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RESIDENTIAL SUBDIVISION CATCHMENT ANALYSIS

1. Introduction

BIS Shrapnel’s catchment analysis service is an invaluable tool for developers to better understand that catchment of their residential subdivisions, from both a marketing perspective and a product development perspective. The service uses granular settled sales data from the state Valuer General’s office to analyse purchaser information to gain detailed insights of purchaser demand for land.

The analysis allows developers to

Identify catchment ‘hot spots’ to help with targeting marketing.

Do the locations of the ‘hot spots’ vary by lot size or price point?

Is there an identifiable gap in your catchment that you are not capturing?

Compare your catchment with that of land sales in the suburb or greater area, or with a competitor’s benchmark estate:

What does the suburb, or your competitor’s catchment look like?

Is your marketing missing any locations?

Are they capturing a market with a product that you are not producing?

More efficiently target marketing of land for different product types—i.e. by lot size, price point, etc.—to get the most our of your marketing spend.

Increase sales rates by effectively marketing land to the appropriate target market.

This paper provides a useful guide as to some of the analysis that can be undertaken. However, any analysis can be tailored to the specific requirements of the client.

2. Knowing your Catchment

A sample analysis can be seen in Chart 1.1, which maps the catchment for vacant land sales since 2008 on a selected land estate located in the Melbourne suburb of Cranbourne. This can be further narrowed to include only sales of the last twelve months or two years. Builder sales have been removed from the analysis.

Within the analysis, the catchment can be broken down by lot size (as shown in Chart 1.1) or price point (Chart 1.2). This market segmentation can be specifically tailored to the client’s needs, with as many segments as required.

Primary and secondary catchments can be defined by radius (Chart 1.1), by corridor (Chart 1.2) or even by selected post codes or geographic boundaries.

Does the composition of sales by lot size (Table 1.1) or price point vary within different parts of the catchment?

Are you getting the most out of your marketing? Does the marketing of your estate match the profile of sales?

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Table 1.1: Share of sales by lot size (%)

Estate

Primary Catchment

(Within 10 km)

Secondary Catchment

(10 to 25 km) Total sales

% of sales 350 sqm or less 14 9 12 % of sales 351 to 550 sqm 68 74 70 % of sales greater than 550 sqm 18 16 19

Total 100 100 100

Does the product demand vary by different location within your catchment?

Key metrics can be compared across the catchment to help identify differences in demand across geographic markets, ranging from a simple analysis of primary and secondary catchments (Table 1.2), to a more detailed breakdown by major source post codes (Table 1.3) that can include additional data (in this case relative household income) to gain further insights. Alternatively, a ranking of the major source post codes can be produced for purchasers of different products.

Table 1.2: Sales data by radius compared to benchmark postcode (2008–2013)

Example Estate

Primary (Within 10

km)

Secondary (10 to 25

km) Total Catchment Postcode 3977

Median sale price ($) 181,000 178,000 180,000 179,750 190,000 Median land size (sqm) 462 448 462 462 512 $ per sqm 383 378 378 378 386 Share of sales (%) 35 30 100 70 100

Table 1.3: Top 10 purchaser postcodes by share of sales – Example estate (2008–2013)

Rank Postcode Suburb Median ($) Land size (sqm) $ per sqm HH Income* Share of sales

1 3805 Narre Warren $179,500 454 376 107% 14%

2 3806 Beaconsfield $177,500 448 385 118% 9%

3 3175 Dandenong $178,000 499 371 67% 6%

4 3977 Cranbourne $188,000 512 376 97% 6%

5 3976 Hampton Park $184,500 448 393 87% 5%

6 3802 Endevour Hills $175,500 448 389 99% 4%

7 3174 Noble Park $185,500 501 375 70% 3%

8 3178 Rowville $180,000 448 398 128% 3%

9 3803 Hallam $176,500 448 387 87% 2%

10 3168 Clayton $174,000 464 367 72% 2%

*Weekly household income as a percentage of the Melbourne Metropolitan average

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Chart 1.1: Sales by location of purchaser by land size (sqm).

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Chart 1.2: Sales by location of purchaser by price

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3. Competitor/benchmark catchment analysis

Compare your catchment with the catchment of competitor estates, the catchment of a benchmark estate, or with the catchment of the whole suburb to find any gaps in the catchment or markets that you are not reaching.

Table 1.4 below shows the top ten catchment post codes of all (non-builder) vacant land sales within the Cranbourne post code (post code 3977).

Notable inclusions that are not captured by the subject estate are Frankston, Carrum Downs and Langwarrin, suggesting that additional potential markets are not being fully captured.

Alternatively, these three suburbs have also attracted purchasers at higher price points (and larger lot sizes) than the subject estate, suggesting that marketing of any higher priced releases can also be targeted to these suburbs.

The catchment maps of Chart 1.1 and 1.2 can also be overlaid with competitor/benchmark catchments to highlight any differences. The catchment maps can be further narrowed—i.e. what does the 600+ square metre lot size only catchment of the suburb look like? What about the $200,000+ land price only catchment? Does the small lot catchment differ markedly to your own small lot catchment?

Table 1.4: Top 10 purchaser postcodes by share of sales – All sales in postcode 3977 (2008–2013)

Rank Postcode Suburb Median ($) Land size (sqm) $ per sqm HH Income* Share of sales

1 3977 Cranbourne 196,000 555 376 97% 15%

2 3805 Narre Warren 185,500 510 376 107% 7%

3 3806 Beaconsfield 184,000 534 367 117% 5%

4 3175 Dandenong 188,500 495 405 67% 4%

5 3199 Frankston 192,500 517 363 78% 4%

6 3201 Carrum Downs 195,000 536 351 89% 3%

7 3976 Hampton Park 185,000 510 399 87% 3%

8 3910 Langwarrin 199,000 570 359 104% 3%

9 3174 Noble Park 189,950 478 418 70% 2%

10 3975 Lynbrook/Lyndhurst 199,000 513 402 128% 2%

*Weekly household income as a percentage of the Melbourne Metropolitan average

© BIS Shrapnel Pty Limited

As well as the geographic catchment, the product mix of your estate can be compared with the greater area or a benchmark estate (as shown in Chat 1.3):

How does your product profile vary from that being offered in other estates and/or the broader area?

Are there any gaps in the product that you are offering?

Chart 1.3: Percentage of sales by lot size (2008-2013)

4. Builder sales

Not all land sales are made to individuals, many are made to builders and businesses who develop the land and then on-sell to individuals. Sales to these purchasers can be identified and analysed in a similar way to individuals.

Additional analysis can be made of builder sales. Table 1.5 shows key metrics for builder sales vs the total market. However, we can also compare builder sales within estates and across competitor estates. Who is capturing the builder market compared to your estate and what are the builders buying?

Table 1.5: Postcode 3977 (Cranbourne) by purchaser type (2008–2013)

Postcode 3977 - Cranbourne Individuals Builder sales

Median sale price ($) $190,000 $181,000

Median land size (sqm) 512 448

$ per sqm 386 396

% of sales 86% 14%

5. Pricing

The cost for a catchment analysis that includes a standard set of charts/tables and brief commentary as indicated above ranges from $3,000 to $5,000 plus GST, depending on the depth of profile, number of competing estates/regions to be analysed, etc.

Alternatively, if you have more specific requirements for a catchment analysis, we are happy to provide you with a quote for a more tailored product.

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Example Estate

Post code 3977

Share of sales (%)

Lot size range (sqm)