christopher’s housing boom and bust report 2014/15

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CHRISTOPHER’S HOUSING BOOM and BUST REPORT 2014/15

16 September 2014

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Report Contents

Executive Summary with Louis Christopher 4

SQM’s 2015 Dwelling Price Forecasts 5

2015 – The scenarios 6 – A Looming Bubble?

Capital City Outlook 10 – Adelaide – Hobart – Canberra – Darwin – Perth – Brisbane – Melbourne – Sydney

20 Postcodes with the Lowest Percentage of “For Sales” 21

Top 20 Fastest Income-Growth Postcodes: Tomorrow’s Hot Spots? 22

Top Twenty Tightest Vacancy Rates 24

Disclaimer 26

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Executive Summary with Louis Christopher

The current momentum experienced by the national housing market will continue well into 2015, with national dwelling prices predicted to rise between 6%–10% as an average for the capital cities. Sydney will once again be the key driver of the growth, with SQM forecasting a rise of 8%–12% for this capital city.

Low, ongoing interest rates will remain the primary driver of the capital growth with no interest rate changes expected for most of 2015.

After a slowdown in rental growth in 2014, Rents are expected to only modestly rise in 2015, with a mere 2.5% increase in rents forecasted as the average for the capital cities.

SQM Research sees four possible scenarios playing out, including a base case of no interest rate changes for the year. The second scenario is a rate cut in the first quarter of 2015. The third scenario is a rate rise late in 2015. The final scenario is one where macro prudential tools are used, which would cause a slowdown and perhaps enable the RBA to cut rates further, once employed.

We believe that a rate rise is the least likely scenario because of the economic slowdown occurring, which has been brought on by the mining downturn and subsequently, has negatively impacted upon employment and wages in Australia.

Over the last 12 months hourly labour rates grew by just 2.6% – the slowest rate of growth recorded since the recession of 1991. For some time now, SQM Research has been aware of the strong correlation between house prices and wages.

So what does this mean for house prices in this country? Simple, low income growth levels are not conducive to outperforming housing markets. Interest rate setting has become increasingly critical to economic growth and house price levels.

This means that for now, the market is being boosted by low interest rates and will continue to do so into 2015. However, beyond this the market will require a stronger economy to keep the momentum going into later 2015 and 2016.

At this point in time, we think this is unlikely unless there is a significant fall in the dollar, which would drive income growth for 2016. But in that case, such a scenario would likely force the RBA to lift rates in that year.

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2015 – The scenarios

Scenario One – Interest rates stay on hold for entire 2015

The Australian economy continues to battle with the headwinds of a strong Australian dollar and ongoing income loss, primarily due to the mining downturn entering its third year. All the while federal budget austerity (even in its mild form) continues to bite. Unemployment edges up towards seven per cent. In addition to this, the RBA – worried about a looming house price bubble keep rates steady.

After the U.S commences its first rate rise, the Australian dollar eventually starts to lower below 80 cents USD. The RBA finally gets what it has been seeking with the lower AUD, but then immediately puts out the signals that a rate hike is coming in 2016.

In this scenario, Sydney housing continues to outperform albeit at lower rates of growth from 2014. Investors, who drove the market higher over 2013 and 2014 start to become more cautious, ever worried about valuation levels, the state of the economy and a slowing rental market.

Outside Sydney, dwelling price growth is mixed with approximately the same trends observed in 2014 repeated again for most of 2015. In other words – capital growth is limited to about 5% when stripping out the Sydney results.

The smaller mining towns continue to wither away with existing property investors wondering what could have been if they sold back in 2011. Others enter into a negative equity world. Perth doesn’t suffer as badly due to its more diversified base but the market does experience a downturn all the same.

The Gold Coast continues to scratch out gains as confidence increases again in South East Queensland. Developers then move in for the kill.

Scenario Two – The RBA cuts again first quarter 2015

The fallout over the Chinese property recession looms large over the Australian economy. It aggravates a sense of built up pessimism in Australia about the economic outlook. Yet the dollar still stays stumblingly high above 90 cents. The RBA finally acts after a set of benign inflation results and another quarter of patchy economic growth. They cut rates by 25 basis points sometime in the March quarter or maybe the June quarter.

The cut in interest rates doesn’t immediately do much to the housing market, though auction clearance rates in Sydney and Melbourne rise. Later, as the dollar comes down, confidence starts to turn around and this is immediately channelled into stronger investor interest of most housing markets around Australia, particularly south East Queensland, Sydney, Melbourne and Hobart. Worries about an impending bubble burst sometime in 2016 begin to rapidly build.

Scenario Three – A rate rise later in 2015

Given the current economic outlook, this now seems an unlikely scenario but one that cannot be ruled quite yet. China stimulates its housing market and confidence is then in part restored, which sends commodity prices such as iron ore shooting up again. In the meantime, the U.S lifts interest rates sometime mid-year which keeps a lid on our Australian dollar. This two-pronged stimulation for our economy results in a massive return to confidence in about the third quarter of the year. At the end of the year, facing an ongoing rapid rise of house prices on the east coast, the RBA acts and lifts rates shortly before Christmas 2015.

House prices in this scenario continue to rise swiftly in Sydney and to a lesser extent Melbourne. But importantly, other cities join in the surge such as Brisbane, Hobart and Adelaide. This is ultimately what forces the RBA’s hand. Before, they were tolerant of rapid house prices in Sydney provided the fever wasn’t spreading elsewhere. Now it’s spreading everywhere and thus they final act.

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It means that under this scenario, prices still move ahead in 2015, but 2016 would see a downturn for housing. The extent and magnitude of such a downturn cannot be calculated at this stage. There are just too many what ifs ahead for the domestic economy.

Scenario one is our base case given everything we know about the markets right now. That includes the fact that 90 day bank bills are not factoring in any change in interest rates over 2015, the housing markets appear to have a moderate level of momentum behind them and the Australian dollar is firmly stuck in a trading range despite year-long jawboning from the Reserve Bank.

Of course in all this, there are many possibilities for 2015. Some argue there is the real potential for a global conflict, the likes we have not seen since World War II. Needless to say, if World War III eventuated, it might be a good time to sell!

Scenario four – Macro prudential tools employed via loan to value ratio restrictions

This possibility is the dark horse in 2015. Following its success in New Zealand there has been increased chatter about introducing the policy here in Australia. How it works is by forcing mortgage financiers to place minimum requirements on the deposit amount as a percentage of the property’s value before a mortgage can be approved.

This might be say a 10% or 20% deposit or even more. The plan in theory would allow to either keeping rates on hold for longer or even cut rates without creating property bubble risks.

It generally takes a little while for the effects to feed through to the markets (six to nine months). However, provided the deposit requirement was high enough (greater than 10%), the effects would be noticeable.

SQM Research believes it would eliminate a minimum 5% off capital growth per year after it was employed.

Another possible scenario could be a large correction occurring with global equity markets. It is no secret that yields for all investment classes have come down again in 2014 and subsequently, markets are increasingly pricing in a low risk world. If there were to be a sharp, adverse adjustment in interest rates, a rather large equities correction could occur which might happen on the back of a rate rise in the United States.

A Looming Bubble?

The moment this recovery began, there was fierce commentary that the country was going to have a bubble on its hands. However, various measures of the housing market have consistently suggested that yes, while the Australian housing market was not exactly cheap, there certainly have been times when it was more expensive.

SQM Research’s preferred measurement of valuation in the housing market is nominal GDP to dwelling prices. On that measurement the market overall is currently overvalued by 10.3%. There have been periods where the market was significantly “overvalued”. The most recent time was in early 2010 when the market was 17% overvalued. The record point of overvaluation in the last 30 years was actually back in late 2003 when the market was 25% overvalued.

National Nominal Prices to GDP

-15%-10%-5%0%5%10%15%20%25%30%

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Premium/Discount to GDP House Price IndexNominal GDP Index

Source: ABS, SQM Research

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Is the Market Overvalued or Undervalued?

City Current over/under valuation

30-year average under/over valuation

Historic overvalued point

Historic undervalued point

Perth 30% 12.4% 70% (Dec 2006) -12% (Sept 2000)

Brisbane 15% 13.5% 44% (March 2008) -13% (Sept 2000)

Darwin 9.5% -11.3% 15.9% (Dec 2009) -27.7% (Sept 2001)

Melbourne 19.9% 2.2% 33.9% (March 2010) -23.2% (March 1996)

Sydney 17.0% 16.1% 54.8% (Dec 2003) -6.3% (Sept 1987)

Adelaide -25.8% -24.8% -3.5% (Dec 1986) -41.2% (Sept 2000)

Hobart -17.4% -15% 4.5% (Dec 2007) -38.1% (Sept 2001)

Canberra -16.1% -12.5% 6.5% (Dec 2003) -31.9% (Sept 1999)

National 10.3% 4.4% 25.3% (Dec 2003) -10.8% (June 1997)

Source: SQM Research

Gross Rental Yields

August 2014 August 2013

All Houses 3-Bedroom Houses

All Units 2-Bedroom Units

All Houses 3-Bedroom Houses

All Units 2-Bedroom Units

Sydney 3.56% 3.86% 4.44% 4.41% 3.63% 4.08% 4.55% 4.50%

Melbourne 3.76% 3.81% 4.39% 4.29% 3.77% 3.97% 4.30% 4.27%

Brisbane 4.30% 4.57% 5.26% 5.19% 4.40% 4.75% 5.37% 5.32%

Perth 3.61% 3.86% 4.79% 4.76% 4.09% 4.29% 5.23% 5.34%

Darwin 5.75% 5.35% 5.90% 5.65% 5.21% 5.16% 5.45% 5.63%

Hobart 4.13% 4.58% 5.54% 5.51% 4.05% 4.44% 5.25% 5.19%

Canberra 3.98% 3.89% 5.03% 5.11% 4.25% 4.33% 5.10% 5.11%

Adelaide 3.83% 4.10% 4.89% 5.04% 4.01% 4.23% 5.09% 5.24%


Asking rents

All Houses All Units

Aug 2014 Aug 2013 % Change Aug 2014 Aug 2013 % Change

Sydney $669.0 $635.5 5.3% $475.2 $457.9 3.8%

Melbourne $455.2 $451.4 0.8% $358.0 $344.4 3.9%

Brisbane $445.6 $439.4 1.4% $367.6 $365.9 0.5%

Perth $524.3 $577.0 -9.1% $413.5 $461.1 -10.3%

Darwin $732.9 $706.5 3.7% $572.4 $508.8 12.5%

Hobart $309.3 $300.1 3.1% $262.1 $255.8 2.4%

Canberra $474.2 $513.4 -7.6% $370.2 $396.2 -6.6%

Adelaide $355.6 $359.1 -1.0% $278.7 $279.2 -0.2%


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On our preferred measurement, Darwin is the most overvalued market right now, running at a significant point over its long term price discount. The next overvalued market is Perth, followed closely by Melbourne. The cheapest cities right now appears to be Adelaide, Hobart and Canberra, which is running at a 25.8% undervaluation.

It is interesting of course that the three cheapest cities right now have all been struggling with their local economies. Just like the stock market, there are often good reasons why locations will tend to trade at a premium or discount to their fundamental value. And just like the stock market, property prices are never too high to go even higher, nor are they ever too low to go even lower.

That’s where the market is right now. Even while there might be a general consensus that the market is overvalued, it will become even more overvalued before the end of this cycle. And most certainly it has been far more overvalued in the past for most cities. So there is still some runway left.

That all said, we believe that Perth and Darwin look on the verge of a correction based on our leading indicators plus the rather negative outlook for their local economies. We will elaborate more on this in the city section of the report.

The other way to measure relative valuation in housing is to consider rents verses prices – or in other words, the gross rental yields.

On this measurement, indeed rental yields have fallen and are at near five-year lows. This is sign that the markets appear overvalued. It should be clearly noted however, that yields for all asset classes have come down in the past 25 years.

10-Year Government Bond Yields

That is because globally, the cost of debt (interest rates) have come down significantly and investors have responded by leaving cash and finding anything that offers an income stream. Australian residential property certainly has not been excluded from this global phenomenon.

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Capital City Outlook

Adelaide Base case forecast for 2015: +4 to +7%

SQM Research is forecasting growth slightly faster than what was recorded for 2013 and 2014 in this capital city. However, this is not as a result of any strong economic or property fundamental factors. Rather it is to do with the global chase for yield and the relative affordable property prices compared to other investor hubs around the country.

The current indicator suggesting future strength right now is without a doubt – stock on market. Listings in Adelaide have been in a gradual downturn since 2012. After peaking with 18,700 listings in November 2011, supply has now dropped to 14,500. That’s over 4,000 properties less on the market than where we were three years ago with the downward trend accelerating in recent months.

This normally is a strong sign buyers are out in force and are taking out properties.

At the same time, there has also been a gradual lift in vendor asking prices, which appears to have started in July last year for houses and in January for units.

The rental side of the equation is also looking steady if not slightly more in favour of landlords compared to this time last year. A vacancy rate in itself of 1.5% appears tight but as we always say, it is the relative movement that also counts. On that front, Adelaide vacancy rates have slowly tightened from June 2012, where they stood at 1.9%. Even so, this gradual decline has not yet had any impact on the rental market. Indeed Adelaide rents FELL by 1.1% over the past 12 months to August and units hardly did any better – remaining unchanged.

Monthly Dwelling Approvals have risen over the year, but not too much at just 879 dwellings for June 2014 verses 758 in June 2013. Of late the trend has actually softened.

Housing finance approvals in Adelaide are actually down now for the last 12 months by 2.6%. And why this, given the low interest rate environment, you may ask? Unemployment. South Australia now has one of the highest unemployment rates in Australia at 7.2%.

Once upon a time, the unemployment rate in South Australia was 4.4%. That was the peak of employment just prior to the GFC in March 2008.

So, some mixed signals, but overall I get the impression this is not a city or state that is going anywhere too fast or too soon. Maybe there might be more investor demand given the relative value levels on other cities. But this very well could end up being a value trap. Often in this world, things are cheap for a reason.

Adelaide Stock on Market

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,000

Apr 0

8Au

g 08

Dec

08

Apr 0

9Au

g 09

Dec

09

Apr 1

0Au

g 10

Dec

10

Apr 1

1Au

g 11

Dec

11

Apr 1

2Au

g 12

Dec

12

Apr 1

3Au

g 13

Dec

13

Apr 1

4Au

g 14

Houses Units

Source: SQM Research, ABS 5206 & 6416, seasonally adjusted

Adelaide House Price to GDP

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Jul 9

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6O

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Jan

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Nov

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Apr 0

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Feb

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Dec

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May

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Source: ABS

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Hobart Base case forecast for 2015: +3 to +6%

The data suggests Hobart’s housing market will continue to recover in 2015. Demand will be driven by interstate investors, as well as locals who are becoming a little more confident on what they are observing with their local economy. Rents are going to rise significantly next year on the back of stronger population growth and current shortages of rental stock.

Vacancy rates (currently at just 1.7%) did not seasonally surge this winter as has been historically the case. This means the rental market will be very tight over the course of this summer. Less than 1% is the likely scenario. That also means rental growth is going to pick up as it already has been. After the rental falls of 2011 to 2012 where market rents fell by about 12%, rents have bottomed out and have now picked up. The present tempo is now 2-3% rental growth. And given there are no major supply surges coming (building approvals have effectively done nothing) rents will rise from here. It is looking like we will get somewhere between 4-6% growth for 2015, but I wouldn’t rule out a possible spike to 7%.

On the face of it, unemployment rates look weak. 7.1% for Tasmania is nothing to write home about. But once you strip the numbers back and get a historical perspective it is looking better. So this time last year the unemployment rate was 8.1%. Hobart itself has an unemployment rate of 6.2%. That said job ads fell in recent months and wages are actually down 1% year on year – not exactly exciting results here. Though we get the sense all the weakness is coming out of the state’s North such as Launceston.

Today, a significant number of employed Tasmanians work for the government. Other major employers include the Federal Group, owner of several hotels and Tasmania’s two casinos, and Gunns Limited, the state’s biggest forestry company, which has recently gone into voluntary administration. In the late 1990s, many national companies based their call centres in the state after obtaining cheap access to broad-band fibre-optic connections. Launceston for a while, benefited from this demand. This all sounds good for property investment, however, the long term outlook is not the best.

Really, there is so much untapped potential with the Hobart economy. Yet it has always been that way. Untapped ecotourism opportunities, untapped forestry, fishing and mining opportunities have been there for decades.

The State’s weaknesses have held the State back. A lack of infrastructure, lack of a gold rush, lack of open immigration initiatives, lack of population, decline in the wool and mineral economies, lack of early colonial initiatives, or lack of foreign investment. And finally a lack of vision on making the most out of what the state does have, which is an incredible natural environment ripe for tourism. For the length of the history of Tasmania there has been a continuing exodus of youth to mainland Australia in order to seek employment opportunities. This has got to stop if the economy is going to be put in a longer term footing.

It is little surprise then that the housing market has underperformed the other cities over the long term and I suspect that will be the case for the next ten years, made up of sporadic intervals of price surges caused by a catch up mentality.

But for now and next year, our indicators would suggest there will be price rises in Hobart. I think it is still going to be moderate at between 3%–6%. The risk is actually on the high side. There could be more than 6%.

Often, recoveries in Tasmania are driven by interstate investors who are in search of a bargain and look to Tasmania because prices suddenly look cheap. I think we might be entering into one of those phases.

Hobart Stock on Market

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Dec

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Houses Units


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Hobart Vacancy Rates

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

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Vacancies Vacancy Rate


Hobart House Price to GDP

-45%-40%-35%-30%-25%-20%-15%-10%-5%0%5%10%

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Jul 9

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Canberra Base case forecast for 2015: -2 to +3%

As we have predicted for the last two years, Canberra house prices have been falling. The weakness first started showing up in our data back in March 2012 when asking prices stalled then started to trend down. Vacancy rates soon started to rise in later 2012.

So the recent budget cuts did not herald the downturn, for it was already under way due to the Labor Government’s attempts to cut spending back that year. But it was also due to surges in the supply side. Back in 2010, the ACT Government acted to stimulate the supply side of the housing market by providing some great incentives for developers to build. And build they did.

The total value of new residential dwellings completed went from a quarterly amount of $206 million in the June quarter of 2009 to $323 million in the June quarter of 2014. Basically, building work has surged by 50% in a relatively short space of time. It is little wonder then that rents have been smashed – down 18.8% in the last three years for houses and down 12.3% for units. You wouldn’t think that would be the case given vacancy rates are still just 2.1%, but it is that relative movement that counts the most. In 2010, the rental vacancy rate was just 0.5%.

The trigger to a real recovery in Canberra will naturally be related to the Federal budget. Essentially it works like this – when the federal government of the day opens the purse strings it normally entails a big recruitment drive of the public service, both in full time and temporary positions. Segments of the private sector also reap the rewards, such as advice and private lobbying bodies. This public employment generally happens around the various departments within Canberra itself. That all said, when looking at the valuation metrics of incomes verses prices, Canberra does not look expensive. Indeed, prices appear to be below fair value – a rare situation in the Australian housing market.

Despite this, our outlook remains negative for another year. There is still much stock to absorb and the Liberal Government has not yet completed its austerity program.

Canberra Stock on Market

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1,500

2,000

2,500

3,000

3,500

4,000

4,500

Apr 0

8Au

g 08

Dec

08

Apr 0

9Au

g 09

Dec

09

Apr 1

0Au

g 10

Dec

10

Apr 1

1Au

g 11

Dec

11

Apr 1

2Au

g 12

Dec

12

Apr 1

3Au

g 13

Dec

13

Apr 1

4Au

g 14

Houses Units


Canberra Asking Rents

0

100

200

300

400

500

600

700

Aug

09N

ov 0

9Fe

b 10

May

10

Aug

10N

ov 1

0Fe

b 11

May

11

Aug

11N

ov 1

1Fe

b 12

May

12

Aug

12N

ov 1

2Fe

b 13

May

13

Aug

13N

ov 1

3Fe

b 14

May

14

Aug

14

All Houses 3-Bedroom HousesAll Units 2-Bedroom Units


Canberra House Price to GDP

-35%-30%-25%-20%-15%-10%-5%0%5%10%

0

100

200

300

400

500

600

700

Jun

86N

ov 8

7Ap

r 89

Sep

90Fe

b 92

Jul 9

3D

ec 9

4M

ay 9

6O

ct 9

7M

ar 9

9Au

g 00

Jan

02Ju

n 03

Nov

04

Apr 0

6Se

p 07

Feb

09Ju

l 10

Dec

11

May

13



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Darwin Base case forecast for 2015: -3 to +1%

Darwin is the capital city of the Northern Territory, and is somewhat isolated due to its geographical location. Key drivers of its economy are mining and tourism. Given the influence of the mining sector on the state, house prices in Darwin have followed a similar path to that of Brisbane and Perth. However, the magnitude of the housing boom that was seen in other mining capital cities was not witnessed in Darwin. The local economy has also benefited from the presence of the United Nations and military bases both in and around Darwin, as they form a substantial source of employment in the region as well.

The slowdown in the mining sector has caught up with Darwin, with the city witnessing hikes in unemployment. As expected, this could impact the housing sector. However, the strong presence of defence bases should help mitigate some of this risk.

As we forecasted last year, dwelling price growth has slowed down. ABS reported that house prices rose by 3.4% for the 12 months to June 2014. The previous 12 months recorded a 6.6% increase.

SQM’s asking prices indexes are now recording falls in this capital city’s asking prices. The three months to August 2014 recorded a 3.2% decline in asking prices for houses and a 1.7% decline for asking prices for units. Listings have been trending up this year and are now at the third highest level since we began our records. Last time listings were this high, dwelling prices had a correction in the order of about 4%.

SQM Research would suggest right now the correction has begun. How big this downturn is going to be is hard to judge, but it appears it will be at least in the order of what happened in 2011. The concerning thing however, is this correction is happening despite the low interest rate environment. The negative forces of the mining downturn are more powerful than the buffeting forces of low interest rates. It clearly shows up in unemployment levels where unemployment has been rising for the last nine months now. Of course, 4.8% is still good but as has been previously stated, it is the relative movement that counts.

Darwin Stock on Market

0200400600800

1,0001,2001,4001,6001,8002,000

Apr 0

8Au

g 08

Dec

08

Apr 0

9Au

g 09

Dec

09

Apr 1

0Au

g 10

Dec

10

Apr 1

1Au

g 11

Dec

11

Apr 1

2Au

g 12

Dec

12

Apr 1

3Au

g 13

Dec

13

Apr 1

4Au

g 14

Houses Units


Darwin Asking Rents

0100200300400500600700800900

Aug

09N

ov 0

9Fe

b 10

May

10

Aug

10N

ov 1

0Fe

b 11

May

11

Aug

11N

ov 1

1Fe

b 12

May

12

Aug

12N

ov 1

2Fe

b 13

May

13

Aug

13N

ov 1

3Fe

b 14

May

14

Aug

14



Darwin House Price to GDP

-45%-40%-35%-30%-25%-20%-15%-10%-5%0%5%10%

0

100

200

300

400

500

600

700

Jun

86N

ov 8

7Ap

r 89

Sep

90Fe

b 92

Jul 9

3D

ec 9

4M

ay 9

6O

ct 9

7M

ar 9

9Au

g 00

Jan

02Ju

n 03

Nov

04

Apr 0

6Se

p 07

Feb

09Ju

l 10

Dec

11

May

13



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Perth Base case forecast for 2015: +1 to +4%

Over the last year, the mining downturn has continued on across the mining sector, which has had a direct impact on consumer and business confidence, particularly in Western Australia. It has also led to heightened unemployment in the city of Perth. This in turn has contributed to a slowdown in the housing sector. This was first observed in mid-2012 in the rental market within Perth, where a persistent creep up in vacancy rates commenced. Since then, vacancy rates have continued to move ever higher.

SQM Research has now recorded the vacancy rate to be 2.5% for the greater city. The inner city locations are currently well over 6%. Yes, all those inner city apartments that the temporary mining workers were using are looking very vacant – and with little wonder as the Fly in, Fly out worker has all but gone. Last year, we stated that we thought the downturn would last 18 to 24 months unless there was a new surge in commodity prices. There has been no ‘new surge’ in commodity prices and so the downturn will likely persist throughout 2015. So far, there has only been a slowdown in capital growth of dwelling prices. However, SQM’s asking prices index appears to now be recording some slight falls in asking prices. That being said, stock levels have not spiked up so the reading on the ‘for sale’ market has been mixed. It is suggestive that low interest rates are providing some buffer in the market place.

So, our forecast for dwelling prices is for a flat market more than anything else. A major correction does not appear to be on the cards but a minor one is a real possibility.

Perth Stock on Market

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Apr 0

8Au

g 08

Dec

08

Apr 0

9Au

g 09

Dec

09

Apr 1

0Au

g 10

Dec

10

Apr 1

1Au

g 11

Dec

11

Apr 1

2Au

g 12

Dec

12

Apr 1

3Au

g 13

Dec

13

Apr 1

4Au

g 14

Houses Units


Perth Vacancy Rates

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

0

1,000

2,000

3,000

4,000

5,000

6,000

Jan

05Ju

l 05

Jan

06Ju

l 06

Jan

07Ju

l 07

Jan

08Ju

l 08

Jan

09Ju

l 09

Jan

10Ju

l 10

Jan

11Ju

l 11

Jan

12Ju

l 12

Jan

13Ju

l 13

Jan

14Ju

l 14



Perth Asking Rents

0

100

200

300

400

500

600

700

Aug

09N

ov 0

9Fe

b 10

May

10

Aug

10N

ov 1

0Fe

b 11

May

11

Aug

11N

ov 1

1Fe

b 12

May

12

Aug

12N

ov 1

2Fe

b 13

May

13

Aug

13N

ov 1

3Fe

b 14

May

14

Aug

14



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Perth Building Approvals

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Jan

00Se

p 00

May

01

Jan

02Se

p 02

May

03

Jan

04Se

p 04

May

05

Jan

06Se

p 06

May

07

Jan

08Se

p 08

May

09

Jan

10Se

p 10

May

11

Jan

12Se

p 12

May

13

Jan

14

Source: ABS

Perth House Price to GDP

-20%-10%0%10%20%30%40%50%60%70%80%

0100200300400500600700800900

Jun

86N

ov 8

7Ap

r 89

Sep

90Fe

b 92

Jul 9

3D

ec 9

4M

ay 9

6O

ct 9

7M

ar 9

9Au

g 00

Jan

02Ju

n 03

Nov

04

Apr 0

6Se

p 07

Feb

09Ju

l 10

Dec

11

May

13



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/15

Brisbane Base case forecast for 2015: +5 to +8%

Listings in Brisbane have been very steady over the past two years with no major decline evident, which does suggest the market is in equilibrium more than anything else. There is no evidence of an impending seller’s market. Further evidence of this benign outlook is that asking prices for houses have only risen by 4.4% over the past 12 months and the units asking prices are up by 2.7%. This has been a far better result for exiting property investors who had the rather unpleasant experience of witnessing their properties reduce in value by some 12% between 2010 and 2012.

However, the rather bullish forecasts put out by some well-known property commentators earlier this year of an impending Brisbane property boom has not materialised. Nothing of the sort has happened. With the general rise in vacancy rates, particularly in the CBD locations, it is hard to see how rents are going to increase in this market.

So, overall, our forecast suggests another year of modest to moderate capital growth. Investors need to stay away from the CBD for the foreseeable future. However, consider areas close by and to the east when it comes to free standing dwellings. The reason why we state this is because there has been no overbuilding in the east and vacancy rates are lower compared to the city wide averages.

Brisbane Stock on Market

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Apr 0

8Au

g 08

Dec

08

Apr 0

9Au

g 09

Dec

09

Apr 1

0Au

g 10

Dec

10

Apr 1

1Au

g 11

Dec

11

Apr 1

2Au

g 12

Dec

12

Apr 1

3Au

g 13

Dec

13

Apr 1

4Au

g 14

Houses Units


Brisbane House Price to GDP

-20%

-10%

0%

10%

20%

30%

40%

50%

0

100

200

300

400

500

600

700

800

Jun

86N

ov 8

7Ap

r 89

Sep

90Fe

b 92

Jul 9

3D

ec 9

4M

ay 9

6O

ct 9

7M

ar 9

9Au

g 00

Jan

02Ju

n 03

Nov

04

Apr 0

6Se

p 07

Feb

09Ju

l 10

Dec

11

May

13



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Melbourne Base case forecast for 2015: +5 to +9%

There has been a lot of confusion about the current market situation in Melbourne, let alone its future direction. The problem is the timeliness of the underlying property sales data as provided by the state government is woeful. We are dealing with an average lag of 6–9 months. Our data has consistently suggested the market is not as strong as what the consensus is. Rather a two speed market is being experienced. Inner suburban locations such as Albert Park, Richmond and St Kilda have recorded lightening capital growth while the middle to outer ring areas have been flat. This is where thousands upon thousands of house and land packages have been created and are still being built today. Arguably, this means a price gap has been opening up in price between the inner ring locations and the outer ring locations. A contrarian may consider then looking for a bargain in the outer suburbs. However, we would advise that these areas will likely underperform for a little while yet.

Melbourne Stock on Market

0

10,000

20,000

30,000

40,000

50,000

60,000

Apr 0

8Au

g 08

Dec

08

Apr 0

9Au

g 09

Dec

09

Apr 1

0Au

g 10

Dec

10

Apr 1

1Au

g 11

Dec

11

Apr 1

2Au

g 12

Dec

12

Apr 1

3Au

g 13

Dec

13

Apr 1

4Au

g 14

Houses Units


Melbourne Asking Rents

050

100150200250300350400450500

Aug

09N

ov 0

9Fe

b 10

May

10

Aug

10N

ov 1

0Fe

b 11

May

11

Aug

11N

ov 1

1Fe

b 12

May

12

Aug

12N

ov 1

2Fe

b 13

May

13

Aug

13N

ov 1

3Fe

b 14

May

14

Aug

14



Melbourne Building Approvals

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Jan

00Se

p 00

May

01

Jan

02Se

p 02

May

03

Jan

04Se

p 04

May

05

Jan

06Se

p 06

May

07

Jan

08Se

p 08

May

09

Jan

10Se

p 10

May

11

Jan

12Se

p 12

May

13

Jan

14

Source: ABS

Melbourne House Price to GDP

-30%

-20%

-10%

0%

10%

20%

30%

40%

0100200300400500600700800

Jun

86N

ov 8

7Ap

r 89

Sep

90Fe

b 92

Jul 9

3D

ec 9

4M

ay 9

6O

ct 9

7M

ar 9

9Au

g 00

Jan

02Ju

n 03

Nov

04

Apr 0

6Se

p 07

Feb

09Ju

l 10

Dec

11

May

13



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Sydney Base case forecast for 2015: +8 to +12%

Vacancy rates in Sydney have remained steady at 1.8% with no material increases in the last two years. Subsequently, rents have outperformed other capital cities, rising by 5.3% for houses and 3.8% for units.

Regions which have outperformed on the rental front include the Central coast (+8.2%), Canterbury-Bankstown (12.6% for houses), Liverpool Units (up 8.8%), Sutherland Shire houses (up 8.5%). While the inner east and lower North Shore have generally underperformed. We are also observing rising vacancies in the lower North Shore and the Eastern suburbs. That should be no surprise for the east as it includes all the new developments going up around Waterloo.

The CBD itself has not yet recorded a rise in vacancies, but we are expecting this to happen due to developments being completed in the southern end of the CBD plus Barangaroo when it is completed in 2016.

Some large rises have also occurred in the Blue Mountains for units were prices have risen by 12.3% in the last 12 months. Units in the inner west have also boomed with prices rising over 15% to a $677,000 median. Houses for the inner west now trade at over the $1,000,000 mark. In Liverpool, houses have risen by 18% this year alone. Units are up by 13%. Houses in Parramatta have also risen by a rather large 17%. The Hills region in Sydney’s Northwest has also boomed with houses up by 20.6%.

All this sounds completely out of control and not sustainable. And it isn’t over the long term. However, it is perfectly sustainable over a shortened period of time. When considering valuations of the past 30 years in Sydney, the market now is just at average levels for that period of time. Plus, we must remember that with population increasing by 60,000 per year, making for a tight accommodation environment, a State budget that is very healthy and overall economy that is creating jobs.

So the longer term economic fundamentals are currently favourable for Sydney. When taking into account the short term indicators, things are also looking promising for more capital growth to come over the next 12 months. Stock levels in Sydney are still near record lows. There were just 22,000 properties on the market in August, indicating a very tight market.

Sydney Gross Rental Yields

0

1

2

3

4

5

6

Aug

09N

ov 0

9Fe

b 10

May

10

Aug

10N

ov 1

0Fe

b 11

May

11

Aug

11N

ov 1

1Fe

b 12

May

12

Aug

12N

ov 1

2Fe

b 13

May

13

Aug

13N

ov 1

3Fe

b 14

May

14

Aug

14

All Houses 3-Bedroom HousesAll Units 2-Bedrom Units


Sydney Stock on Market

05,000

10,00015,00020,00025,00030,00035,00040,00045,00050,000

Apr 0

8Au

g 08

Dec

08

Apr 0

9Au

g 09

Dec

09

Apr 1

0Au

g 10

Dec

10

Apr 1

1Au

g 11

Dec

11

Apr 1

2Au

g 12

Dec

12

Apr 1

3Au

g 13

Dec

13

Apr 1

4Au

g 14

Houses Units


Sydney Vacancy Rates

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Feb

05Au

g 05

Feb

06Au

g 06

Feb

07Au

g 07

Feb

08Au

g 08

Feb

09Au

g 09

Feb

10Au

g 10

Feb

11Au

g 11

Feb

12Au

g 12

Feb

13Au

g 13

Feb

14



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Sydney Asking Rents

0100200300400500600700800

Aug

09N

ov 0

9Fe

b 10

May

10

Aug

10N

ov 1

0Fe

b 11

May

11

Aug

11N

ov 1

1Fe

b 12

May

12

Aug

12N

ov 1

2Fe

b 13

May

13

Aug

13N

ov 1

3Fe

b 14

May

14

Aug

14



Sydney Building Approvals

0

1,000

2,000

3,000

4,000

5,000

6,000

Jan

00Se

p 00

May

01

Jan

02Se

p 02

May

03

Jan

04Se

p 04

May

05

Jan

06Se

p 06

May

07

Jan

08Se

p 08

May

09

Jan

10Se

p 10

May

11

Jan

12Se

p 12

May

13

Jan

14

Source: ABS

Sydney House Price to GDP

-10%

0%

10%

20%

30%

40%

50%

60%

0

100

200

300

400

500

600

700

800

Jun

86N

ov 8

7Ap

r 89

Sep

90Fe

b 92

Jul 9

3D

ec 9

4M

ay 9

6O

ct 9

7M

ar 9

9Au

g 00

Jan

02Ju

n 03

Nov

04

Apr 0

6Se

p 07

Feb

09Ju

l 10

Dec

11

May

13



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20 Postcodes with the Lowest Percentage of “For Sales”

The list below is the nation’s 20 postcodes with the lowest ratio of “for sale” listings to the number of established dwellings. SQM Research does not wish to make any serious forecasts based on this list, but we believe it still provides insight into the current state of the Australian housing market.

The theory behind this list is that the lower the ratio in percentage terms, the less the supply is of properties on the market for each particular postcode and so the list exhibits some of the most tightly held spots where turnover is lower than average.

What is perhaps most interesting about this list is that 19 of the 20 postcodes listed are from the state of New South Wales, many of these from the city of Sydney. This does not come as a surprise, with stock levels in

Sydney down -9.4% year on year. Sydney’s property boom has resulted in stock levels being absorbed in this capital city at a much faster rate than previous years.

Of the Sydney postcodes is also interesting to note that there are several featured from the city’s west. This is a trend which has been increasing over the past several years and a region which SQM Research believes to have been outperforming since 2010 and which continues to outperform.

With many of Sydney’s inner and middle ring localities becoming more and more unaffordable to a substantial proportion of the population, individuals are looking further out in order to invest and purchase residential property.

P/Code Suburb 2013/8 Houses

2013/8 Units

2013/8 Total

2014/8 Houses

2014/8 Units

2014/8 Total

% Change

Total Established Dwellings (ABS 2011)

For Sale Ratio

2032 Kingsford 23 20 43 18 15 33 -23.3% 6514 0.5%

2518 Corrimal 46 44 90 29 17 46 -48.9% 8274 0.6%

2016 Redfern 17 33 50 16 23 39 -22.0% 6580 0.6%

2047 Drummoyne 18 30 48 16 17 33 -31.3% 5271 0.6%

2164 Smithfield 39 7 46 35 4 39 -15.2% 6228 0.6%

2232 Sutherland 63 43 106 32 50 82 -22.6% 12898 0.6%

2035 Maroubra 69 61 130 45 49 94 -27.7% 14217 0.7%

2759 St Clair 69 0 69 56 0 56 -18.8% 8425 0.7%

2034 Coogee 41 46 87 36 27 63 -27.6% 9461 0.7%

2519 Mount Pleasant 41 36 77 29 16 45 -41.6% 6743 0.7%

2168 Busby 66 8 74 86 3 89 20.3% 13247 0.7%

2234 Menai 65 13 78 57 10 67 -14.1% 9784 0.7%

2233 Waterfall 66 16 82 56 14 70 -14.6% 10212 0.7%

2131 Ashfield 23 49 72 27 39 66 -8.3% 9383 0.7%

2176 Abbotsbury 79 7 86 97 1 98 14.0% 13790 0.7%

2166 Cabramatta 92 44 136 76 41 117 -14.0% 16200 0.7%

3170 Mulgrave 60 16 76 40 9 49 -35.5% 6744 0.7%

2218 Carlton 17 34 51 16 28 44 -13.7% 5999 0.7%

2095 Manly 25 82 107 21 40 61 -43.0% 8291 0.7%

2165 Fairfield 81 41 122 66 31 97 -20.5% 13096 0.7%

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Top 20 Fastest Income-Growth Postcodes: Tomorrow’s Hot Spots?

High income growth is one common main contributor to the performance of property prices. The postcodes below have recorded the fastest income growth rates across the country over the past 20 years. The performance of house prices has also been provided for each of these postcodes. Individuals who viewed the previous versions of this report (September 2011, 2012 and 2013) will note that due to lags in data (Data being sourced from the ABS based on 2011 Census results) – substantial changes in results on this table might not be apparent for a number of years. Never the less, SQM Research stands by our convictions in relation to this data.

Postcodes situated in Inner Sydney, Perth and Melbourne have continued to dominate much of this list, which can most likely be attributed to a number of factors:

– High income earners typically reside in inner ring localities. SQM Research expects this trend to continue in the coming years.

– Postcodes in Perth and other parts of Western Australia have experienced rapid income growth in the past few years due to the recourses boom in that part of the country. That being said, SQM Research believes that the next census data will reveal that income growth in Perth would have slowed from the accelerated speed that we have witnessed in recent periods, as the commodities boom has weakened and the fly-in/fly-out employment trend in this locality continues to dwindle.

With a high proportion of professional Sydney siders continuing to reside in inner city suburbs in order to be in close proximity to the CBD, areas such as Waterloo, Darlinghurst, Pyrmont and Redfern have all experienced a marked increase in income growth in recent years. The demand for housing in these areas has put an upward pressure on house prices as the supply of housing in the inner ring localities (particularly Sydney) is restricted. SQM Research expects both income growth and house price increases to persist in certain pockets of

inner Sydney as the capital city continues to deal with the demand for inner city living. Suburbs in Sydney’s inner west, for example Erskineville (2043) are also expected to record increases in income growth in the near future, as the inner west becomes an increasingly popular alternative for inner city living.

Inner city postcodes in Brisbane which have previously featured in this list appear once again, with suburbs: New Farm (4005) and Fortitude Valley (4006) attracting high income earners for the similar reasons to that of their Sydney counterparts – younger, affluent professionals desiring inner city dwellings. Recent redevelopments in the suburbs surrounding and making up Brisbane’s CBD have encouraged well-paid individuals to reside in these localities, pushing industrial based activities to other parts of the capital city and driving up income growth in these areas.

Also noted in this list are suburbs of Flemington/Kensington (3031) – home to Australia’s famous “Melbourne Cup” race. Although this postcode does contain a substantial level of public housing, its close proximity to Melbourne’s CBD (approximately 4km) has made it a potentially attractive location for well-paid individuals requiring housing close to the inner city. Previously, the locality was used for major abattoirs and livestock sale yards, however upon closure of these sale yards in 1984, the postcode has undergone serious urban development with gentrification being a major factor in the pickup in income growth in the area.

Most significantly, Perth postcodes have once again made a substantial contribution to this list. However, we also have taken into consideration that given this has been highly influenced by the mining and commodities boom, these suburbs have been susceptible to any type of sustained downturn in mining. Perth has already shown signs of this in 2014 and we forecast this to continue into 2015.

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Income

Postcode Suburb 1991 1996 2001 2006 2011 CAGR for income

2017 Waterloo 318 386 469 1236 1832 9.1%

2016 Redfern 448 635 1167 1701 2143 8.1%

6000 Perth CBD 482 735 992 1618 2210 7.9%

6159 North Freemantle 555 802 1303 2015 2480 7.8%

4005 New Farm 546 750 1224 1800 2404 7.7%

2604 Causeway 626 808 1250 1910 2614 7.4%

6012 Mosman Park 648 917 1307 1850 2554 7.1%

4006 Fortitude Valley 618 881 1465 1898 2435 7.1%

2043 Esrkinville 686 994 1562 2053 2692 7.1%

4171 Balmoral 675 872 1332 1924 2630 7.0%

6006 North Perth 617 757 1087 1565 2376 7.0%

6016 Glendalough 578 763 1050 1555 2203 6.9%

6005 Kings Park 634 717 1102 1646 2415 6.9%

2010 Darlinghurst 669 923 1629 2100 2545 6.9%

6158 East Freemantle 667 872 1264 1791 2532 6.9%

6160 Freemantle 568 762 997 1486 2150 6.9%

2303 Hamilton 467 613 890 1210 1768 6.9%

2009 Pyrmont 669 1003 1610 2101 2528 6.9%

3031 Flemington 518 605 1032 1492 1954 6.9%

3013 Yarraville 545 670 1019 1380 2031 6.8%


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Top Twenty Tightest Vacancy Rates

Vacancies in the rental market have remained somewhat steady year- on- year at a national level. However, vacancies have continued to remain tight in several localities throughout the course 2013 and 2014, with the current national vacancy rate currently sitting at 2.3% as of August 2013. SQM Research considers 3.0% to be the level at which vacancies are at equilibrium, a figure in which all capital cities continue to sit underneath, including Melbourne – which in previous years has crept above this point. Recently though, Melbourne has been steadily recording vacancy rates under 3%, joining the remaining capital cities.

Throughout the latter part of 2013, we began to witness a substantial shift of renters entering the buyer’s property market with record low interest rates encouraging first home buyers to leave the rental

market in favour of purchasing their first property. In turn whilst providing relief for renters, this has shifted the balance of power from landlords to tenants, resulting in a sluggish rental market during 2014 where rents remained flat in the majority of localities.

With the brunt of the most recent national housing downturn completely over and a recovery well in play, renters were granted a reprieve from the rental crisis experienced in 2012 and 2013, this year. With no significant rental rises having taken place, and only modest rises expected to occur over the next year, tenants can expect to sit comfortably and continue to wield power over landlords for the remainder of 2014 and into 2015.

This table reveals the top 20 postcodes in Australia which experienced the tightest vacancy rates in July 2014.

P/Code Suburb Vacancies 2013/7

Vacancy %

Vacancies 2014/7

Vacancy %

Vacancies 2013/7

Vacancy %

Vacancies 2014/7

Vacancy %

4743 Glenden 0 0 3 0.334 0 0.00% 3 0.33%

5161 Reynella 8 0.914 3 0.336 8 0.91% 3 0.34%

2586 Boorowa 1 0.365 1 0.352 1 0.37% 1 0.35%

2804 Moorbel 1 0.36 1 0.353 1 0.36% 1 0.35%

2306 Windale 2 0.182 4 0.357 2 0.18% 4 0.36%

3061 Campbellfield 8 1.53 2 0.357 8 1.53% 2 0.36%

5373 Kapunda 4 1.515 1 0.361 4 1.52% 1 0.36%

4356 Pittsworth 6 1.134 2 0.362 6 1.13% 2 0.36%

2107 Whale Beach 13 1.239 4 0.365 13 1.24% 4 0.37%

2506 Berkeley 4 0.383 4 0.378 4 0.38% 4 0.38%

2517 Woonona 10 0.793 5 0.39 10 0.79% 5 0.39%

6109 Maddington 1 0.081 5 0.396 1 0.08% 5 0.40%

2471 Coraki 5 2.092 1 0.418 5 2.09% 1 0.42%

0835 Howard Springs

1 0.227 2 0.439 1 0.23% 2 0.44%

3232 Lorne 2 0.312 3 0.439 2 0.31% 3 0.44%

2675 Hillston 0 0 1 0.442 0 0.00% 1 0.44%

2566 Minto 14 0.716 9 0.455 14 0.72% 9 0.46%

4228 Tallebudgera 5 2.358 1 0.457 5 2.36% 1 0.46%

6220 Harvey 5 0.816 3 0.466 5 0.82% 3 0.47%

5047 Seacombe Gardens

16 1.288 6 0.474 16 1.29% 6 0.47%

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The idea behind asserting which postcodes have the tightest vacancy rates is that these areas could potentially be suitable places to invest, as rental properties in these postcodes are high in demand. This indirectly may guarantee that an investment property could be occupied by tenants at a quicker rate in comparison to postcodes where the vacancy rate is higher (providing the property is in adequate living condition and the asking rental price is at market value) rather than spending several weeks to months vacant at any given time.

In 2013, many of the postcodes on this list were located in Perth, which SQM Research attributed mostly to the mining boom that occurred in several towns and localities of Western Australia. However we have witnessed a surge in vacancies for Perth over the course of the last 12 months, with the city’s vacancy rate climbing during 2014 and a mining downturn causing many of these postcodes with previously tight vacancies to skyrocket.

What we can see from the list this year (2014) is that many of these Western Australian Postcodes have been replaced with postcodes from the state of New South Wales. This result is not altogether unsurprising to SQM Research, as we are aware that NSW has experienced dramatic underbuilding over the last 30 years, resulting in a lack of supply of residential dwellings. The capital of Sydney as a whole has remained steady year on year, recording a vacancy rate of 1.8% as of July 2014 – representing no change from the corresponding period in the previous year. That being said, SQM Research does not believe this to continue into the imminent future, with an expected surge of residential development to occur in New South Wales increasing the amount of dwellings which will potentially in turn push vacancy rates up.

The list also has a few Queensland postcodes sprinkled into the mix – a result that SQM Research has not witnessed in quite some years. After the major house price correction that occurred in certain parts of the sunshine state during 2010/2011, this part of Australia which has been both heavily reliant on Tourism and foreign investors, saw vacancies surge in many areas. However, we are now slowly beginning to see things shift for Queensland – with different regions telling their

own stories. Indeed, the postcodes featured in this list predominantly not located in the inner ring and SQM Research has witnessed many of Brisbane’s inner city suburbs experience a vacancy rates hike, with the capital city recording a 0.3 percentage point increase in vacancies year on year.

Three postcodes from South Australia feature on this list, however none of which are inner city localities. Adelaide’s vacancies have remained predominantly steady over the course of the year, recording modest decreases as a capital city and currently sitting at a tight vacancy rate of 1.5% as at July 2014 as mentioned in earlier parts of this report.

There is an absence of postcodes from the Northern Territory contrasting to previous years, and evidently SQM Research has recorded a substantial loosening of vacancies for this state. Darwin’s vacancy rate has climbed 0.6 percentage points over the year to July 2014, currently sitting at a vacancy rate of 1.4%.

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Disclaimer

Although all reasonable care has been taken to ensure that the information contained in this document is accurate, neither SQM Research nor its respective officers, advisers or agents makes any representation or warranty, express or implied as to the accuracy, completeness, currency or reliability of such information or any other information provided whether in writing or orally to any recipient or its officers, advisers or agents.

SQM Research and its respective officers, advisers, or agents do not accept:

– any responsibility arising in any way for any errors in or omissions from any information contained in this document or for any lack of accuracy, completeness, currency or reliability of any information made available to any recipient, its officers, advisers, or agents; or

– any liability for any direct or consequential loss, damage or injury suffered or incurred by the recipient, or any other person as a result of or arising out of that person placing any reliance on the information or its accuracy, completeness, currency or reliability.

This document contains statements which reflect current views and opinions of the property and the market which is current at the time of its release but which may relate to intended or anticipated future performance or activities. Such statements and information provided have been estimated only and are based on certain assumptions and SQM Research’s analysis of the information available at the time this document was prepared and are subject to risk and uncertainties given their anticipatory nature. Actual results may differ materially from current indications due to the variety of factors. Accordingly, nothing in the document is or should be relied upon as a promise or representation as to the future or any event or activity in the future and there is no representation, warranty or other assurance that any projections or estimations will be realised.

By accepting the opportunity to review this document the recipient of this information acknowledges that:

– it will conduct its own investigation and analysis regarding any information, representation or statement contained in this or any other written or oral information made available to it and will rely on its own inquiries and seek appropriate professional advice in deciding whether to further investigate the property in question.

– to the extent that this document includes forecasts, qualitative statements and associated commentary, including estimates in relation to future or anticipated performance, no representation is made that any forecast, statement or estimate will be achieved or is accurate, and it is acknowledged that actual future outcomes may vary significantly from the estimates and forecasts and accordingly, all recipients will make their own investigations and inquiries regarding all assumptions, uncertainties and contingencies which may effect the future returns of the property.

SQM Research has no obligation to provide the recipient with any access to additional information or to release the results of or update any information or opinion contained in this document.

It should be noted that none of the property estimates should be constituted as a valuation or a market appraisal. This report is not a valuation.

SQM Research Pty Limited ACN 122 592 036Tel: 1800 766 651Level 1, 9 Castlereagh Street,Sydney, NSW, 2000 www.sqmresearch.com.au

christopher’s housing boom and bust report 2014/15

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