Understanding Property Cycles - How to Buy in Tomorrow's Hot Markets

Ian Hosking Richards &Rocket Property GroupUnderstanding Property Cycles – How to buy in tomorrow’shot markets

Understanding Property Cycles

When to buy Where to buy How to buy

The Basics1. Any populous area will experience around

3 years of strong growth in any doubling cycle

2. The remaining years of cycle = subdued3. Serious investors identify drivers of

capital growth & project forward 4. Inexperienced investors place more

emphasis on recent past performance

Long Term Growth PotentialMedian House Prices ($’000)

1973 1983 1993 2003 2013 2016

Sydney $27 $81 $188 $454 $694 $1M

Melbourne $20 $23 $126 $276 $550 $725

Brisbane $18 $56 $137 $249 $446 $521

Adelaide $16 $48 $111 $225 $398 $498

Perth $19 $49 $113 $205 $525 $568

Darwin N/A N/A $150 $211 $652 $613

Hobart $15 $43 $104 $173 $310 $345

Canberra $27 $68 $159 $294 $579 $654

Sources: BIS Shrapnel, APM, REIV, Various State VG Data, Dept. Of Housing, Domain House Price Report

Examples of Strong Growth Phases

Perth 2002 - 2005

Melbourne2007 - 2010

Sydney 2012 – 2016

The different property cycles in Australia are not typically in sync at any given time!

A Typical Property Cycle

Peak

Correction

Bottom/Opportunity

Growth

The Astute Property Investor

2002 PERTH

2005

2007 MELBOURNE

2010

2012 SYDNEY

2016?BRISBANE

What to look for

Areas that are undervalued

Population Growth

Infrastructure spendingEconomic and employment driversSupply and demand

An area to look out for

The Sunshine Coast

Does it have?

• Population Growth

• Infrastructure

• Economy

• Employment

• Supply/Demand

An area to look out for

The Sunshine Coast Population Growth

The Sunshine Coast will grow by 34% and more than 97,000 people by 2026

Approx 290,000 live on the Sunshine Coast. The area is projected to grow by 8,000 new residents each year.

Need to build up to 2,300 new dwellings each year to support population growth. 1,354 building approvals granted in 2016

An area to look out for

The Sunshine Coast

Does it have:

• Population Growth

• Infrastructure

• Economy

• Employment

• Supply/Demand

An area to look out forThe Sunshine Coast Infrastructure

Building of the new Kawana Town Centre $2bn Light rail & Caloundra CBD upgrade Sunshine Coast University Hospital . Will

be the largest health hub in the Southern Hemisphere

SunCentral – A brand new city centre has just commenced construction in Maroochydore

$450m Sunshine Coast Airport expansion & conversion into an International Airport

$350m Sunshine Plaza Upgrade

An area to look out for

The Sunshine Coast

Does it have:

• Population Growth

• Infrastructure

• Economy

• Employment

• Supply/Demand

An area to look out forThe Sunshine Coast Economy

The Sunshine Coast economy has doubled in size in the last decade.

The economy is predicted to grow in a strong and sustainable pattern over the next 20 years to reach A$33 billion in 2033

SunCentral will give a $5.9 billion boost for the Queensland economy

Oceanside Kawana will contribute $828 million annually to the local and state economy

Currently the second highest performing regional economy in Queensland

An area to look out for

The Sunshine Coast

Does it have:

• Population Growth

• Infrastructure

• Economy

• Employment

• Supply/Demand

An area to look out for

The Sunshine Coast Employment

Approx. 140,000 local residents are employed on the Sunshine Coast. 87% work in the area.

Over 40,000 new jobs being created in the area Sunshine Coast University Hospital. Around 4,700

jobs next year- Over 6,000 by 2021 Oceanside Kawana around 10,000 jobs in next 5

years The Sunshine Plaza expansion 2,900 jobs on

completion SunCentral - Expecting 30,000 jobs over 10 years Youi headquarters 1,000 jobs Airport expansion 10,000 jobs

An area to look out for

The Sunshine Coast

Does it have:

• Population Growth

• Infrastructure

• Economy

• Employment

• Supply/Demand

An area to look out for

The Sunshine Coast Supply/Demand Sunshine Coast regional current residential

vacancy 1.5% compared with Brisbane CBD 4.3%, Gold Coast 1.8%, Sydney 1.8%

Forecasting a 5% lift in weekly rents and anticipate median dwelling values to rise by between 5% and 10%.

30% of the Sunshine Coast’s households rent.

Shortage of quality House and Land properties to meet the growth of families moving up to Sunshine Coast to embrace new employment opportunities, lifestyle and affordable dwellings.

An area to look out for

The Sunshine CoastMeets the criteria!

• Population Growth

• Infrastructure

• Economy

• Employment

• Supply/Demand

If you have any more questions or would like to test your Readiness to Invest, come visit our website

Thank you

Information or advice provided may be of a general nature only and may not be applicable to your specific

circumstances.

Contact the Rocketeer Property Experts

info@rocketpropertygroup.com.au

1300 850 038