[Presentation Heading]

[Presenter’s name and date] SEQ Residential Market

Gavin Hulcombe 1 November 2018

1980 2018

South Brisbane (Expo)

1988

2000 1990

Lead Time to Maturity

Springfield

1997

North Lakes

1998

Newstead

(Gasworks) 2008

Bowen Hills

2009

Hamilton (Portside)

2008

Maroochydore

Town Centre

2013

Source: Google Images, Herron Todd White

Migration Headlines

Source: The Courier Mail

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Ne

t In

ters

tate

Mig

rati

on

(p

ers

on

s)

Nu

mb

er

of

Job

s C

rea

ted

Year

SEQ Total Job Creation Net Interstate Migration

Total Number Employed

up by 4.5% or 75,500 jobs

N.B. Average jobs created 12 Months to August each year

SEQ Total Job Creation & Net Interstate Migration

Source: Australian Bureau of Statistics

20

25

30

35

40

45

Ho

me

Lo

an

Aff

ord

ab

ilit

y I

nd

ica

tor

Quarters

QLD NSW VIC

QLD has returned to 2003 levels

QLD, NSW & VIC Affordability

Source: REIA

HLAI = Median Annual Family Income / Average Loan Repayments

Average House Price Growth Since 2000

Source: CoreLogic – RP Data

-15%

-5%

5%

15%

25%

35%

45%

% C

ha

ng

e i

n A

vera

ge

Ho

use

Pri

ce

s

Years

Gold Coast

Sunshine Coast

Brisbane

Average House Price Growth Since 2000

Source: CoreLogic – RP Data

-15%

-5%

5%

15%

25%

35%

45%

% C

ha

ng

e i

n A

vera

ge

Ho

use

Pri

ce

s

Years

Gold Coast

Sunshine Coast

Brisbane

Sydney

Melbourne

Tighter Credit

Affordability Rivalling 2003 levels

?

Migration Interstate migration = 2007 levels

Tail Winds vs Head Winds

Employment Strong job growth in the last 12 months

Englobo Land Market Source: Google Images

0

2,000

4,000

6,000

8,000

10,000

12,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018p

Nu

mb

er

of

La

nd

Sa

les

Financial Years

Brisbane Region Gold Coast Sunshine Coast

SEQ Land Sales Volumes

Source: CoreLogic – RP Data, Herron Todd White Research

p = projected

Brisbane Land Sales

at circa 2007/2008

levels

2018

projection

Western Corridor Sales Volumes

Source: Herron Todd White Research

0

500

1000

1500

2000

2500

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018p

Nu

mb

er

of

Lo

ts S

old

Year

Collingwood Park / Redbank Plains Ripley Valley / Deebing Heights Springfield / Augustine Heights / Bellbird Park

p = projected

432 sqm

$214,285

$0

$50,000

$100,000

$150,000

$200,000

$250,000

400

450

500

550

600

650

700

750

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Ave

rag

e S

ale

Pri

ce

($

)

Ave

rag

e L

ot

Siz

e (

sq

m)

Year

Brisbane - Western Corridor

Average Lot Size Average Sales Price

Lots Getting Smaller, Sale Prices Rising

Source: Herron Todd White Research

Sunshine Coast Residential Lot Sizes

Source: CoreLogic – RP Data

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% o

f To

tal

Lo

ts S

ale

s

Financial Years

600-<700

450-<600

300-<450

<300

Freehold Terrace Lots vs Townhouses

Source: CoreLogic – RP Data, Sekisui House, Herron Todd White

Freehold Terrace Lots

3 Bed / 2 Bath / 1 Car

Land Area: 179 sqm

Floor Area: 148 sqm

Body Corporate Townhouses

3 Bed / 2 Bath / 1 Car

Land Area: 176 sqm

Floor Area: 143 sqm

Source: Pointcorp Developments

Residential Unit Market

Inner Brisbane Off-The-Plan Unit Sale Volumes

Source: Place Advisory

0

250

500

750

1,000

1,250

1,500

Nu

mb

er

of

Re

po

rte

d S

ale

s

Quarters

Brisbane CBD Northside Hamilton Southside Inner West

Units Sold vs Units Held

Source: CoreLogic – RP Data, Herron Todd White Research

0

200

400

600

800

1000

1200

1400

1600

1800

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018

Tota

l N

um

be

r o

f U

nit

s

Quarters

Units Held

Units Sold

Bowen Hills

Source: Realestate.com.au

Supply Returning to Balance

*Unit projects under construction or about to commence construction as at 7 September 2018 YTD

Suburb

Total Existing Units

(As at Mar 2014)

Proposed Supply

(As at Sept 2015)

Units Completed

(Apr 2014 - 2018)

Units to Complete

(Balance of 2018)

Units to Complete

(2019-2020)

Inner Brisbane 30,433 47,220 18,189 1,740 5,366

Brisbane CBD 8,053 6,409 1,126 530 967

Fortitude Valley 2,863 6,660 2,235 267 557

Newstead/Teneriffe 3,424 5,177 3,308 - 852

Bowen Hills 1,442 5,555 765 - -

Hamilton 2,232 3,827 1,245 95 332

South Brisbane 3,041 6,236 3,928 253 815

West End 1,991 5,923 2,265 342 425

Woolloongabba 938 4,040 1,103 193 308

Kangaroo Point 3,736 1,680 985 - 440

Greenslopes 2,064 - 353 60 114

Milton 649 1,713 876 - 526

Source: CoreLogic – RP Data, Herron Todd White Research, Cordells

Only 42%

constructed

Who were the Buyers?

Source: Herron Todd White Research

19%

27%

1%

42%

11%

Owner Occupier

Qld Investor

Self-managed Super Fund

Interstate Investor

International Investor

17%

2%

43%

15%

23%

Cash

Credit Union

Major Bank

Non Major Bank

Non Bank

Back End Financing

Source: Herron Todd White Research

Source: Google Images

Gold Coast Market

Unit Projects

Suburb Currently Marketed

‘Off-The-Plan’

Currently Under

Construction Total Units Approved

Total Gold Coast 5,666 3,759 5,170

Broadbeach 1,616 1,047 793

Mermaid Beach 820 32 937

Surfers Paradise 3,172 2,679 2,856

Main Beach 58 - 584

Source: CoreLogic – RP Data, Herron Todd White Research, Cordells

Gold Coast Prestige Unit Sales

‘Xanadu’

Unit 150, 59 Pacific St,

Main Beach

Jan 2018 - $5,300,000

Source: CoreLogic – RP Data, Google Images

‘Chevron Renaissance’

Unit 3250, 23 Ferny Ave,

Surfers Paradise

Jan 2018 - $9,500,000

‘Hedges 252’

Unit 702, 252 Hedges Ave,

Mermaid Beach

May 2018 - $5,250,000

Source: Google Images

Sunshine Coast Market

Sunshine Coast Unit Market

Source: CoreLogic – RP Data, Herron Todd White Research

0

1000

2000

3000

4000

5000

6000

7000

Nu

mb

er

of

Sa

les

Years

Resale

New

Sunshine Coast Prestige Unit Sales

‘Sea Pearl’

Unit 1001, 20 First Ave,

Mooloolaba

July 2018 - $4,400,000

274 sqm internal

$16,058/sqm

Source: CoreLogic – RP Data, Google Images

‘Tangalooma’

Unit 3, 63 River Espl,

Mooloolaba

Feb 2018 - $5,580,000

536 sqm internal + Marina Berth

$10,037/sqm

‘Tangalooma’

Unit 4, 63 River Espl,

Mooloolaba

Jan 2018 - $5,580,000

543 sqm internal + Marina Berth

$10,071/sqm

Source: Realestate.com.au

Housing Market

$989,984

$806,640

$679,137

$538,009

$508,081

$477,538

$466,813

$459,557

$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000

Sydney

Melbourne

Canberra

Brisbane

Darwin

Perth

Adelaide

Hobart

Median House Price

Ca

pit

al

Cit

ies

Median House Price

Source: CoreLogic – RP Data

Brisbane Melbourne Sydney

7 Cypress Dr,

Ashgrove

Jun 2018 - $1,150,000

4 bed / 2 bath / 1 car

607 sqm land area

1 Type St,

Richmond

U/C Sep 2018 - $1,650,000

4 bed / 2 bath / 1 car

227 sqm land area

162 Nelson St,

Annandale

Sep 2018 - $2,870,000

4 bed / 2 bath / 2 car

323 sqm land area

Affordability 5km from Capital City CBD

Source: CoreLogic – RP Data

Brisbane Melbourne Sydney

49 Bayberry Cres,

Warner

Jun 2018 - $460,000

4 bed / 2 bath / 2 car

674 sqm land area

2 Denison Pl,

Roxburgh Park

U/C Aug 2018 - $525,000

4 bed / 2 bath / 2 car

619 sqm land area

12 Oak St,

Parramatta

U/C Sep 2018 - $865,000

4 bed / 1 bath / 1 car

468 sqm land area

Affordability 20km from Capital City CBD

Source: CoreLogic – RP Data

5km 15km 25km

Address Sale Price Sale Date Rental

(per week)

Statutory

Charges

(per annum)

Gross Yield % Net Yield %

41 Exeter St,

West End $930,000 Aug 2018 $490 $11,620 2.74% 1.49%

13 Casula St,

Arana Hills $524,500 Jun 2018 $420 $3,224 4.16% 3.55%

19 Carlotta St,

Slacks Creek $303,000 U/C Oct 2018 $340 $2,500 5.83% 5.00%

Yields in radial km from Brisbane CBD

Source: CoreLogic – RP Data, Herron Todd White, Realestate.com.au

9-11 Hedges Ave, Mermaid Beach

Aug 2018 - $12,000,000

5 bed / 6 bath / 8 car

919 sqm living area

Gold Coast Prestige Beachfront Sales

Source: CoreLogic – RP Data, Realestate.com.au

103-105 Hedges Ave, Mermaid Beach

Mar 2018 - $11,600,000

3 bed / 3 bath / 6 car

Previously sold for $6,900,000 in 2006

Sunshine Coast Prestige House Sales

46 Seaview Tce, Sunshine Beach

Jan 2018 - $15,200,000

Approx. 1000 sqm living area

581 days on-the-market

Originally listed for offers over $18,000,000

Source: CoreLogic – RP Data, Realestate.com.au

21-23 Webb Rd, Sunshine Beach

Feb 2018 - $18,000,000

1103 sqm living area

52 days on-the-market

Originally listed for $22,000,000

• Population is growing

• Infrastructure to fuel job market

• New hubs to develop – push to near city

• Housing steady

• Units are correcting (potentially nearing the bottom)

• Land – levelling

• The head wind – tightening credit market

Summary

Disclaimer

The information contained in this report is provided in good faith and has been

derived from sources believed to be reliable and accurate. However, the report

is not intended to be comprehensive or render advice and neither Herron Todd

White nor any persons involved in the preparation of this report accepts any

form of liability for its contents. This report has copyright and cannot be

reproduced without written permission of Herron Todd White.