Sydney Housing Market - Current State and Future Prospects August 2011 Dr Andrew Wilson - Senior Economist

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House Price Index – Major Capitals

Major Capitals – 11 year House Price Performance 200% increase all capitals – Sydney 100% Sydney prices flat Perth prices boom Mini prices boom in Brisbane 2007 National prices surge –Melbourne rises 29% in a year

Market Stimulus – First Home Owners Grant Boost

Affordability Collapses - Strong Price and Interest Rate Rises

House Price Relativities – Major Capitals May Quarter 2011

Housing Affordability – Major Capitals Median House Prices $1 Million +

House Rental Market – Major Capitals Quarterly Weekly Asking Rents

House Rental Relativities – Major Capitals May Quarter 2011

Housing Supply – Major Capitals

Housing Supply – Major States March Quarter 2011

ABS Household Growth – Major Capitals

Economic Growth – Major Capitals Quarterly ABS Unemployment Rate

Economic Growth – Major Capitals June ABS Unemployment Rate

Major Capitals Housing Market Prospects Generally –Economic growth to accelerate fuelled by resources boom – $300 billion projects in pipeline –Prospect of full employment and skilled labour shortages –Upward pressure on wages –Mixed sector performance and moderate inflation - interest rates on hold –Population increases fuelled by higher immigration –High AUD implications for some regions –Shortage of supply to continue in most areas

Sydney Housing Market Prospects –Market recovery on track –Bottom to middle price sectors active –Tight rental market –Chronic housing shortages –Upper market to remain quiet –Western suburbs growing demand –Moderating economic performance –Early signs of increased FHB and investor activity –Price growth up to 3 percent for 2011

Sydney Suburban Markets

Sydney Regional Markets –Sydney western suburban regions popularity rising –Largest increase in sales of all regions over past 6 months –Sydney West up by 71 percent –South-West up by 64 percent –Sydney Inner-West popularity fell by 2 percent –Western regions best value –Sydney South-West average price $496,921 –Sydney West $525,344

Sydney Regions – 6 Monthly Sales Growth

Sydney Regions – Average Sale Price 6 Months to June

Sydney Western Suburbs Popularity –Blacktown remains the most popular western suburb followed by Kellyville and Quakers Hill –Mount Annan, Ingleburn and Prestons are the most popular South-West suburbs –Strathfield is Sydney’s most popular Inner-West suburb followed by Leichardt and Earlwood –Kellyville and Kellyville Ridge are recording high levels of sales growth with current medians of $699,000 and $646,000

Sydney’s West – Most Popular Suburbs

Sydney’s West – Most Popular Suburbs Median House Prices

Sydney Western Suburbs Popularity Set to Continue –Sydney affordability barriers set intensify due to housing shortage –Will remain Australia’s most expensive city for housing –Buyers seeking value in the below $1million price range –Close to transport – freeway, train –Adequate amenities and facilities – schools, hospitals, cafes, shops etc –Pockets remain in Inner-West but going fast – Burgeoning growth in outer north-west, Mac-mansion communities – local lifestyle versus access to CBD

Sydney –The Gold Standard for Australian Property –Chronic housing shortages, population growth and a resilient economy together with the magnetism of the Harbour and its world-class attractions all underpin the investment security of Sydney real-estate. –Despite the cyclical ebbs and flows of housing market activity Sydney remains the gold standard for Australian property. –The west of Sydney currently offers investment opportunities as buyers seek to maximise their value in a restricted market characterised by high underlying demand and restricted supply

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