Boys Public School 1.9km
Blacktown Girls Public School 1.9km
St Andrews College 2.4km
William Lawson Child Care Centre 5.0km
Approximate distance from project entrance
6
Blacktown City is a predominantly residential area with significant rural areas in the north, substantial commercial land use in the south west and scattered industrial precincts.
Bordering the North West and Greater Macarthur Priority Growth corridors, Blacktown is located 12.8km West of Parramatta CBD and is surrounded by the suburbs of Marayong (North), Lalor Park and Seven Hills (East), Prospect (South) and Doonside (West).
The suburb is connected to Sydney’s CBD via bus and rail at the Blacktown Interchange. The suburb also has direct travel in all directions via the primary freeway routes of the M4, M7 and M2.
An analysis of the jobs held by the resident population of Blacktown showed that the three most popular occupation sectors were:
• Clerical and Admin – 24,432 persons or 18% (on par with 2006)• Professionals – 23,336 persons or 17% (up from 15% in 2006)• Technicians and Trades – 18,123 persons or 13% (down from 14% since 2006)
In combination these three occupations accounted for 48% of the employed resident population. On closer analysis of the industries in which these occupations apply, the highest concentration is in Manufacturing (13%) then Healthcare (11%) and Retail Trade (11%).
As no single profession dominates the employment profile the suburb is well diversified across industries and has very little exposure to industry specific shocks.
These factors combined with low mortgage default risk (87% of residents use less than 30% of their income for mortgage repayments as at 2011) indicate that the local market is less susceptible to employment shocks.
SECTION III
LOCATIONSE
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Sydney
Parramatta
Lalor ParkMarayong
M2
M7
Doonside
M4
BLACKTOWN
Seven Hills
7SYDNEY APARTMENT MARKET ASSESSMENT
CAPITAL GROWTHSydney Metropolitan house and apartment prices outperformed nationally in recent times however begun to taper. The housing and apartment markets have shown a 1.2 % and 3.8 % gain for the year to September 2016 respectively representing an average growth of 12.9% and 10.7% over the last three years. This sound performance has taken median house and apartment prices to $1,049,500 and $691,000 respectively. This relative slow down is courtesy of increased regulation and lenders tightening their lending policies.1
RENTAL GROWTH, VACANCY AND AFFORDABILITY
RENTAL PRICE GUIDE
OUTER RING*
TWO BEDROOMS THREE BEDROOMS FOUR BEDROOMS
Median % Change Median % Change Median % Change
400 5.3% 450 4.7% 570 3.6%*Blacktown LGA resides in the outer ring **Housing NSW latest release of rental data.
Within the outer ring each segment has seen large rises in median rent since the previous year, each showing a 5.3%, 4.7% and 3.6% increase respectively. The September 2016 REINSW Vacancy Rate Survey saw availability in the inner ring decrease to 1.8% (down from 1.9%) compared to the middle and outer rings which increased to 2.1% (up from 1.6%) and 1.8% (up from 1.7%) respectively.
POLULATION, GROWTH AND SUPPLYIn the 12 months to June 2016 across the Sydney Local Government Areas there were 30,191 dwelling completions of which 9,619 were houses and 20,572 were apartments. This is an increase of 671 (7%) for houses and 2,172 (12%) for apartments over the previous 12-month period. NSW is forecast to grow approximately 100,500 people per year equating to a housing need of 38,803 dwellings (assuming average household size of 2.59 people) meaning NSW continues to be undersupplied.2
1 Ashton Rowe Research and Investment and Residex2 NSW Department of planning Housing Monitor; Australian Bureau of Statistics Cat 8731
SECTION IV
MARKET ANALYSIS SE
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BLACKTOWN SUBURB MARKET ASSESSMENT
In the 12 months to September 2016, the established housing market saw 546 sales (down from 716 in the previous 12 months) while the unit market saw 292 sales (down from 360 in the previous 12 months).3
The average rate of capital growth for houses and units in Blacktown over the last three years was 15.2% and 13% per annum, well above the 10-year average of 7.4% and 6.2% respectively. The Blacktown residential housing and unit markets have both outperformed the Sydney metropolitan housing and unit markets over the last three years by an average of 2.3% per year.4
Capital Growth Calculation: In short, the calculation methodology takes “sale pairs” for every property that has at least two sales recorded. These individual property growth rates are then combined into a complete growth rate for the chosen suburb. The development of this methodology won an international actuarial award in 1992. More recently, a paper issued by the Reserve Bank of Australia (Australian House Prices: A Comparison of Hedonic and Repeat-sales Measures, James Hansen, 2006) confirmed this methodology to be superior to those based on simple movements in median price.5
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RENTAL YIELDSThe median rental yield for houses and units in Blacktown was 3.5% and 4.7% at the end of September 2016, well below the 10-year average of 4.7% and 5.9% respectively as a result of capital values increasing faster than rentals over the same period. Despite tight rental market conditions (1.8% vacancy rate as at September 2016) yields are likely to remain subdued for the medium term.
3 Rp Data, APM and Price Finder4 Ashton Rowe Research and Investment5 Ashton Rowe Research and Investment and Residex
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CAPITAL GROWTH (apartments) – Blacktown v Sydney
years ending September 2016
SEPT 2014 SEPT 2014SEPT 2015 SEPT 2015SEPT 2016 SEPT 2016TOTAL TOTAL
Blacktown
Houses Apartments
BlacktownSydney Sydney
16.2%14.3%
27.0%
21.7%19.8%
14.3%
52.8%
44.0% 44.2%
35.6%
1.2%-1.6%3.6% 3.8%
16.9%
22.3%
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SUPPLYWithin the 12 months to September 2016 the Blacktown LGA has seen 3,730 residential dwelling approvals (979 houses and 2,751 units) while a further 12,301 (12,058 houses and 243 units) are in the pipeline subject to approval. Of greater importance, within the suburb of Blacktown itself there has only been 3,946 residential dwelling approvals (1,663 houses and 2,283 units) and 3,090 dwellings (2,632 houses and 458 units) in the pipeline subject to approval.6
Research of units currently listed for sale on the most commonly used real estate websites (www.domain.com.au and www.realestate.com.au) demonstrates a limited supply of dwellings in the Blacktown area beyond those currently being built and due for completion.
Source: Residential Approvals Blacktown City Council 12 months to September 2016.
The current population (as at 2015) in the Blacktown LGA is estimated at 339,328 people and has a natural increase in population of approximately 158,634 people forecast to arrive from 2016 to 2031 (average of 7,554 people per annum). With the current average household size in the area being 2.9 people per dwelling (which expected to fall slightly over the same period), the subject catchment area requires approximately 2,604 new dwellings (houses and units) to be built every year to support this growth.7
EMPLOYMENT GROWTHThere were 116,588 jobs located in the Blacktown City Council area in the year ending 2015 producing an astounding Gross Domestic Product of $14.2 Billion. Jobs have been steadily increasing by approximately 1.72% every year since 2002 and will continue to increase providing for another 45,000 jobs before 2036. Fuelling this growth is substantial and existing commercial and industrial precincts in the nearby region and priority growth corridors to the north and south of the area.8
6 Residential Approvals Blacktown City Council 12 months to September 20167 Blacktown City Council8 Dataset derived from the National Economics micro-simulation model, based on the ABS labour force survey.
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Houses
SUBJECT TO APPROVAL
APPROVED
Apartments
1,663
2,6322,283
458
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SECTION V
PROJECT TEAM
DEVELOPER AND BUILDER – FRASERS PROPERTY AUSTRALIA
Frasers Property Australia is one of Australia’s leading diversified property groups that has the scale and influence of an international company with the benefit of over 90 years in Australia.
RECENT AWARDS WON INCLUDE:• UDIA NSW 2016 Award for Excellence in Environmental Technology & Sustainability• NSW Award for Excellence in Residential Development• NSW Landscape Architecture Awards 2016 - Parks and Open Space
Taylor’s Walk (Artist impression only)
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The Waterfront (Artist impression only)
Centrale (Artist impression only) Discovery Point (Artist impression only)
Centrale (Artist impression only)
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APPENDIX A
MASTERPLAN
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2nd February 2017 Fairwater Sales Office Attention: Bernie Humphreys Dear Bernie RE: Rental Appraisal Fairwater Green Apartments – Blacktown I am pleased to provide you with a rental appraisal for the above property. After taking into account current market conditions and comparable brand new properties leased in the Blacktown area in the last twelve months, if the Fairwater Green Apartments were available for rental today, I anticipate gross weekly rental rates as follows: 1 Bedroom Flexi $390 - $410 per week 2 Bedroom 1 Bathroom $430 - $460 per week 2 Bedroom 2 Bathroom $450 - $480 per week 3 Bedroom $540 - $580 per week These figures are estimated gross rental amounts, as at the date of this letter and do not factor in holding costs, including council rates, water rates, strata levies and any property management fees payable on the property. I will need to re assess the estimates upon completion of the development which will enable me to consider factors such as market conditions, aspect, views and vacancy rates. This appraisal is provided for information purposes only and subject to change based on factors such as market conditions, vacancy rates and other factors unique to the above property. This appraisal should not be taken as a sworn valuation and should not be relied upon for investment or financing purposes or by a third party. Purchasers should seek advice from their own professional advisors before making any financial or investment decisions. Should you have any queries, please do not hesitate to contact me via email on [email protected]. Yours sincerely
Richard Kemp Manager, Residential Property Management Licenced Real Estate Agent (Licence No. 339360)
APPENDIX B
RENTAL APPRAISALS
THE FOLLOWING RENTAL APPRAISALS WERE CONDUCTED BY FRASERS PROPERTY.
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2nd February 2017 Fairwater Sales Office Attention: Bernie Humphreys Dear Bernie RE: Rental Appraisal The Links Collection – Blacktown I am pleased to provide you with a rental appraisal for the above property. After taking into account current market conditions and comparable brand new properties leased in the Blacktown area in the last twelve months, if the Links Collection homes were available for rental today, I anticipate gross weekly rental rates as follows: 1 Bedroom $400 - $430 per week 2 Bedroom $500 - $540 per week 3 Bedroom $590 - $630 per week 4 Bedroom $650 - $700 per week These figures are estimated gross rental amounts, as at the date of this letter and do not factor in holding costs, including council rates, water rates, strata levies and any property management fees payable on the property. I will need to re assess the estimates upon completion of the development which will enable me to consider factors such as market conditions, aspect, views and vacancy rates. This appraisal is provided for information purposes only and subject to change based on factors such as market conditions, vacancy rates and other factors unique to the above property. This appraisal should not be taken as a sworn valuation and should not be relied upon for investment or financing purposes or by a third party. Purchasers should seek advice from their own professional advisors before making any financial or investment decisions. Should you have any queries, please do not hesitate to contact me via email on [email protected]. Yours sincerely
Richard Kemp Manager, Residential Property Management Licenced Real Estate Agent (Licence No. 339360)
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APPENDIX C
ADDITIONAL INFORMATION
GLOSSARY
CAPITAL GROWTH The rise in the value of an investment. Calculated by subtracting the purchase price from the current value of the investment and expressed as a percentage.
DEVELOPER Refers to the company responsible for the development.
DEMOGRAPHIC Pertaining to the study of human population characteristics including size, growth rates, density, distribution, migration, birth rates and mortality rates.
GROSS The total amount before deductions for taxation, inflation, or any other sundry fees that may be incurred. The term gross return refers to the amount of capital growth and yield before deducting taxation, body corporate fees, inflation, and sundry expenses.
INFRASTRUCTURE Facilities that must be in place in order for a community or region to function as an economy, including transportation, communication, and provision of water and power, and the institutions needed for security, health, and education.
INVESTOR A person whose principal purpose is to invest money prudently and productively over the longer term with the investment objectives being the achievement of a reasonable return and capital appreciation to preserve purchasing power.
PRICE/SQM Calculated by dividing the value of the property by the internal area (m2). The solution is given in dollars per square metre.
REAL RETURN The return on an investment, less the reduction in its value as a result of inflation. Real rates are important as they tell you what the actual increase in value is, and how much of a return was less the effect of inflation.
APARTMENTS Refers to apartments or townhouses located within the development.
VALUATION The process of making an estimate of worth of real property or other assets for a particular purpose eg letting, purchase, sale, audit, rating, compulsory purchase or taxation, and given in a written report by a registered valuer.
YIELD The annual rate of return on an investment, expressed as a percentage of the purchase price of said investment.
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[email protected] call 13 38 38 | fairwaterliving.com.au
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