MARKET

OUTLOOK

PROPERTY

CYCLE

UPSWING

PEAK

DOWNTURN

TROUGH

RECOVERY

TEN CYCLES SINCE 1880

AVERAGE 8 YEARS

5 YEARS UPSWING @ 11% pa

3 YEARS DOWNTURN @ - 5% pa

PAST CYCLES AVG 8.5% PA

PROPERTY CYCLE?

1. LIQUIDITY EASE & COST OF FUNDS

2. ECONOMY PROFITS & EMPLOYMENT

3. DEMAND HOUSEHOLD FORMATION;

SALE VOLUMES & TIME TAKEN TO SELL

4. RETURNS CAPITAL GROWTH/YIELDS

5. SCARCITY SUPPLY V. DEMAND & FOR SALE/RENT

6. CONFIDENCE GREED/CAUTION

7. FACTOR X SMSF; CHINA; FIRB & AUSSIE $

NEXT

PROPERTY CYCLE

AVG 5% PA

WHY, SAY, 5% PA

1. LIQUIDITY LOW INTEREST RATES

2. ECONOMY STRUCTURAL ISSUES & BUDGET DEFICIT

3. DEMAND CHANGING DEMOGRAPHICS

4. RETURNS LOW AFFORDABILITY

5. SCARCITY SPARE CAPACITY; CHANGING DEMAND

6. CONFIDENCE MORE REACTIONARY – INTERNET/CELEBRITY

7. FACTOR X CHINA; COSTS & NEW URBAN FORMS

PROPERTY

CLOCK

12

9

6

3

12

9

6

3

UPSWING

PEAK

DOWNTURN

TROUGH

RECOVERY

12

9

6

3

UPSWING

PEAK

DOWNTURN

TROUGH

RECOVERY ENQUIRY INCREASING

RISE IN BUILDING ACTIVITY

RISING SALES

RETURN PRICE GROWTH

IMPROVING RENTS

MORE EQUAL MARKET

ENQUIRY DECLINING

ABANDONED PROJECTS

FALLING SALES

FALLING PRICES

FALLING RENTS

VERY cautious MARKET

STAGNATE ENQUIRY

SLOW BUILDING ACTIVITY

FLAT SALE VOLUMES

STEADY/FALLING PRICES

STABLE RENTS

BUYER’S MARKET

HIGH ENQUIRY

RAMPED UP APPROVALS

FAST SALES

STRONG PRICE GROWTH

RENTS PEAKING

SELLER’S MARKET

12

9

6

3

CANBERRA

HOBART

MELBOURNE ADELAIDE

BRISBANE

SYDNEY

PERTH

DARWIN

MARKET

INDICATORS

TOTAL EMPLOYMENT GROWTH

MATUSIK ANALYSIS

SOURCE: ABS 6291.0.55.011

FEBRUARY 2014.

BRISBANE CITY

TOTAL POPULATION

AS AT MID-2104

ANNUAL CHANGE

LAST YEAR

TOP 10 URBAN AREAS IN AUSTRALIA

2

4 5

BRISBANE 2.3M 45,000 3 RANK BASED ON

TOTAL POPULATION

PERTH 2.0M 65,000

ADELAIDE 1.3M 14,000

MELBOURNE 4.4M 79,000

NEWCASTLE 431K 10,000

CANBERRA 389K 14,000 1

3 6 7

8

9

10 SYDNEY 4.8M 64,000

BRISBANE 2.3M 45,000

GOLD COAST 615K 23,000

SUNSHINE COAST 297K 11,000

WOLLONGONG 286K 3,100

BRISBANE CITY TOTAL RESIDENTIAL SALES

MATUSIK ANALYSIS

SOURCE: RPDATA & QLD

GOVERNMENT.

QUARTERS.

MATUSIK ESTIMATE IN RED.

BRISBANE CITY RESIDENTIAL PRICES $

ENTERING MARKET RECOVERY

POPULATION GROWTH

POSITIVE OPINION & COMMENTARY

SOUTHERN INVESTOR FOCUS

ENQUIRY & SALES INCREASING

JOB CREATION

PRICE & RENTAL GROWTH EXPECTATIONS

BUT LIMITS TO GROWTH & DEMAND

HOUSING

DEMOGRAPHICS

BRISBANE CITY HOUSING DEMO STATISTICS

60% NO CHILDREN AT HOME

25% COUPLES ONLY

25% LIVE ALONE

BRISBANE CITY HOUSING DEMO STATISTICS

60% NO CHILDREN AT HOME

25% COUPLES ONLY

25% LIVE ALONE

70% DETACHED HOUSES

20% APARTMENTS

10% ATTACHED DWELLINGS

BRISBANE CITY HOUSING DEMO STATISTICS

60% NO CHILDREN AT HOME

25% COUPLES ONLY

25% LIVE ALONE

70% DETACHED HOUSES

20% APARTMENTS

10% ATTACHED DWELLINGS

50% 4+ BED HOUSES

30% 3+ BED APARTMENTS

60% 3+ BED ATTACHED

AFFORDABILITY

DETACHED HOUSE

$550,000 RATIO 6.9 TO DIS. INCOME

$495 WEEK 38% INCOME

AFFORDABILITY

DETACHED HOUSE

$550,000 RATIO 6.9 TO DIS. INCOME

$495 WEEK 38% INCOME

ATTACHED DWELLINGS

$410,000 RATIO 5.1 TO DIS. INCOME

$395 WEEK 30% INCOME

AFFORDABILITY

DETACHED HOUSE

$550,000 RATIO 6.9 TO DIS. INCOME

$495 WEEK 38% INCOME

ATTACHED DWELLINGS

$410,000 RATIO 5.1 TO DIS. INCOME

$395 WEEK 30% INCOME

A FORCED SHIFT IN DEMAND

MARKET

DIRECTION

GROSS RENTAL YIELDS - LONG TERM TENANCIES

TRADITIONAL ATTACHED PRODUCT/

HOUSES SMALL-LOT HOMES

SYDNEY 3.9% 4.7%

MELBOURNE 3.4% 4.2%

BRISBANE 4.2% 5.5% ADELAIDE 4.3% 4.9%

PERTH 4.2% 4.8%

CAPITALS 3.9% 4.7%

MEDIAN DWELLING PRICES – AS AT JAN 2014

SYDNEY $660,000 13.4% PA

MELBOURNE $553,000 11.9%

BRISBANE $462,000 3.8% ADELAIDE $390,000 2.5%

PERTH $525,000 6.9%

CAPITALS $534,000 9.8%

12

9

6

3

CANBERRA

HOBART

MELBOURNE ADELAIDE

BRISBANE

SYDNEY

PERTH

DARWIN

BETTER

APARTMENT BUYING

LOCATION

EMPLOYMENT

INFRASTRUCTURE

“PULSE POINT”

SUPPLY V. DEMAND

EVERTON PARK AREA

UNDERLYING DEMAND 375pa

RECENT SUPPLY 390pa

BALANCED

INNER NORTH

UNDERLYING DEMAND 750pa

RECENT SUPPLY 1,500pa

OVERSUPPLIED

INNER WEST

UNDERLYING DEMAND 425pa

RECENT SUPPLY 250pa

UNDERSUPPLIED

INNER SOUTH

UNDERLYING DEMAND 675pa

RECENT SUPPLY 725pa

STILL BALANCED

SITE

OVERALL SIZE

NO. OF DWELLINGS

OUTLOOK

ORIENTATION

ELEVATION

DESIGN

PRODUCT SIZE

FLOOR PLATE LAYOUT

LIGHT + PRECEPTION OF SPACE

LIFT TO APARTMENT RATIO

SHARING – ENSUITES, EQUAL BEDROOMS

STORAGE

OWNER-RESIDENT RESALE APPEAL

FOUR F’S

FIXTURES

FINISHES

FITTINGS

FACILITIES

BODY CORP. FEES

MATUSIK.COM.AU

FOCUS REPORT

BRISBANE

RENTAL MARKET

MATUSIK.COM.AU

FOCUS REPORT

BRISBANE

RENTAL MARKET

THIS MATUSIK PRESENTATION IS OPINION & NOT ADVICE.

THE AUDIENCE SHOULD SEEK THEIR OWN PROFESSIONAL

ADVICE ON THE SUBJECT BEING DISCUSSED.

END

NOTES

RESIDENTIAL CYCLE

MARKET RECOVERY

COMING CYCLE/S LESS OVERALL GAINS

BRISBANE CITY MARKET IN RECOVERY

LIMITS TO CAPITAL GROWTH

DRIVE RENTAL RETURNS

‘ALTERNATE HOUSING’ BETTER INVESTMENTS