Month in Review September 2019 The Month in Review identifies the latest movements and trends for property markets across Australia. Click on any state or page number Contents for immediate access Feature –The Out of Towners 3 Commercial - Retail 4 New South Wales 6 Victoria 9 Queensland 10 South Australia 17 Western Australia 19 Australian Capital Territory 21 Residential 22 New South Wales 25 Victoria 38 Queensland 43 South Australia 51 Western Australia 53 Northern Territory 57 Australian Capital Territory 59 Tasmania 60 Rural 61 Market Indicators 66 Disclaimer This publication presents a generalised overview regarding the state of Australian property markets using property market risk-ranking scales. It is not a guide to individual property assessments and should not be relied upon. Herron Todd White accepts no responsibility for any reliance placed on the commentary and generalised information. Contact Herron Todd White to obtain formal, specific property advice on any matters of interest arising from this publication. All rights reserved. This report can not be reproduced or distributed without written permission of Herron Todd White. Month in Review The Out of Towners September 2019 How population movements are driving Australia’s property markets You’ve probably seen those infamous Spaghetti blue-collar jobs. Affordability drivers are magnetic Western films. to lifestyle seekers such as the financially secure or retirees. Professional types chasing personal A small, rural settlement with folk living a modest network opportunities will choose the nation’s life. A saloon, sheriff and trading store lining the numbers in this September issue. Our team is centres of commerce, while modern day business main street and people simply getting on with dishing the info on the large transactions lighting nomads will operate wherever there’s a decent Wi- getting on… and then, a stranger rides into town. up their radars, both sales and leases - multi-million Fi connection. Suddenly, all hell breaks loose and the fabric dollar transactions that shift like monoliths through of their quiet existence is ripped apart by the This month, we’ve asked each and every Herron the office space and send waves of change in their newcomer seeking justice. Todd White office to take a look at how movements wake. Dig deep into the commentary and you’ll among the population are effecting their discover how these major deals affect the area. I like watching some old-school Clint Eastwood, but communities and driving the demand for property. FEATURE in the modern world, the arrival of new residents to Finally, it’s rural time and we’re keeping up with the COMMERCIAL theme from the commercial section. This month, our team is discussing the really large sales that are Staying up to date about who is moving where can help you occurring across the nation. We’re not just talking keep ahead on likely price changes in your areas of interest. in terms of price – some of these properties are the size of a small nation. It’s a head-turning array of big country transactions for avid readers to digest. population centres is a cause for celebration, not It’s not just an analysis of where they’re going, but So, there you have it – another sterling issue of the mayhem. It should be particularly celebratory for where they’re coming from as well. Month in Review. property owners. One interesting element of the study is that the Just ensure that when new arrivals make their way Whether it’s a capital city or a regional township, dominant demographic coming into your town to your town, you don’t close the shutters and hide opening up to visitors and new residents breathes might influence prices for a particular property under the bed. Instead, contact your local Herron a bit more life into your area’s economy and often type, so staying up to date about who is moving Todd White office and see how markets will react, helps drive price growth and rental gains. where can help you keep ahead on likely price so you can not only welcome newcomers, but profit changes in your areas of interest. as well. But the factors that bring in people and help them settle can vary as widely as our Aussie landscape. For our commercial readers, this month’s topic is Major industries can see an increase in well-paid, the office sector and we’re dealing with the big 3 Office September 2019 Month in Review National Property Clock: Office September 2019 Entries coloured purple indicate positional change from last month. Ballina/Byron Bay Melbourne Coffs Harbour South East NSW Dubbo Sunshine Coast Illawarra PEAK OF MARKET Geelong Gold Coast Mid North Coast Newcastle Approaching Starting to Lismore Sydney Peak of Market Decline Ballarat DECLINING Alice Springs COMMERCIAL RISING Echuca MARKET MARKET Start of Approaching Recovery Bottom of Market Adelaide Emerald Gladstone Brisbane Ipswich BOTTOM OF South West WA C’berra/ Q’beyan Mildura MARKET Central Coast Toowoomba Bundaberg Mackay Cairns Perth Darwin Rockhampton Liability limited by a scheme approved under Professional Standards Legislation. Hervey Bay Townsville This report is not intended to be comprehensive or render advice and neither Hobart Wide Bay Herron Todd White nor any persons involved in the preparation of this report accept any form of liability for its contents. Launceston 5 Month in Review New South Wales September 2019 Overview CBD. There is also no questioning its prime location, Vacancy rates remain The commercial sector has traditionally offered set on the southern side of Martin Place within the very low across the CBD, investors a way to boost yield in their portfolios, but primary city core precinct. reported at 3.7% as at as you’ll see in our report, there are some surprises. July 2019 (PCA), down On a much smaller scale, the strata office market from 4.1% in January. This month, we’re taking a look at major has seen a number of strong results, continuing to Low vacancy continues transactions, both sales and leases, in office push square metre rates to unprecedented levels. to be driven by low markets around the nation. Noonan Property’s sale of Level 10 (398 square supply which in turn metres) of Heritage listed Culwalla Chambers, at Quite a few of our major centres are seeing continues to see above 3.7% 67-69 Castlereagh Street, achieved $6.395 million strong buyer demand for office space and this average rental growth. at auction, reflecting $16,068 per square metre Vacancy rates has translated into tight yields. Other localities Supply was particularly of lettable area. A result such as this shows the across the CBD, are experiencing a struggle, which can spell hampered during the continued strength of the office strata market, reported as at opportunity for investors keen to purchase at the first half of 2019 by however the number of transactions does appear July 2019 (PCA). bottom of the cycle. withdrawals outweighing to have slowed. supply, reflecting Sydney On the leasing side, while there have been a -23,400 square metres of net supply (PCA). A total The Sydney CBD office market has seen several number of large leases across the CBD, it is of 32,039 square metres of office accommodation COMMERCIAL big transactions so far in 2019 in both strata and particularly worth noting the continued and across eight sites was taken offline in the first half freehold spaces. growing presence of WeWork, who have recently of 2019. Five of these sites are situated in the city signed a 12-year lease agreement over 11,000 core precinct. The most significant transaction, at $800 million, square metres of office space across ten floors at was Dexus and its unlisted Dexus Wholesale New approvals for office accommodation are low 320 Pitt Street. This is WeWork’s largest Australian Property Fund’s purchase of GPT Group’s half- across the CBD, with approvals being generally lease to date and a reflection of the growing appeal share in the MLC Centre at 19-29 Martin Place. focused on residential and hotel redevelopment of co-working space. WeWork has also fully secured Dexus already owned fifty per cent of the property rather than traditional office space. As an example, 1 Sussex Street at Barangaroo, which will reach prior to this transaction and now with full control of there are currently more than 20 hotels either completion at the end of 2019 and is anticipated the property, the transaction cements them as the under construction or approved for redevelopment. to open in early 2020. It’s unclear what the impact largest office landlord in Australia. At 67 storeys, That said, there is new office supply on the horizon, of co-working space will have on the wider market, the MLC Centre was for many years the tallest however the majority of this will not come online however it does present new options for tenants office building in the country and the site remains until 2020 or 2021. looking for more flexible options. one of the largest freehold sites within the Sydney For the time being, CBD rents are anticipated to remain strong, although will likely moderate, There are currently more than 20 hotels either under until supply catches up to demand and values are construction or approved for redevelopment. likely to remain strong for good quality stock. 6 Newcastle Wollongong Local agents are reporting a healthy level of Month in Review enquiry for office space in quality, well placed September 2019 Office investment activity in Newcastle has been Sales transactions in the office sector have slowed buildings with MMJ securing several tenants for fairly subdued over the past 12 months.