review

The month in

MARCH
2010

We advise. You decide.

- Property Advice and Valuations
- Tax Depreciation Schedules
- Research reports and other services
- Quantity Surveying
The month in review

Contents

CONTENTS
2
Page Topic
3 Feature - “The Prestige” Blue Ribbon
Property in a Moving Market

4-6 Herron Todd White Happenings

7 - 17 Commercial – RETAIL

18 - 34 Residential

35 Contacts

36 - 43 Rural

44 - 60 Market Indicators

Peace of mind for your property decisions.

The month in review

“The Pretige”
Blue Ribbon Property in a Moving Market
When the original concept was brought forward by Richard Branson for Virgin Airlines, he felt that
rather than the traditional classifications, aircraft seating should be designated “Upper Class”, “Middle
Class” and “Riff-Raff”. Unfortunately some clever marketing type probably talked him out of what would
have proved a brilliant opportunity for high profile libertarians to cry-fowl and conservative talkback to

FEATURE
counter that any complaints about the plan were “political madness gone mad”. Frankly, I like to think
that Sir Richard would occasionally sit in his spacecraft and muse that not going ahead with the seating
plan was one of his few errors in judgment.

It’s always been the way. Whilst plenty of hard yakka is conducted by those in the cramped seats, you
can’t deny that most of the trailblazing is completed by the folks at the pointy end of the aircraft. Sure,

3
the comfy pillows and free slippers come at a cost, but it does leave plenty of time as you rack up the
frequent flyer miles to consider where the world is heading, if you’re happy with the charted course and
how you can change it if it’s time for a shake up.

This month, we have decided to consider those folks programming the satellite navigation in regards to
money being no object. The ground breakers who can afford to get what they want and know how the
game is played.

These property powerful quite often have the means to sit taut for extended periods waiting for the
opportunity to peek above the bushes before pouncing upon what seems to be a crackerjack deal. They
are the buyers and sellers who mostly don’t worry about whether interest rates are going up 0.25% or
the All Ords is having a slow day because they are geared to take on the cycles and do what they flippin’
well like. For some, it’s a case of why bother with the long queue through security and waiting to be
asked to be seated in rows one to five – I’ll just buy my own plane and let everyone else choose between
the chicken or beef.

Our HTW offices have taken stock this month of how high end property is playing out given both last
year’s developments, and this year’s slow but steady increase in confidence. This issue’s commercial
contribution on the retail sector sees an unparalleled collection of the country’s best retail investments
and how they are performing in the current climate. The results are varied and stakes are high, but
despite the dire straits of ‘09, there are signs that in some areas things are getting rosy.

For those with an eye for the La-De-Da of residential, there is a tasty collection of properties within sure
to turn most readers a particular shade of green. Best of all, a little insight into how the other half are
viewing real estate is likely to provide an interesting perspective on how your local market as a whole is
playing out post GFC.

So whatever you flavour in property, take your seat, watch the safety briefing, order the good cognac
and enjoy a little bit of prestige as Cpt. HTW gets clearance – but don’t forget as always to call the cockpit
and find our exactly how much turbulence lies ahead in your piece of real estate property sky.

Tally ho and chocks away!

Kieran Clair
Certified Practising Valuer
1 MARCH 2010

kieran.clair@htw.com.au
The month in review

“Herron Todd White Happenings”

Herron Todd White merges with Allsopps’
Herron Todd White’s Gold Coast operation has extended its reach into northern NSW after merging with
leading Lismore-based valuers Allsopp and Associates.

Herron Todd White Gold Coast Director Tod Gillespie said the merger would combine the best of two
worlds.

“The merger will match Allsopps’ unsurpassed local knowledge and expertise which combines with the
national strength and scope of the Herron Todd White operation,’’ said Mr Gillespie.

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“I really believe the merger will create stronger and more effective business to meet the needs of
customers in northern New South Wales.”

Allsopp and Associates, which has six valuers on staff and six support employees, is the oldest valuation
firm in northern NSW.

It services the needs of clients from Grafton in the south to Tweed Heads in the north and as far west as
Kyogle. For specialised valuations and litigation tasks the services are extended to well outside those
localities.

The merger lifts the number of offices in the Herron Todd White network to 55 throughout Australia.

Allsopp and Associates Director Owen Allsopp said the merger would have significant benefits but it
would be business as usual from the clients’ perspective.

‘‘It is important for clients to know that from their point of view, very little will be changing even though
we are merging with Herron Todd White,’’ said Owen.

“I also want to make it very clear that I am staying on and will be continuing and expanding my valuation
and litigation role”.

As part of the merger David Sullivan will be appointed Managing Director of the Lismore office while
Owen will concentrate on his growing client base.

David Sullivan is a well respected valuer in the northern NSW region, having specialised in residential
and commercial markets over the past 15 years.

Owen has an excellent reputation for representing landholders during negotiations with Government
Departments in relation to compulsory property acquisitions.

“The Roads and Traffic Authority are continually looking to buy land along their planned routes for
major roadways and I really enjoy representing the landholders during these negotiations,’’ Owen said.

“The bulk of the firm’s work, however, was associated with determining valuations for mortgage
providers such as banks and other financial institutions”

The firm also does extensive work for Councils, the State Government and Federal Government
Departments in the region.

Owen said the firm was fortunate to have a large and loyal base of customers and he looks forward to
the business continuing to grow into the future.
The month in review

“Herron Todd White Happenings”

Herron Todd White the ‘Magnificant Seven’
Herron Todd White, Australia’s largest independent property valuation and advisory group, has secured the
appointment of seven of Australia’s leading commercial property experts.

Mr Brendon Hulcombe, Chief Executive Officer of Herron Todd White, said, “The recent appointment of
seven new executives – all leaders in their field, cements Herron Todd White’s position as a driving force in
commercial property valuation.”

“We offer a high level of commercial valuation expertise backed by a staff list that reads like a ‘who’s who’

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of commercial property” added Mr Hulcombe.

The seven recent executive appointments at Herron Todd White are:

Michael McNamara: Well-known from his former high profile role with RP DATA and as General Manager of
APM, Michael McNamara recently joined Herron Todd White as General Manager, Sydney/ACT/SE NSW.

Mark Skeed: Formerly a Commercial Valuation Director with Cushman and Wakefield, Mark Skeed takes up
the role of Manager of Herron Todd White’s Commercial Division - Sydney/ACT/SE NSW.

Bernie Smith: Previously a Commercial Director with Knight Frank in Valuations, Bernie Smith is now
responsible for Commercial operations in Herron Todd White Tasmania and will continue some work in
Melbourne.

Shayne Kirstenfeldt: Shayne Kirstenfeldt joins Herron Todd White Brisbane after forging an outstanding
reputation with Westpac Institutional Bank, where he held the role of Director, Property Risk. Mr Kirstenfeldt
adds considerable weight to the Brisbane Project Development team undertaking valuations of residential
land subdivisions, high rise towers and small unit developments.

Michael Simson: Formerly Manager of Property Finance with the Bank of Queensland, Michael Simson
brings extensive property experience to the Project Development team at Herron Todd White Brisbane.

Jim Parmeter: Previously an Associate Director with CB Richard Ellis, Jim Parmeter has joined Herron Todd
White’s Sydney team, focusing his expertise on Government Portfolio valuation and advisory.

Tim Stevens: A property valuer for over 20 years, the early part of Tim Stevens’ career was spent with
Barclays and St George Bank before specialising in the Australian debt and equity markets. Mr Stevens
joins the Sydney team focusing on key Commercial client management.

Along with these new appointments, Brendon Ptolomey, formerly a national Director of Herron Todd
White, was recently appointed to the role of Deputy Chairman of the Board after ten years with Herron
Todd White Perth.

Brendon Hulcombe said, “Our recent executive appointments in the Commercial Valuation and Advisory
division will provide a secure foundation for Herron Todd White to meet its growth targets for 2010”.

Herron Todd White, a private Australia property valuation and advisory organisation with 650 employees
has an annual turnover in excess of $70 million, of which commercial property activities comprise over $20
million.
The month in review

“Herron Todd White Happenings”

Top Level Merger Vote of Confidence in
Downs Economy
Leading Darling Downs property advisory and valuation practice, Herron Todd White has passed a huge
vote of confidence in the regional economy by announcing a major expansion today.

From 1 March, Herron Todd White Darling Downs will merge with leading Toowoomba based property and
advisory firm, Stantons Valuers in a deal that will cement Herron Todd White as by far the biggest player in

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the Downs property advisory and valuation sector. “Operating for over 20 years and under the guidance of
Director Brad Neill since 2003, the Stantons Valuers operation and their network of offices in Toowoomba,
Dalby and Warwick will substantially boost Herron Todd White’s reach into the region,” founding Herron
Todd White Director Mr David Nilon said at the announcement in Toowoomba this morning.

Mr Nilon has been with Herron Todd White since it commenced operating in Toowoomba in 1985. Since
then, the company has grown significantly and now services a large proportion of the Darling Downs and
South West Queensland with offices in Roma and Goondiwindi. The merger will bring the total number of
offices to five including Dalby and Warwick.

“This merger is a huge vote of confidence in the economy of the Darling Downs and where we think the
property market is heading,” David said at today’s announcement.

The organisation will employ some 41 people and service all of Australia’s leading banks and lenders
as well as the business and Government communities. They will also continue their support of the local
community through the various sponsorships they offer including the Endeavour Foundation through its
annual rally.
The month in review
Commercial Overview
As we have noted time and time again over the past year
and a half, retail is one sector that is highly sensitive to an
economy confused about which way to turn. It’s all about
consumer confidence leading on to calm tenants assured
that they will maintain cash flow. This is the formula that
equals growth in the retail sector and 2009 proved a
tough row to hoe for plenty of participants.
Fortunately, things are starting to look up and retails
in many areas may now prove a sound prospect in the
medium to long term. As with other sectors, those
operators at the high end can provide a beacon of market
direction. If buyers are able to access the funds for the
cream of the retail crop, they will have been looking hard
at the opportunities presented over the past year. As
confidence grows, plenty will be prepared to jump.
This month’s contributions shine a light on where the best
retail property sits around Australia and what activity is
currently underway in the sector.
Sydney
Without a doubt, the historically low interest rates and
emergency stimulus packages employed throughout
2009 have cushioned the retail property sector, effectively
avoiding the worst effects of the economic downturn.
While some fears still remain in the market, a positive
outlook (especially for super-prime locations) saw the
retail property industry strengthen as investors snapped
up the limited prime-grade investment opportunities
available in the Sydney metropolitan market.
This commentary looks at prime retail strips and the
super prime retail precinct situated around Pitt Street in
the CBD.
COMMERCIAL
7
The super-prime/high-end retail strip property sector
is spread across an array of locations through Sydney.
Proximity to beaches, transport and high-end retail
outlets denote these areas, which are often located in
some of the most “walkable” suburbs in Australia. Prime
areas include the beachside locations of Campbell Pde
Bondi, The Corso at Manly on the Northern Beaches and
the vogue city fringe strips of Oxford St Paddington and
King St Newtown. Other super-prime retail strip zones
include Military Rd, Mosman, Darling St Balmain and the
Double Bay precinct.
Despite the pressures on retail trade over the past 18
months, premiums paid for super-prime space have
risen dramatically over the past nine months in the CBD,
primarily due to the ongoing revitalisation of Pitt St
Mall. Over this period super-prime rents having grown
by approximately 5.5% over the year to $7,560 per sqm.
Comparatively, net face rents in prime precincts fell by a
slight 0.9% over the year to $2,598 per sqm.
The progressive withdrawal of some 40,000sqm from
the Pitt Street Mall super-prime retail space over the past
18 months has resulted in a mass exodus of some 298
retailers from this precinct. This played a considerable
role in the tightening of vacancy, as retailers began
actively searching for alternate retail space. While the
super-prime sector currently has nil vacancy, the vacancy
within the Sydney CBD is anticipated to rise in late 2010
as the redevelopment of the Mid City Centre and stage
one of Westfield Sydney completes.
With zero vacancy across the super-prime retail division,
no significant sales have occurred due to property being
tightly held in order to take advantage of the Pitt St
redevelopment.
Prime retail strips comparatively have had a rough ride,
with gradually alleviated pressures thanks mainly to
government stimulus. Following the challenging retail
trade environment throughout 2008, opportunities in the
way of rental income growth have arisen after net face
rents along Sydney’s seven prime retail strips dipped by
an average of 6.7% to December 2009. However, over the
past 12 months HTW has seen rents in particular areas
reach unprecedented levels. These examples include
The month in review
3/732 Military Rd, Mosman, achieving $1,530 per sqm,
followed closely by 84-88 Campbell St, Bondi Beach, with
$1,375 per sqm, and finally 310 New South Head Road,
Double Bay, obtaining a $1,100 per sqm rental.
Private investors continue to form the dominant buyer
group throughout the Sydney retail property market. With
institutional investors preoccupied by capital raisings
and debt management, market activity from these major
players has been limited. Although more than half of all
retail transactions captured throughout 2009 were made
by private investors, 2010 should see institutional players
becoming more involved as both buyers and sellers.
Growth in retail expenditure is likely to be moderate
throughout 2010 as stimulus packages taper off and
interest rates rise. With the availability of debt funding
likely to remain a key issue in 2010, however yields are
expected to stabilise on the back of continued low supply
and stable demand, despite anticipated increases to the
official cash rate. The reinvigoration of Pitt St Mall will raise
the calibre of Sydney CBD super-prime retail, along with
the re-opening of the Mid City Centre and the first stage
of Westfield Sydney will see sales and leasing activity in
this precinct increase from present levels.
Canberra
The retail market is generally experiencing low levels of
tenancy turnover in the leasing market and low volume
of sales.
The Property Council of Australia has indicated that
Canberra currently has close to zero space in the pipeline
for construction of retail centres, which is not surprising
considering the amount of retail recently constructed.
The lack of retail construction in the pipeline for the ACT
means any vacancy increases will be most likely because
of negative absorption as tenant demand shrinks, and
not due to supply issues.
All asset classes have seen a softening of market yields, but
retail property with potential for increases in pedestrian
traffic and redevelopment/expansion potential should
command stronger yields.
Blue chip tenancy is still the key and good real estate will
do really well in a cycle like this that might be a bit testy
for the next few years.
The ACT retail market offers prospective purchasers better
opportunities in 2010 due to vendors now realising that
yields achieved in 2007 are no longer realistic.
This retail property at 122 Alinga Street, City, recently
sold.
With two storeys and basement, forming part of the
historical Sydney building in the heart of the Canberra
CBD, the building is currently tenanted by the Pancake
Parlour, Zambrero Mexican Grill, Tasuke Restaurant &
Crave Night Club. It was sold in January 2010 to a local
business identity for $3.1 million, reflecting an initial yield
of around 10% and a rate per sqm (GLA) of $2,611.
COMMERCIAL
Central, North & West NSW
The upper retail sector in most inland regional centres
is divided into two broad categories, being strip retail
located in the prime high pedestrian traffic flow areas
of the CBD and regional shopping centres, which can be
centrally located or can be destination centres. The high-
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end retail properties are anchored around the major
national department retailers. Rental rates on a rate per
sqm basis are higher in the shopping centres than in the
strip retail properties by approximately 20-30%.
This sector has been slightly unstable over the past
12 months, with vacancy levels rising and downward
pressure on rentals. Numerous reviews that have
occurred over the past year have resulted in rental levels
being maintained at previous levels with no increments.
In some cases rents have declined. There have been very
few new entrants into the market, and as such demand is
low, supply is more than adequate.
Yields for prime retail property have been under
downward pressure, however the lack of sales makes an
accurate determination difficult to assess; expectations
are that yields have softened by 0.5-1.0%.
Going forward, we would expect to see an increase in
sales in 2010 as seller’s expectations in relation to price
become more in line with what buyers are prepared
to pay.Additionally buyers are also being cautious in
relation to current rental levels, ensuring that they are at
market levels, and will not take a hit in relation to income
at market reviews.
...this sector has been slightly unstable over
the past 12 months...
Prime retail property was selling in the low 7.0% yield
range and lower in some cases prior to late 2009, however
sales would now be in the 8.0-9.0% range. We are aware
of a major retail property in Tamworth where a yield
above 9.0% for a $5 million plus retail property could be
achieved. This is a considerably higher yield than what
would have been achieved 18 months ago in the same
locality.
Prime retail space in Dubbo is concentrated in the
shopping centres, particularly the Orana Mall which is
located outside the CBD. The dominance of the shopping
centres in Dubbo has placed downward pressure on real
income growth for the previously high performing retail
premises in prime Macquarie Street locations.
Development of a new shopping centre in Bathurst,
which is close to fully let, has seen an increase in vacancies
amongst the traditional strip shopping areas, with rental
The month in review
levels stable to falling. A number of the tenants in the
new centre have struck significant incentives, although
at much higher face rents. The impact of the rental deals,
and whether the face rents are sustainable, remains to be
seen.
The Orange retail market remains strong with very few
vacancies. The Metro shopping centre has recently been
refurbished and is close to fully let, whilst the prime strip
retail area and Orange City Centre mall are fully let.
Southern NSW & Northern Vic
ALBURY
Within the Albury-Wodonga retail market high-end retail
would best describe the local shopping centres such as
Myer City Centre or one of the Centros such as Centro
Albury. The retail market is fairly tightly held, with no
recent sale to indicate any yield trend but the market is
expected to be steady with solid tenant profiles. The most
likely buyers would be either institutions or syndicates.
WAGGA
The retail market in Wagga Wagga has remained quiet
for a fairly long while now and there have been few sales
of retail properties, let alone high-end retail properties.
General retail properties range in value from around
$600,000 up to about $1 million with higher-end retail
selling for above $1 million up to over $2 million, though
few sales occur at this level. At present there are a number
of vacancies in the main retail area with vacant space
taking a little longer to lease than previously.
Melbourne
The retail market is heavily influenced by the tenant’s
ability to pay rent and the amount of disposable income
available to consumers. The GFC initially reduced
confidence in the general economy, reduced the public’s
willingness to take on new consumer debt and therefore
lowered retail spending. Retail turnover data between
November 2009 to December 2009 shows a decline,
perhaps reflecting decreasing disposable income due to
three consecutive cash rate rises by the Reserve Bank late
last year.
The high-end retail market ($3-5 million plus) appears
to have peaked in late 2007, with rentals over the last
two years softening as turnovers fell due to the slowing
economy. Yields for this high-end price bracket increased
mainly in response to a reduction in the availability of
bank finance, as banks limited their exposure to property
lending. Notably, yields for properties priced below $2
million were reasonably resilient.
Limited retail sales during 2009 are showing mixed
results, with prime retail property still achieving near
peak of market yields. A retail property at 508 Malvern
Road, Prahran, sold after auction in November 2009 for
$3.6 million, showing a yield of approximately 3.88% on
the passing rental of $139,700 net per annum. This rental
is considered to be at or about market levels, suggesting
a reinvigorated market supported by pent-up investor
demand. Further in December 2009, 209-213 Elizabeth
Street sold at auction for $7.01 million, reflecting a yield
of 3.35%.
COMMERCIAL
9
In recent times we have seen the re-emergence of retail
strips such as Centre Road, Bentleigh, Bay Street, Port
Melbourne and Brunswick Street, Fitzroy. These areas
have become more desirable to a number of national, as
well as local tenants, often being seen as more affordable
locations than many of the aforementioned prime retail
strips.
...the GFC initially reduced in the general
economy....
Prime retail rentals for a ground floor retail shop average
$4,000-6,000 per sqm for the Bourke Street Mall and
$2,500-4,000 per sqm for Collins Street. Substantial
growth in rents occurred during the 2007 financial year.
However, a change in consumer sentiment and a slow
down in retail spending growth will probably subdue
rental growth over the short to medium term, even with
relatively low vacancies.
Typical buyers for prime retail shops are cashed-up
wealthy private investors with limited need for bank
finance. High-end retail values are likely to be steady
over 2010 as investors and retailers monitor the slowly
improving economic outlook and sentiment and await
increased consumer spending. Nevertheless, with the
threat of further declines in consumer spending given
further likely rate rises, there is clearly a risk that tenancy
demand may drop and yields soften, with a resultant
diminution of capital values.
Regional Vic
ECHUCA
There have been three retail sales in recent times in
the prime shopping strip of Hare Street Echuca. One
shop, occupied by Gazman on a five-year lease, sold for
$750,000 at 4% yield, while R & J Music on the corner of
Hare and Pakenham Streets is also believed to have been
sold at a sub 5% yield (price undisclosed). A retail shop
on the corner of Nish and Pakenham Streets, occupied by
Leading Edge Computers, was recently sold for $520,000
The month in review
at an indicative yield of just over 5%. Meanwhile, the
new Aldi store in Anstruther Street is expected to be
completed by mid year and Bunnings has commenced
construction at the old saleyards site on Ogilivie Avenue.
There is further speculation that Harvey Norman is close
to securing a site to commence operations locally.
MILDURA
Despite all the concerns about the economy, the fast food
industry seems to always prosper. A third McDonald’s
restaurant has recently opened in Mildura, a new KFC
restaurant is under construction, and there is talk of
another major food franchise looking at a prime site. All
three sites have one thing in common - frontage to one
or more busy arterial roads. The land purchases for the
first two sites resulted in significant premiums being paid,
compared to recent sales evidence.
There are negotiations for a prime vacant site in Deakin
Avenue at over $1,000 per sqm underway, with the
purchaser intending to construct a service station.
Recent sales of prime inner city retail and office premises
have shown gross yields as low as 5.4% for a two-storey
building, with a secure lease to ANZ bank and frontage to
Mildura’s busiest intersection. However the majority of
sales of good standard retail property have shown gross
yields of between 7.0-8.25%.
A modern office building, subject to a potentially long-
term lease to Centrelink at a current rental of $243,776
per annum plus GST and usual outgoings, is currently
being marketed and will be a good test of values at the
higher end of the Mildura market.
Adelaide
The retail market is in a state of uncertainty, with recent
trading figures appearing to be relatively poor across
the board and, therefore, retailers will be concentrating
heavily on fixed costs, including rentals, as a means of
minimising overheads. This process takes some time to
come into effect, although vacant retail space may well
experience difficultly in letting at rental rates similar to
that achieved during 2008 and 2009. In short, the balance
is tipping towards the tenant that is ready and willing to
lease premises as there will be increased opportunities
and a broader choice in the coming 12 months.
The investment market for blue chip retail has remained
strong with evidence of high quality tenancies on long
term leases selling at yields ranging from 6-7.5%.
These prices have been in the up to $3.5 million bracket,
but beyond that the market is relatively slow.
Brisbane
The Brisbane CBD comprises approximately 175,000sqm
of retail space within enclosed shopping centres and
137,500sqm of freestanding retail buildings and strata
COMMERCIAL
titled retail outlets. The heart of retailing in the CBD is
the Queen Street Mall, which is a 500m pedestrian mall
providing a concentrated span of street-front shops, and
further incorporates five prime shopping centres and four
arcades. This prime retail area is the most highly sought
after retail destination in the Brisbane CBD and is the
largest shopping precinct in Brisbane. As such, the Queen
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Street Mall precinct, which also includes the surrounding
streets, attracts the highest rental rates for retail space
compared to any other location within Brisbane. The net
rental rates in this prime retail location currently vary
between approximately $2,500 and $6,750 per sqm per
annum depending on the size of the tenancy and its
particular location within the Queen Street Mall.
The properties in this precinct are extremely tightly held
and are still transacting for a premium in the face of the
broader property market which has experienced a general
softening of capital values and yields. The Brisbane CBD
prime retail sub-market is seeing very keen yields of
5.50-7.50% and realising high capital values in the order
of $50,000-80,000 per sqm for smaller shops fronting
the Queen Street Mall and $10,000-$25,000 per sqm for
larger, mixed-use buildings in the precinct. This is a result
of investors’ demand for property investments that are
considered to be low risk and have a secure tenant base.
This is evidenced by the 4.5% vacancy rate for street-front
retail tenancies within the Queen Street Mall precinct.
This vacancy rate is expected to remain relatively stable.
...the heart of retailing in the CBD is the
Queen Street Mall....
There have been several notable transactions in the
Queen Street Mall over the past 12 months which
demonstrate these keen yields. 114 Queen Street sold
in May 2009 for $11 million, or $19,504 per sqm, and an
initial yield of 6.75%. 120 Queen Street was purchased
in December 2009 for $26 million, or $11,144 per sqm,
and an initial yield of 7.10%. However, another sale was
recorded that tells a different storey. 180 Queen Street
was snapped up in August 2009 for $22 million, or $5,999
per sqm, and an initial yield of 8.01%, showing that
there is still opportunity, albeit limited, in this market
for investors with the appropriate funds to secure prime
retail assets below normal market parameters. It must be
noted however that this property includes multiple levels
of office accommodation above the retail space and the
yield is reflective of the risk associated with the poor state
of the commercial office market. In the present economic
climate, the most common purchasers of prime Brisbane
CBD retail properties such as these are high net-worth
individuals. The listed property trusts which were so
active prior to the GFC and exited the market en masse
12-24 months ago are only just now starting to re-enter
the market as confidence in the economy grows.
The month in review
The Queen Street Mall includes a number of enclosed,
multi-level shopping centres, however, there are two
which stand out from the pack. These benchmark
properties include the Myer Centre and Queens Plaza. The
Myer Centre is the largest shopping centre in the Brisbane
CBD, with a gross lettable area of 63,822sqm over six
levels. It is anchored by a Myer department store which
leases 31,000sqm of space and has basement parking for
1,450 vehicles. The second largest is Queens Plaza with
a gross floor area of 35,948sqm over three levels. This
centre focuses on high-end retail and is anchored by
David Jones, which leases 26,651sqm of space. There is
basement parking for 595 vehicles.
There are currently a number of significant retail additions
and refurbishments underway in the Brisbane CBD,
including the completion of the Q&A Centre last year;
the expansion of Woolworths’ current premises within
the MacArthur Central shopping centre, occupying space
formerly occupied by Crazy Clarks and Millers; and work
has also commenced on a $100 million refurbishment of
the Wintergarden shopping centre.
The general outlook for the Brisbane CBD prime retail
property market is positive. The anticipated solid growth
in retail turnover for 2010, coupled with an increase
in effective rents (initially in form of a reduction in
incentives), should see values in this sub-market increase.
It should be noted that the growth in retail turnover will
most likely be lower than that realised in 2009 as a result
of the Government retracting its monetary stimulus
into the population and the Reserve Bank of Australia
increasing interest rates. Nonetheless, the Queen Street
Mall is considered to be the most successful mall in
Australia and will continue to record strong turnover
growth, somewhat at the expense of secondary retail
assets which are likely to continue to under perform.
Gold Coast & Tweed Coast
GOLD COAST
When people think of blue ribbon retail on the Gold
Coast, the first thing that probably comes to mind is the
Surfers Paradise glitter strip, or the ultra-trendy Tedder
Avenue at Main Beach.
Central Surfers Paradise is typically stereotyped as
being littered with souvenir and T-shirt shops. However,
unprecedented development over the past 10 years has
elevated its status to a legitimate retail destination that
achieves some of the highest rental rates in Australia.
The regentrification of this area began with the
construction of Chevron Renaissance and refurbishment
of the Paradise Centre. The upgrading of the Surfers
Paradise Boulevard streetscape also acted as a catalyst,
improving the links between the already established
retail strips along Cavill Avenue and Elkhorn Avenue.
Soon to be completed developments, such as Soul and
Hilton, will help cement Surfers Paradise’s reputation as a
boutique retail destination.
Retail properties within Surfers Paradise are typically
tightly held and achieve yield levels that are noticeably
firmer in comparison to typical commercial property
throughout the Gold Coast.
However, this area is not, by any means, immune to
market downturns. Recent sales of properties such as
the McDonald’s building at 1 Cavill Avenue, the Priceline
building at 3200 Surfers Paradise Boulevard and Louis
Vuitton in Elkhorn Avenue, have reflected yield levels
ranging from 6.5-7.5%. In the peak of the market, it was
not unusual for properties to be transacted at levels sub
COMMERCIAL
6.5% or even down to 5.39%, as was the case with 1 Cavill
Avenue in 2003.
For a long time, Tedder Avenue has been viewed as the
Gold Coast’s premier destination for boutique retail, cafes
and restaurants. Historically, businesses have thrived
11
on the affluent population surrounding Main Beach.
Consequently, vacancy rates have been maintained at a
comparatively low level due to the limited supply of retail
opportunities within this strip. There have been reports,
however, that retailers have been badly affected by the
recent downturn in the economy and are crying out that
rents have become unaffordable. Nevertheless though,
we are yet to see any evidence which indicates the rental
market in this area is falling.
...in the peak of the market, it was not
unusual for properties to be transacted at
levels sub 6.5%....
On the other hand, property values do appear to have
taken a few hits.
In recent years, buyers were bidding aggressively to
secure real estate within this tightly held precinct. This
market was somewhat devoid of evidence for many years,
however, we are aware of one buyer that accepted yield
levels below 4.0% in order to secure a majority holding in
a strata complex.
How times have changed!
Buyers now appear to be much more cautious in their
purchase decisions, and are very critical of properties that
have a new tenant who have not yet “proven themselves”.
Such a case was evident at a recent Ray White auction, in
which a strata titled unit on Tedder Avenue was offered
for sale and did not attract a single bid.
It is not all bad news though. The property next door at 27
Tedder Avenue was also taken to auction on the same day
and drew a degree of buyer interest. It did not sell under
the hammer, however went into further negotiations at
The month in review
an initial yield of around 5.5%, indicating that investors
are still willing to accept notably firmer yield levels for this
prime retail location. Interestingly, and not surprisingly,
we have heard on the grapevine that this property was
under contract for a substantially higher figure some two
years ago.
Whilst not yet in the same league as Tedder Avenue,
Surf Parade at Broadbeach is a bustling destination for
cafes, restaurants and retailers alike. This area has gone
from strength to strength over the past five years, which
is particularly evident on any given Friday or Saturday
night. Rental rates in this area are somewhat akin to
Tedder Avenue, however, the precinct still suffers from a
degree of tenant turnover and sporadic vacancies, which
is recognised by the market through softer yield and
value levels.
Other strong retail areas are the beachside commercial
nodes at James Street, Burleigh Heads, and Griffith Street,
Coolangatta. Burleigh Heads, in particular, is a tightly-
held pocket of strip retail development that typically
comprises older style, one- or two-level buildings, on a
405sqm parcel of land.
Back in 2000–2002, these properties typically sold for
$750,000-$1 million each. By 2004, they had crept up to
around $1.5-2 million, and in 2006 a few sales cracked the
$3 million mark.
Rental rates within James Street have continued to rise
steadily, and now typically fall within the range of $600-
800 per sqm. The most recent sales occurred in 2008 at
investment yields within the range of 5.0-5.5% and value
levels of $2.5-3 million, which indicates that value levels
in this area have been more or less maintained.
Going forward, the Gold Coast’s blue ribbon retail
precincts will always be underpinned by strong land
values due to their proximity to the beach. Areas such as
Tedder Avenue and Burleigh Heads have limited threat of
additional supply coming online, adding to the security
of these investments in the longer term.
Conversely, supply additions are considered to be the
main threat for retail holdings within Surfers Paradise and
Broadbeach, with fluctuations in the international and
domestic tourism markets always present. Nevertheless,
it is expected that all of these precincts will consistently
outperform the remainder of the Gold Coast commercial
market, due to the simple fact that beachfront retail
holdings are a trophy for any investor.
TWEED HEADS
Lismore retail market appears to have experienced a
reasonably significant drop in retail rents over the past
12 months. As an example, the old Rockmans shop in a
prime Main Street position was leased for $92,000pa, but
is now vacant and listed with local agent for $60,000pa
with limited interest. This scenario of decreasing rents has
been repeated in some market review lease negotiations
between landlord and tenant. .
...traditionally the Byron retail market
survives on the peak tourist season...
Ballina retail market has been traditionally well held.
While there has been some evidence of increased vacant
space, landlords have still been able to achieve steady to
slightly stronger rents.
Byron Bay retail market continues to experience steady
demand. Retail spaces in prime locations have seen
increases in rents. Secondary locations are seeing some
vacancies and some downward pressure on rents. Local
retailers are reporting a fall in turnover, as there are a
number of national brand outlets increasing competition
and forcing down prices traditionally achieved by the
COMMERCIAL
Byron Bay retailers.
Traditionally Byron retail market survives on the peak
tourist season. The reported fall in turnover may see
further vacancies over winter. However, Byron Bay has a
continual inflow of would-be retailers who take up vacant
12
space and buy existing businesses to “buy a job”. This has
generally seen rents hold or increase, even in poorer
economic times and secondary locations.
Traditional investment yields have generally increased by
1.0-2.0% over the past two years.
Lismore now closer to 9.0%, while Byron Bay which
previously showed yields at or below 5.0% now 6.0-7.0%,
and Ballina is 7.0-8.0%
Sunshine Coast
Blue ribbon retail property on the Sunshine Coast is
probably less about a price point and more about the old
real estate adage, “location, location, location”.
The two areas that dominate retail discussion on the
Sunshine Coast are Hastings Street, Noosa Heads, and
the Esplanade, Mooloolaba. Both of these strips are
dominated by strata titled properties that range in value
from lows of $300,000 for arcade-style stratas, up to more
than $3 million for larger streetfront stratas.
There have been few sales over the past 12 months in
the Hastings Street precinct, however sales that have
occurred generally indicate that yield levels have softened
slightly and are now in a range from about 6.0% for prime
space, up to 8.0% for secondary areas. This is a softening
of approximately 100-150 basis points from the market
peak.
The month in review
We have noted an increase in the level of supply on
the market, with a mixture of well located and arcade-
style stratas available. We have also noted a number of
properties available to lease, however actual vacancies
are yet to occur. Basically, a number of tenants have
indicated that they will not be taking up options in the
next 12 months and the agents are advertising these
properties well in advance. This location may note
an increase in vacancy as tenants struggle with the
traditionally expensive space.
The Mooloolaba Esplanade market has also noted an
increasing level of sales after a developer offering a
number of stratas to the market during 2009. Two stratas
have settled around the $1.8 million mark, with yields
being around the 6.5-7.0% mark with long-term leases
in place. More sales are imminent with discussions
underway with purchasers.
Vacancy rates have also increased in this area, however
there have been recent lettings to a number of vacant
areas. There is a significant reluctance by tenants to take
up options at rentals above previous levels due to a
slowing in general trade.
As it happens, Council has recently completed footpath
upgrades to both locations, with new landscaping
and outdoor public dining facilities available. This has
improved pedestrian flow, however tenant’s trade
suffered during this period.
Looking forward, it is likely that rental levels will stabilise,
and in some cases drop away, if vacancy levels increase.
Some local tenants may also be drawn from these
locations to emerging retail precincts, such as Coolum
Beach, with lower rental levels in comparison.
Southern Queensland
TOOWOOMBA
Prime retail tenancies in Toowoomba have historically
been located within the CBD strip of Ruthven and
Margaret Streets. This was the preferred location of most
of the national retail chains and tenure was tightly held
with very few vacancies.
This changed with the construction of modern shopping
centres within the CBD, first with Village Fair in 1989 and
then with Grand Central in 1996. Grand Central is a major
regional shopping centre anchored by Myers, Coles and
Target and has 145 specialty stores, a food court and
cinemas. Upon the construction of the new centres, the
big national retailers relocated out of the older CBD strip
to the newer facilities. Grand Central is now considered
the top retail location in the city and, consequently,
achieves premium rental rates.
The older retail strip in Margaret and Ruthven Streets
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has become a secondary retail location, with a reduction
in rental levels and quality of tenants. The secondary
retail nature of the CBD strip is exasperated by the older
nature of the buildings, which in most cases are difficult
to upgrade due to the limits in achievable rental in the
location.
13
In times of economic downturn the traditional
convenience retailers are often not significantly impacted.
The retailers most impacted when discretionary income
is reduced are the high-end specialties. The exposure by
smaller investors to this type of tenant is now reduced
due to the movement of tenants to Grand Central.
In general, the Toowoomba economy appears to have
weathered the GFC without significant impact. Local
specialty retailers did reportedly suffer a decline in
turnover initially, but the long-term impact appears to
have been minimal.
Central Queensland
ROCKHAMPTON
The retail market in Rockhampton is traditionally tightly
held and there have been very few sales within the retail
sector to enable us to properly gauge market sentiment.
The most recent sale is a strip retail complex on Musgrave
Street anchored by national food franchises and a couple
of local tenants. The sale shows an analysed yield of
approximately 9.3%.
There have also been sales of aged buildings within this
precinct, and throughout different areas of Rockhampton,
purchased for eventual refurbishment/redevelopment.
Accordingly, these sales show varying returns depending
on quality and vacancy levels. An example is a sale in
Allenstown of an aged, multi-tenanted building. The
property was sold by an owner occupier who occupied
60% of the building which was vacant at the time of sale.
The sale reflects an overall yield of approximately 8.9%
and achieved rents of approximately $150 per sqm.
...the Musgrave Street commercial precinct
is also at similar rental levels...
Retail vacancies throughout the city are still relatively
low and a few new leases have been entered into in the
East Street Mall Precinct at gross rates of approximately
The month in review
$200–250 per annum. The Musgrave Street commercial
precinct is also at similar rental levels. Local agents
report that they are still receiving good buyer and tenant
enquiries across all commercial sectors. They report that
some incentives have been necessary in the retail market.
However, incentives across the board are still minimal.
BUNDABERG
The main retail action in Bundaberg has been the
marketing and sale of the Ryan Group Assets by Receivers
and Managers.
Two properties have sold in the $3.4-4.3 million range.
These have indicated yields well above traditional figures
in the 9.75-10.25% range. These are well located and
good quality assets. One of the main factors behind the
higher yield rates are considered to be the price range.
There is a limited volume of purchasers who can meet
the lending criteria in this price range. The perceived
strength of the tenants and remaining lease terms were
also considerations. Both sold in the order of $1,000 per
sqm of lettable area, and one of the properties included
a substantial area of spare land. The sale price indicates a
significant discount on the added value of the spare land
as part of an investment property, when compared to
commercial site sales.
Against these two sales was the purchase by Bunnings
as the lessee of the Bunnings Retail Warehouse at $9.5
million, reflecting a yield rate in the order of 8.25% and
$1,398 per sqm of lettable area.
A group of retail shops/furniture warehouse was under
contract in late 2009 at approximately $3 million,
reflecting a yield of 8.4% and $2,168 per sqm of lettable
area, however the sale did not proceed.
...these are well located and good quality
assets...
The last prior sale of a high-end retail property in
Bundaberg was in October 2008 at $2.75 million. It was
a four-tenant property built in the early 1990s. It sold at a
yield rate of 8.5% and $3,362 per sqm of lettable area.
HERVEY BAY
The high-end retail market in Hervey Bay is still growing.
This style of property is relatively tightly held and receives
good interest once listed.
The proposed retail/commercial components of proposed
buildings along the Esplanade will be predominantly
targeted at the tourist market. A majority of the
existing buildings are dated and generally identified
as redevelopment sites. The continuation of the slow
residential unit market is, however, holding back any
construction along this area.
Prime retail is predominantly focused around the CBD,
Boat Harbour Drive, Pialba Place and Centro Shopping
Centres. The recent announcement of the expansion to
Centro may increase letting pressure as landlords attempt
to stop tenants relocating and incentives may become
more prevalent over the next two years.
Premises with nationally branded tenants generally
attract up to a 0.75% yield premium, compared to other
investment property. The most recent sale was a stand
alone Officeworks building in 2009 for $6.7 million or
7.4% net return, and another is currently listed for sale at
a reported 7.5% return receiving good interest.
MACKAY
The Mackay CBD and frame provides the largest
aggregation of retail and commercial facilities in
COMMERCIAL
Mackay, at around 110,000sqm of space. The two main
shopping centres - Canelands and Mount Pleasant -
together provide an additional 60,500sqm and suburban
shopping/convenience centres provide approximately
18,920sqm.
Retail space has been fairly consistent at these levels over
14
the past decade, but the proposed $210 million expansion
of Canelands, to commence in April 2010 to incorporate
an additional 25,000sqm of space including a Myer
department store, and three new suburban convenience
centres planned for construction over the next year will
expand retail space, and increase letting pressure.
Retail property is tightly held, with no reported sales
over the past quarter. Investors are interested in CBD
opportunities but, at present, there are no notable listings
of retail properties. Generally, the Mackay retail sector has
come through the GFC with few battle scars.
Further regional expansion of the resources industry
and a return to profit for the sugar industry augers well
for retailers over the coming year, but the opening up of
further space from 2010 could result in a different story.
GLADSTONE
High-end retail in the Gladstone market mainly consists
of retail properties located within the Gladstone CBD
ranging between $275-350 per sqm. Other high-end
retail properties can be found in areas outside the CBD in
new suburban strip retail centres and larger bulky good
centres, starting at approx $300 per sqm. The sales market
for retail in Gladstone has been quiet over the previous
12 months, with agents reporting an increase in enquiry
and a steady level of new lease negotiations. Prospective
tenants and purchasers are displaying a cautious approach
to the retail market; this can be attributed to the global
economic recovery and uncertainty in quantum of the
proposed industrial expansion touted for Gladstone.
The month in review
Cairns
The Cairns retail market had been strengthening slowly,
but steadily for a number of years. However, while this
trend started fading out at the start of 2008 and continued
to fade during 2009, we now perceive the Cairns retail
market to be at or near the bottom of the cycle. It must be
also said that retail property sales in Cairns are extremely
sporadic, and there have been no retail properties of
significance changing hands for some time. Most sales
involving retail property have been of mixed use retail/
office buildings or tenant buyouts of single premises.
Despite the economic downturn presumably leading to
a reduction in consumer and tourism spending, vacancy
levels in the prime retail sector have remained stable, with
high exposure CBD space near fully occupied. However
some increase in vacancies in lesser exposure locations
and/or on the CBD fringe has been noticed. Rents as a
general rule have been static, showing ranges of $600-
1,500 per sqm per annum for prime CBD space, and
$1,000-2,500 per sqm per annum in key tourist precincts
such as the Cairns Esplanade.
Yields for commercial properties in general in Cairns
have eased back by about 10% from the record low
levels observed at the start of 2008. Though true retail
sales are rare in the Cairns market, we believe yields for
retail premises have been steady in the 7.5-8.5% range,
compared to the 6.75-7.25% range that prevailed at the
start of 2008.
Townsville
With the current commercial market in Townsville best
described as volatile, the retail sector continues to forge
ahead with new developments.
Townsville City has been projected by PIFU to have the
largest growth outside of south-east Queensland in the
25 years to 2031, increasing its population by 105,000.
With this growth forecast, together with Townsville’s
broad based economy weathering the GFC relatively
well, 2010 is shaping to be an exciting year in the retail
market.
Townsville’s three major shopping centres have, or will
this year, undergone major expansions, with Willows
Shoppingtown completing its 13,000sqm expansion in
October last year and Castletown currently undertaking
its 11,000sqm expansion.
By far the biggest retail coup however, was the
announcement that Stockland would undertake its $180
million expansion this year to incorporate a 12,000sqm
Myer store over two levels. Myer has been committed
to Townsville for a number of years, however with the
impact of the GFC Stockland put its 2008 expansion plans
COMMERCIAL
on hold.
Throughout 2009 suburban retail shopping complexes
continued to be constructed. These complexes offer
quality tenancy mixes, with a number of currently on the
market providing good income streams and opportunities
15
for investors, especially with interest rates remaining low.
This trend in suburban construction is likely to continue
into 2010 with two new IGA Supermarkets and associated
retail neighbourhood centres to be built.
Another sign of the increasing confidence within the
region is the announcement of a new 13,000sqm bulky
retail outlet to be constructed at Fairfield Waters to
accommodate a new Bunnings hardware store.
...these complexes offer quality tenancy
mixes....
Over the past 15-20 years Townsville prime retail space
has been located within the three major shopping
centres. 2010 however, will provide a new facelift for
the city heart with the current pedestrian mall being
opened up to traffic. A new $200 million six -level retail
complex has also been earmarked for the CBD, however
a commencement date has not yet been set. This retail
centre will provide another dimension to the Townsville
retail market.
This strong level of new development in the retail market
of Townsville also signals confidence of tenants, with pre-
commitments on a number of these new developments
required before they will commence.
Increasing business confidence, coupled with the
stability of the local economy, has ensured that new
retail development for 2010 will continue to expand. New
fashion outlets will open in Townsville as the population
grows and consumer expectations for retail in our regional
centres also grows.
Darwin
Darwin has one retail property that is a benchmark not
only at the local scale, but nationwide. That property,
visited by more than twice the population of Darwin
every week , with over 50,000sqm of retailing space,
1,700sqm of offices and 2,400 car parking spaces, is
Casuarina Square. It is owned by GPT. Most of GPT’s
The month in review

property portfolio of more than 60 properties has been

valued over the last two years, and of those, only five
other properties nationwide enjoy yields equal to or
firmer than Casuarina Square. Those with softer yields
include several of Australia’s best known properties. This
centre has been a great performer for decades.

Potential rival retail developers in Darwin would, Perth

therefore, be well advised to regard it as a Transylvanian
Count wearing a black high-collared cape and sporting Prime retail property exists across all categories of retail
protruding canine teeth, vacuuming up retail demand properties, which include CBD, regional, sub-regional,
for miles around, and even sucking the lifeblood from neighbourhood and bulky goods. There is no hard and

Darwin’s CBD retail, over 13km away. That is, despite the
Territory’s statistics being the best of any in retail trade
and low unemployment, when putting their necks on the
line with Darwin retail development, they should be very,
very careful.
COMMERCIAL
fast definition of what constitutes a prime retail property,
although generally they can be segregated from non-
prime retail by attributes such as price, location, quality of
tenancies, WALE, size of catchment, and various physical
attributes, such as modernity, tenancy mix, level of
amenity and ease of access, to name a few.

16
Over the years, other Darwin retailers have rebelled against
this destiny as the undead, and some even succeeded, for The highest priced retail transaction in the Perth CBD for
a while. Only a select few have indeed found sustainable 2009 is sale of the David Jones department store, which is
market niches, thanks to getting everything right, located at 622 Hay Street, Perth. It sold for $114.5 million
especially by finding major anchor tenants. But high-end and settled in November 2009 at a passing yield of 7.75%,
retailers have had to look at Casuarina Square first, and to the Singapore listed Starhill Global REIT. The property
– apart from the Smith Street mall for the more tourist- was sold by Centro Property Group, which has been under
related retailers – see other areas as being somehow significant pressure in the wake of the GFC.
lesser for their purposes.
The most recent sale of a prime regional shopping centre
...those with softer yields include several of is the $256.5 million sale of a 50% stake in the Westfield
Whitford Shopping Centre by Dexus Property Group to its
Australia’s best know properties... affiliate, Singapore’s Government Investment Corporation,
at a claimed passing yield of 6.95%. However, the sale is
While Casuarina Square dominates the northern suburbs,
subject to approval by the Foreign Investments Review
apartment construction dominates the CBD, and
Board and if allowed, settlement is due at the end of
expansion to the south dominates the suburban sprawl.
March. This sale represents the first regional shopping
So there are pushes emerging against the pull, and a
centre sale since the 25% stake in Karrinyup Shopping
major part of Darwin’s retailing future could be in the
Centre sold and finalised in January 2008.
hands of yet-to-be developed centres.
A recent sub-regional shopping centre sale occurred in
There are plans for many such afoot, from several at the
September 2009, with expected settlement due March
CBD and nearby to serve the new apartment dwellers,
2010. The Kwinana Hub Shopping Centre had a sale price
to a major proposal at Coolalinga to serve the newly-
of $25 million at a passing yield of 10.26%. The shopping
developing suburbs south of Palmerston, and even the
centre has reasonable average rental growth built into
proposed new city at Weddell. But when it comes to high-
its leases and the sale includes 7,000sqm of surplus land
end retail, look to putting them near the high-end incomes
offering further development potential.
and the high property values. As such, the CBD has more
and more going for it. Darwin CBD’s $7 million MY008
Lifestyle Ocean Keys represents a 2007 built (GLA
revitalisation project is under way, and in February the
approximately 14,000sqm) fully leased bulky goods
media referred to both a major development possibility
centre, comprising 19 tenancies, including Good Guys,
on a large open car park site there, and the possibility of
Super Cheap Auto, Bedshed and Beacon Lighting, sold
Myer coming to Darwin. Its editorial called the Myer news
in September 2009 for $27.5 million at a passing yield of
“bittersweet”, insofar as it was great if Myer would come
9.68%, with a WALE of marginally under 5.5 years.
to Darwin, but better still if it came to the CBD and not, as
is rumoured, Casuarina Square.

Wait for the fat lady. There is good reason to believe that
the Myer people who decide such things would be of a
similar high calibre to those who chose the Casuarina
Square site so long ago. As such, and with the above-
mentioned new demographic realities, that does not
necessarily imply that they would make the same decision
now as was made back then. While the CBD may be down
for the count, it may not yet be out.
The month in review

There have also been a few other sales ranging in price

from $1.7-11.6 million, with passing yields ranging from
6.9-10%. In 2009 there were 36 retail property sales in
the state, totalling approximately $310 million. Overall
sales in the upper end of the retail market have had little
trouble achieving sales and turnovers are only really being
restricted by supply. Generally properties in this section
of the market are tightly held, with good national tenants South Western WA
on long-term leases incorporating reviews allowing for
good growth to ensure maintenance of capital values. The The Woolworths site in central Busselton recently sold for
buyers have been predominantly private syndicates and $1.61 million. The site included a 2,833sqm supermarket
occupied by Woolworths until 2027. There is a total

overseas institutional buyers who are generally cashed
up. Generally the sales do not represent distressed sales,
however, with debt markets being so constrained, some
owners are looking to reduce their debt balances.
The main constraint in this sector is Perth’s restrictive
trading hour policy, which is an issue that frequently
COMMERCIAL
of 4,137sqm of net lettable area on the site including
café and Woolworths Liquor store. The site has three
street frontages and adequate parking. The sale was in
conjunction with the adjoining service station site, which
is also occupied by Woolworths.
This sale follows on from a previous shopping centre sale

appears in our local media. Although, sales turnover
figures for the state remain buoyant so consumers
appear to be not really affected. The threat to this
sector is that the tight lending conditions are affecting
the smaller tenancies who find it difficult to obtain
borrowing for establishment and/or expansion. Recently,
Stockland’s Matthew Quinn explained the company’s
new role as financier for its tenants and for new tenants
in an interview. Even though the amounts have not been
great, the company recognises the importance of this
contribution in terms of maintaining quality and range
within its shopping centres.
17
in Busselton for $14.1 million in August 2008 which had
Coles as its major tenant.
On a smaller scale, a retail shop in the main street of
Margaret River sold for $1.375 million. This is a retail shop
with a net lettable area of approximately 214sqm and has
a current rent of $73,000 showing a yield of 5.3%.
Demand in the commercial market in the region can
be summarised as steady with the number of enquiries
increasing, however only a few are leading to finished
transactions.

...generally properties in this section of the

market are tightly held...
As indicated in previous issues over recent years, the
state’s economy has experienced unprecedented growth
due to the expansion of mining activities, which were only
briefly challenged following the onset of the GFC. The WA
economy continues to show good fundamentals, on the
back of China’s high growth and demand for the state’s
resources. Through the worst of the crisis unemployment
in the state remained relatively low and owners of prime
retail property had sufficient reserves, or at least were
able to secure alternative forms of funding to see them
through. Certainly retail property values did decline
overall as yields improved, and this phase appears to
have stabilised. The state’s optimistic short- to medium-
term economic capital growths are tipped to remain flat
as uncertainties in the financial sector remain high, bank
lending will most likely remain constrained and rising
interest rates will continue to dampen business and
consumer outlook. Rising interest rates may also impact
on sentiment, as increasing costs may curb consumer’s
spending appetite, especially given the relatively high
gearing of most residential mortgages.
The month in review
Residential Overview
The high end residential market has historically proved
a litmus test for overall confidence. Whilst the sector is
made up of many people, there are plenty at these heady
heights operating beyond the effects of minor interest
rate rises. These fortunate souls are able to afford pretty
much whatever they like for their dream property. As
such, the sector can often take a sit and wait mentality or
a bullish run at opportunities without having to beg the
financier for every last dollar.
This month, the HTW offices have provided some
engaging information on where the prestige market is
heading in their patch. Some are seeing a real resurgence
in this sector which bodes well for the overall confidence
of all real estate operators and the economy.
For a bit of water cooler discussion, a few of the
contributors have also taken time to describe some of
the extraordinary property our valuers get to see on an
almost daily basis around the nation – a little insight for
many on what it means when money is no object.
Sydney
The Sydney prestige market, although weakened
throughout the duration of the GFC, saw only limited
forced selling occurring, which was well below anticipated
market expectations, though the market has seen many
“silent listings” not advertised to the greater market.
The prestige market, though dynamic in geographic
location, usually sees the $3 million mark as a minimum
entry point, with higher-end prestige properties over the
$10 million price level. The then “super prestige market”
sees properties well in excess of $20 million.
Demand in all sectors of the prestige market remained
weak throughout the past two years, though there were
some cashed-up purchasers who made well-played/
RESIDENTIAL
18
speculative purchases in the $3-$10million price range
with the super top-end of the market held stable due to a
genuine lack of supply.
All sectors of the prestige market are currently showing
positive signs of resurgence and increased stability/
demand. Scores of media commentary regarding the
pick up in the financial services sector has seen an array
of bankers, investment advisors and traders lead the way
in top-end purchases, as these sectors kick on post GFC
and executive bonuses are again paid.
There still remains very limited activity at the super
premium end of the market, with the most recent
sale being that of Le Manoir in Bellevue Hill to Lachlan
Murdoch for $23 million.
When analysing the prestige, market Herron Todd White
research has seen remarkable figures with regards to
capital depreciation and demand in certain high-end
suburbs. In the eastern suburbs, Vaucluse took quite a
considerable hit over the course of the GFC, along with
Mosman in the lower north shore and Palm Beach on
the northern beaches. As markets appear to re-equalise
again, there seems to be increased activity with some
good gains yet to be made.
...all sectors of the prestige market are
showing positive signs of resurgence....
Whilst some opportune speculative purchases were
made at the lowest point over the GFC, it is generally
considered the bottom of the market has now passed as
prices pull back from their spiraling trend. Herron Todd
White research indicates that while prices have bounced
back, they are still generally considered below or at 2007
prices in most areas.
With prices rebounding amidst stronger prospects of
economic growth, the cream of the crop across the north
shore will see both Palm Beach and Mosman strengthen,
after seeing the market significantly weaken throughout
the course of the GFC. At one stage throughout the crisis,
up to three times the number of properties were offered
for sale with eventual selling prices up to 20-30% below
previous levels and expectations.
The month in review
Within the Eastern Suburbs, many affluent suburbs
including Point Piper and Darling Point have seen a price
stabilisation due to a genuine lack of stock, while beach
suburbs such as Taramara and Bronte have comparatively
showed some weakening. Demand-driven purchases are
now beginning to rebound due to incremental growth in
demand and, again, a lack of stock.
Based on these assumptions we can see that from late
2008 to mid 2009 there were definite indications that
the market was weakening. While many buyers did try
to make speculative purchases to take advantage of
those forced to sell, this did not occur in many areas, with
vendors holding stock tightly, awaiting signs of growing
confidence and stabilisation.
We can comfortably state the bottom of the market
has well and truly passed, with steady increases in the
number of prestige listings and a general feel that market
levels are still below their previous peaks, with plenty of
steam remaining in the buyer’s market.
With those forced to sell during the height of the GFC,
price levels continued to plummet, none more notable
than the Mosman property once owned by the head
of Lehman Brothers Australia. The elevated 1456sqm
property boasted extensive harbour views to the heads,
five bedrooms, nine bathrooms and a four-car garage.
With a reported value of $18 million mid 2008, the
property was liquidated in June 2009 at $10.2 million, a
remarkable 43% nominal drop.
With all the doom and gloom once associated with the
prestige market there still remains standout opportunities,
particularly in the prestige unit sector. With many high-
end vendors unable to sell their properties in order to
trade down to prestige top-end apartments, a large
weakening in the market occurred as demand dried up
and supply increased. Purchasers in the high-end unit
market will need to search for stable price points in order
to ensure they snap up a well-priced bargain.
Finally, on a lighter note, while overall building costs
are high throughout this sector, most construction is
reasonably pragmatic with a view to quality rather than
personalised over-capitalised opulence. Perhaps a six-
car garage turntable for a three-level apartment with its
own Roman bath and imported French Oak floors would
prove a nice purchase in the current market! Or perhaps
imported stone paneling walls with custom-fit prayer
rooms would fit the bill. With top building rates running
up to $8,500 per sqm plus, one would have to have an
admiration for extravagance! Or perhaps a $240,000
garage in Brighton Boulevard, North Bondi would better
suit the budget? Aston Martin’s do need secure parking
these days!
Wollongong
The prestige market in the Illawarra has been quite slow
over the past two years, but signs are appearing that
the worst may be over. It seems most prestige home
owners opted to hang on to their properties and weather
the 2009 financial crisis. Prestige in the Illawarra starts
at approximately $900,000. Prestige suburbs in the
northern suburbs all lie on the coast, squeezed between
the escarpment, and start at Bulli in the south through
to Thirroul, Austinmer, Coledale, Wombarra and Coalcliff
to Stanwell Park. These suburbs are more like historical
coastal villages rather than suburbs, and are highly
sought-after addresses. We are starting to see higher sales
volumes and better prices in these suburbs, indicating
a recovery. Many properties have sold in the past 12
months in the prestige bracket
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19
In the suburb of Bulli, there is a new and exclusive pocket
by the coast called Sandon Point. In January last year, a
683sqm vacant block with 180 degrees coastal views
was sold for $1.15 million. Covenants on blocks of land
in Sandon Point ensure that only houses of the highest
quality are built, with combinations of building materials
on facades and no ‘project’ home structures. Sandon Point
will be strengthened with the recent approval of a $22
million Stockland project to create a 181-lot residential
subdivision within Sandon Point. The project has a long
lead in time by all accounts and the sales will be spread
over stages.
...undoubtedly, the most exclusive address
in Wollongong is Cliff Road....
The suburb of Mangerton is probably the only real
prestige standard residential suburb towards the centre
of Wollongong, and only in selected streets. Although
Mangerton is not on the coast it offers district views, a
leafy outlook, larger blocks and a close proximity to the
CBD. Mangerton is considered “old money”, consisting of
some grand residences that have been passed on from
generation to generation.
Just to the north of the CBD, in an area popularly known as
North Wollongong, higher prices are achieved, generally
for units, due to the location near the beach and cafes.
There has been an over-supply of prestige units in
Wollongong for some time, but it now looks like the
market is getting tighter, although selling periods are
still lengthy. Undoubtedly, the most exclusive address
in Wollongong is Cliff Road, stretching from North
Wollongong south to the harbour, and on along a cliff
overlooking the ocean. Three-bedroom, two-bathroom
upper-level units on Cliff Road with views to the beach
and harbour can sell for over $1 million, but they are
tightly held and there are few sales. The “Blue Mile”, a
pedestrian walk-way on Cliff Road starting at the harbour
through to North Beach, has undergone some major
upgrading with Federal Government assistance, making
Cliff Road even more desirable, and taking the tired look
away from an important part of the city.
To the south of Wollongong, one of the most prestigious
localities is the Kiama area. It is favoured for its magnificent
ocean views, the famous blow hole, beaches and the river
The month in review
at Minnamurra. Kiama has a historical town centre which
has been mostly retained by strict town planning controls
and attracts many tourists.
Properties on the headland in Kiama Heights are highly
sought after, but tightly held. The highest sale seen for
some time is at 2 Gwinganna Avenue, Kiama. This is a five-
bedroom, three-bathroom dwelling on an 854sqm block,
which sold last September for $2.05 million. The property
has expansive 180 degrees coastal views and last sold in
2004 for $1.87 million. Recently several other million-
dollar properties have changed hands in the area from
Minnamurra to Gerroa. As is usual for the Illawarra, the
regional property market shows signs of recovery when
the northern suburbs and Kiama markets start to move
at the upper end.
When it comes to over-the-top prestige properties, our
valuers have come across many opulent dwellings which
may be over-capitalised in the current market. Generally
they are in the better areas described above, but in some
cases they are in newer suburbs, where cost is not going
to equal value all the time. At present it is still the case
that the market will punish properties that sit above the
norm.
Canberra
Due to the fact that the Canberra property market for
the most part held strong during the GFC, the effects of
a local economic downturn have not extensively been
witnessed upon the prestige sector of the market. Whilst
sales may have slowed down in this period, there was no
downturn as such.
Properties within close proximity of each other are often
miles apart in price, largely due to the relative size of
Canberra itself. As a result, prestige properties are found
in isolated pockets, particularly in the more established
suburbs surrounding the city centre such as Forrest, Red
Hill, Reid and Yarralumla, all of which were established in
the 1920s.
Age and unique specifications are the main factors that
contribute to the prestigious properties, due to the rarity
of well-built houses on large parcels in close proximity to
the city.
One key factor that has allowed Canberra to ascertain a
relatively high level of prestige properties is the demand
for embassies in the locale. However, transactions in
this market are expectedly limited, not only due to the
prestige property market being much more thinly traded
in general, but also due to the fact that these embassies
have been tailored to suit the respective countries that
occupy them.
The market last year still showed a significant number of
high sales within the prestige market, with a number of
$2 million plus sales, including a $3.9 million sale in May
2009 in Forrest and a $4 million dollar sale in O’Malley for
the Saudi Arabian embassy. Although the O’Malley sale is
considered well above the market value, it is still reflective
of the steady position of the Canberra market in 2009.
Central, North & West NSW
DUBBO
Demand and sale prices for high cost properties (above
$400,000) in Dubbo has increased over the past six
months, however most properties are still experiencing
extended selling periods. In January 2010 Dubbo
recorded its highest ever residential sale, with a property
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in Handara Close selling for $920,000. The property is
situated in Delroy Park Estate and comprises six bedrooms,
two bathrooms, three-car garage, large inground pool
and spa and 365sqm of living. The dwelling is regarded
as one of the most prestigious properties in Dubbo due
to its location, size and quality fitout. It sold via private
20
treaty after a marketing period of 3-6 months. The highest
recorded sale prior to this was for a property in Pine Knoll
Drive, which sold for $755,000 in October 2004.
The most sought-after locations for high cost properties
in Dubbo are generally Delroy Park and Grangewood
Estate, both of which have allotments with golf course
frontage. In coming years Kintyre Estate, located on the
edge of town with city views, is likely to prove popular,
with a number of prestige residences recently built or
under construction in this area.
...prestige price points in the region are
around $500,000 for in town residential
properties....
Within the Bathurst/Orange areas the prestige market has,
in general, been quite stagnant in recent months and has
experienced reduced volumes. However, this is starting
to show signs of slight recovery, with sales volumes and
enquiry levels increasing, as reported by local agents.
Prestige price points in the region are around $500,000
for in-town residential properties and above $600,000
for rural residential areas on the fringe. Within Bathurst,
the prestige rural residential localities/developments are
located at Wentworth Estate and White Rock, with both
tending to demand a slight premium, compared with
alternate rural residential localities.
South of Orange, areas surrounding Mt Canobolas tend
to hold higher land values due to proximity to Cadia gold
mine and the picturesque nature of the area.
The month in review

NSW Central Coast

Newcastle The mix of real estate on the NSW Central Coast is
somewhat diverse, with fluctuations between the
Prestige residential houses in the Newcastle City Council
coastline strip, older and newer residential estates, high
region are generally priced from $2 million, with the
density areas to outerlying rural areas.
highest recorded sale in the past five years fetching $7
million in February 2008 for a house located in the premier
Last year will be remembered on the Central Coast as the
suburb of The Hill. Since January 2005 28 $2 million plus

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“Year of the First Homebuyer”, with segments outside the
house sales have been recorded,in Merewether, The Hill
first homebuyer range seeing little activity. The second
and Bar Beach.
and subsequent home buyer markets, along with the
investor markets really did take a back seat, as did the
The above numbers clearly show that the prestige houses
prestige real estate markets.
are generally located in one of three suburbs, with all of
these suburbs boasting coast frontage. The prestige

21
The prestige real estate market is a segment which has
properties will feature proximity to popular surf beaches,
almost always gone about its business in a quiet way.
elevated beach, ocean, harbour and possibly city views,
Even more elusive is the blue ribbon property market.
and proximity to the CBD and popular restaurants. There
Depending on one’s view, this level of property can either
were a significant number of sales recorded for both
be located anywhere on the coastline or waterfront area,
2007 and 2008, however as the residential middle- and
or the equally beautiful rural/residential areas.
upper-end markets slowed in 2009 there were only three
recorded house sales of $2 million plus.
The price point for these properties starts at the $3.5
million mark on the southern end of the coast and $2.5
Prestige residential apartments within Newcastle are
million on the northern end. Real estate agents report
generally priced from $1.75 million, with the highest
that in the current market, the level of enquiry is good,
recorded sale from the past five years being $2. million in
with their main challenge being the lack of available
October 2006 for an apartment located in a harbourfront
properties suitable to the prospective buyers. It has been
complex Breakwater Apartments. Since January 2005 30
found that buyers in this segment of the market are
$1.75 million plus apartment sales were recorded.
patient and prepared to wait extended periods to find a
home or apartment that meets their requirements. Once
Prestige residential apartments are all located within
found though, negotiations are usually discreet, for those
either Newcastle or Newcastle East and feature CBD
entering into discussions tend to avoid getting too much
locality, proximity to popular surf beaches, elevated
attention. But once started, negotiations are quickly
beach, ocean and harbour views, large size and high
finalised with the quantum paid for the property being
quality fitout. Sale volumes continued to firm throughout
a secondary issue.
2009, however this is more a result of the continuing
supply of new apartments being released to the market.
The main coast and waterfront suburbs which hold
This market can show a premium being paid for the latest
prestige properties include Pearl Beach, MacMasters
apartments that may not continue in the medium term
Beach, Avoca Beach, North Avoca, Saratoga, Point
if/when newer apartments are released.
Frederick, Terrigal, Wamberal, Blue Bay and Toowoon
Bay. The rural/residential equivalents include Matcham,
What 2010 holds for the prestige residential market is a
Holgate, Avoca Beach, Picketts Valley, Somersby,
vexing question, however we would suggest that buyers
Yarramalong and Dooralong.
will be about looking for property that is well located
...last year will be remembered on the
Central Coast as the “Year of the First
Homebuyer”....
A few examples of blue ribbon sales over the past year
include a four-bedroom property wit direct frontage to
Brisbane Water at 57 Village Road, Saratoga, for $4.65
million It was last traded in March 2005 for $4.2 million.
A record price was set when beachfront property at 48
Coral Crescent, Pearl Beach, sold for $5.8 million after
previously being sold in 1996 for $730,000. A penthouse
apartment within The Lighthouse complex which
occupies a headland position at 6/15 Cliff Avenue, Avoca
Beach, sold for $4m.

When talking about blue ribbon property, it is not unusual

to hear of some unique feature, however, the Central
Coast seems fairly sedate when it comes to the bizarre,
strange and quirky. Some examples found over time
. include a fully-equipped stable complex with veterinary
The month in review
facilities and covered dressage arenas, a seriously
equipped hidden panic room, with an equally seriously
equipped cellar with back-to-base monitoring, the odd
helipad, private chapels and a private skate park.
NSW Mid North Coast
There is a small quantity of residential property selling
above $1 million along the mid north coast of New South
Wales, with the prestige market throughout generally
starting at around $750,000. The old adage “Location,
Location, Location” holds true and most prestige property
is likely to have a good proximity to water (ocean, canal,
river etc).
The most exclusive property market is at Pacific Palms
and Seal Rocks, where premium values are paid for good
proximity to beach. Over the past five years, land values
alone for direct beachfront property hovered around
$2.25 million, with the highest house price achieved
being $3.5 million in April 2008. Nearby non-beachfront
houses generally need to be of a modern, substantial size
and have a high quality fitout to be classified as prestige.
Following a two-year lull in sales activity, there have
been three recent $1.45 million plus sales at Pacific Palms
in November 2009, including a non-direct beachfront
house at Boomerang Beach selling for $2.5 million, which
suggests this premium market has only weakened mildly
in recent years following regained purchaser confidence
in the economy. This market sector is also unique in
its low percentage of owner occupiers, being mostly
investment driven from holiday-derived income or the
dream ‘weekender’ holiday house. Outside of this area,
most of the mid north coast region’s prestige property is
owner occupied.
In nearby Smiths Lake and Coomba Bay, recent prices
for residences having good lake frontage generally peak
at $750k, elsewhere in the Great Lakes region premium
property prices likewise gravitate to water. The upper-
end market in Forster/Tuncurry peaks around $1.05
million for coastal houses with panoramic ocean views
or an urban aspect, $735,000 for canal frontage property
and $950,000 for substantial quality houses on periphery
acreage. Sales activity for premium high-rise units
($750,000+) have declined in recent years through over
supply and weaker demand, particularly from investors.
...over the past five years, land values alone
for direct beachfront property hovered
around $2.25 million...
For the Greater Taree region, premium prices are usually
paid for a position upon the Manning River, and this is
evident in six recent riverfront sales spanning from
$645,000 in Wingham, to a market high of $950,000 in
Pampoolah for 31 hectares. Such sales further confirm a
renewed economic confidence and no significant decline
in premium property prices. Outside of riverfront property,
the premium residential market generally comprises good
size modern dwellings on acreage ($550,000 to $700,000)
for which demand has noticeably weakened, possibly a
result of tightened borrowing following concerns over
future interest rate rises.
In Port Macquarie to the north, the highest recent sale
was a $1.65 million riverfront dwelling in December
2009, though sales of this type are infrequent. Canal
front property has recent highs in the mid $900,000’s and
$1.1 million has been achieved for a house overlooking
Lighthouse Beach. Sales activity for premium high-rise
units ($800,000+) has declined in recent years through
over supply and weaker demand from both owner
occupiers and investors, however there was a recent
penthouse sale at $1.3 million opposite Town Beach.
RESIDENTIAL
Mansion-style dwellings located in the Hastings region’s
semi-rural areas, such as Kings Creek and Sancrox, remain
volatile to over-capitalisation following weakened
demand from purchasers for non-prime locations.
In general, those vendors of prestige property who are
22
able to wait out extensive listing campaigns - sometimes
up to two years - are able to achieve good sale prices,
particularly for prime located land with finite supply,
such as beachfront or riverfront. Forced sales of prestige
property, such as a $1.525 million near beachfront duplex
at Boomerang Beach in November 2009 or a $650,000
substantially size house at Kings Creek, have shown that
discounts in of 10-20% may be required to achieve a sale.
This is the main caution for prestige property along the
mid north coast at present.
Southern NSW & Northern Vic
ALBURY
High-end properties are purchased for owner-occupier
purposes in our region, and any residential properties
with a value of $500,000 or more are categorised as
prestige properties. Properties in these markets represent
a lifestyle choice and tend not to yield high returns in
comparison to other property investments.
The GFC and national economic downturn appear to
have minimal negative affect on the prestige house
market in the Albury/Wodonga region. Market evidence
shows that prices for prestige and executive-style houses
remained steady throughout 2009. There is little evidence
of decreasing values.
However, most local agents reported that the consumer
confidence has improved, but not enough. Prestige
quality homes in some areas are showing the effects
of over capitalisation, with many of these dwellings
The month in review
realising purchase prices lower than owner and agent
expectations.
The prestige market should continue to improve, as
strong economic growth and falling unemployment,
along with Albury City Council investing in the city by
upgrading infrastructure and parklands etc. This is giving
purchasers confidence to buy premium homes. One of
the local agents stated, “No doubt, prestige properties
continue to be highly sought after in our region. I would
love to reserve more stocks, because once you’ve got the
stock, there are buyers there.”
This interesting prestige property at 15 Brewer Drive, Wodonga, sold for
$980,000
The magnificent property in Wodonga on a 3,869sqm
block is the perfect haven for families who are looking
for plenty of space for kids and pets to romp or swim
in the pool. Mum and Dad can keep an eye on things
while relaxing under the patio. The home features five
bedrooms, three bathrooms and a four-car attached
garage. Site improvements include in-ground pool and
extensive paved areas. The property enjoys good north-
easterly views.
WAGGA
The prestige price point within Wagga Wagga is the over
600,000 mark. There are higher valued properties of over
$1 million, but these usually includes acreages, such as a
working farm.
Over the past 18 months this market has suffered the
most in Wagga. We have seen little activity and price
levels stay virtually dormant. The majority of Wagga’s
prestige properties are located within either Lake Albert
or the old part of Central Wagga. Lake Albert is famous
for its view across the lake, while central is the oldest part
of Wagga, with its period homes and tree-lined streets,
as well as its close proximity to the CBD and racecourse.
Developing suburb Tatton is just starting to realise sales
prices around this threshold.
The market has generally been stagnant due to the large
gulf between vendor’s expectations and what purchasers
are prepared to pay. As this price point is lower than in
capital cities the mortgage pressure on vendors is far
less. So what we’ve been seeing is a stalemate between
vendors and purchasers, with vendors prepared to wait
until markets improve.
The best example of a prestige property sale in Wagga is
at 38 Trail Street, Wagga Wagga (Central) for $850,000 in
December 2009. This property was a detached, circa 1900,
single-storey, rendered, five-bedroom, two-bathroom,
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prestige house, with corrugated metal roof and study.
Ancillary improvements include an inground pool. The
property set on 1,505sqm has very good internal and
external condition and excellent presentation. This
property fetched a very good price and indicated that
prestige property market in Wagga could be on the move.
23
However, due to the small size of this market there aren’t
any obvious opportunities available.
...the prestige price point within Wagga
Wagga is over the $600,000 mark....
The most over-indulgent feature within a prestige
property in Wagga we’ve come across is a fully-tiered
movie cinema, complete with full screen and surround
sound for the complete movie experience.
LEETON
This market does not have too many blue ribbon
properties in the price range of $1-5 million. The prestige
range for the area is $800,000 to $1 million, however
these types of properties very rarely sell. Sales for these
types of properties occur every 1-3 years.
The main market in Griffith is in the middle,, where homes
sell from $250,000-400,000. There have been a reasonable
amount of sales over the past three months. The main
market in the Leeton/Narrandera is the lower- to middle-
end, where homes range in price from $150,000-260,000.
There have been limited sales in this area over the past
three months.
Melbourne
Incorporating the municipalities of Maroondah
(Ringwood/Croydon area) and Yarra Ranges (Lilydale and
surrounding Yarra Valley and Dandenong Ranges rural
fringe areas), prestige here normally means $1 million
plus, and more often than not comes in the form of
small acreages, sometimes with equestrian associated
improvements. These are called lifestyle properties.
Maroondah has provided only one $1 million plus sale
so far in 2010, at 204 Jumping Creek Road, Wonga Park.
This five-bedroom, eight-room dwelling on 4.9 hectares
of land sold for $2 million in January. Wonga Park is
known as a prestige rural/residential township, with
three land sales so far this year - two around the 600sqm
area for $355,000 and $385,000 and a 6,000sqm block for
$482,000, which was only a 30% increase in price for 10
The month in review
times as much land. Apart from the $2 million sale, only
three other improved sales have been reported, ranging
from $540,000 to $674,000 for three- or four-bedroom
dwellings on land of 570–2,000sqm.
Statistics can produce some very strange results,
particularly with low volumes of sales, but the median
price for Wonga Park so far in 2010 is $540,000. This shows
a 35% drop from the $830,000 median for the second half
of 2009, but this can be attributed mainly to the normal
density/low density/small acreage mix in the sales
changing, rather than an actual drop in values.
Longer term trends for Wonga Park show that the median
price increased 134% during the first half of the 1990s
and only 20% during the second half of the decade, which
included the global financial crisis.
Yarra Ranges has provide four $1 million plus sales so
far in 2010, ranging from $1.05 million to $1.67 million.
All came with substantial houses on 1-8 hectares of land
in the rural townships of Woori Yallock, Seville, Mount
Evelyn and Narre Warren East,
The volume of sales in this sector has been quite low so
far this year and should be described as thinly traded..
Past factors affecting this sector have been business
confidence, interest rates and unemployment. The
Victorian bushfires are still fresh in Victorian’s minds
and will probably continue to have a dampening affect
on particularly small acreage property in rustic areas on
Melboune’s outer fringe, even in areas not affected by the
recent bushfires, such as Eltham, Warranyte and Wonga
Park.
Data sourced from the REIV/Realestateview database
...past factors affecting the sector have
been business confidence, interest rates
and unemployment....
Regional Vic
ECHUCA
Once the GFC hit and liquidity became an issue, people
were less prepared to indulge in higher-end property
until they knew what the extent of the fallout might be.
Consequently, properties in the very top bracket of the
local market proved difficult to move. Twelve months on,
and high quality property is once again attracting buyers,
in particular, those with a central location or in close
proximity to the Murray River.
The market for property of this nature remains only thinly
traded, with limited demand and supply, and is better
established in Echuca rather than Moama. Several sales
of three-bedroom townhouse type accommodation have
been achieved in the $550,000 bracket for Echuca, while
there appears to be a threshold of $400,000 for similar
developments in Moama. Several properties in Moama
pitched at higher levels have failed to attract buyers to
this point.
Rural residential properties appeal to a different sector
of the market, and we have seen several solid sales of
between $700,000 to $1.3 million for properties on an
acre or two in close proximity, or on, the Murray River.
Price is dependent on the setback from the river and
quality of the improvements. Like with most regions,
the attributes of location, quality of fitout and extent
of ancillary improvements are all important, while well
maintained and presented older properties, boasting a
history and heritage, have been favoured above more
modern prestige dwellings.
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24
GIPPSLAND
Latrobe Region
The Latrobe market is considered to be very stable at this
juncture, with properties on the market for a short period
of 14-28 days in Traralgon. The lower end of the market is
continuing to show a very strong performance. \ Buyer
enquiry is very strong, with agents advising a shortage of
stock and demand outstripping supply.
East Gippsland Region
The lower end of the market continues to be strong with
good volumes of sales. The higher end of the market
is showing a static performance, but also showing an
increase in sales. There has been a good volume of vacant
land sales, and properties below the $250,000 price range
have seen an increase of approximately 10% over the
previous 12-month period.
Overall for both regions, the general market shows no
indication of slowing with the reduction in the First Home
Owners Boost.
MILDURA
Prestige residential property in Mildura is almost
solely property fronting the magnificent Murray River,
predominantly on the New South Wales side of the river,
due to it being higher land, not because of the state, and
within 10km of the heart of Mildura. The NSW town of
Gol Gol, 7km east of Mildura, is the region’s ‘Toorak’ and
has the two premium riverfront subdivisions referred
to as Carramar Drive and Riverbend Estate. Riverfront
properties in these estates have a land value of around
$900,000 and most developed properties are in the $1.5-
$3 million price range.
Generally $1 million is the price point for prestige in the
region and the highest sale price for a house has been
$2.9 million for a Carramar Drive riverfront property in
2007.
The month in review
The prestige market has been very slow and two
properties in the $1.2-$1.6 million price range have been
on the market for over nine months and met with limited
interest. With the depressed horticultural outlook in the
region, it is likely that the prestige market will remain
slow for some time, until a greater degree of confidence
emerges.
Evidence suggests a drop in value in the prestige sector
since the peak of late 2007 of around 15% and no
improvement in recent times has been evident.
Adelaide
The prestige residential market has held up relatively
well during the latter part of 2009 and early 2010. Whilst
purchasers are still remaining somewhat hesitant in
making buying decisions, ultimately prices for higher-
end properties of good quality have held firm. The market
that has fallen away in recent times has been the upper-
end properties that have some perceived fault. Buyers in
this high-end market tend to be more discerning in their
purchasing decision and if there is some fault, defect or
negative issue surrounding the property then the set
price is more difficult to achieve.
Prestige property tends to relate to properties in excess
of $1.5 million, with the market ceiling at the present time
being around $4 million. There are properties of a greater
worth than this amount in the market, however they
do not sell very often. The cream of the crop in terms of
higher-priced properties appears to be the inner southern
suburbs, with a couple of properties in Unley Park selling
very well in recent times for prices around $3.3 million to
$3.5 million.
...the market that has fallen away in recent
times has been the upper-end properties
that have had some perceived fault...
The general feeling within the prestige residential market
is that it has fared surprisingly well through 2009, and it
remains to be seen if prices hold during 2010. Our feeling
is the good quality properties will hold their value, while
the second-tier prestige properties may suffer to some
extent due to a decline in demand.
Brisbane
The Brisbane prestige sector is taking its cue from the
great global military forces at present – Shock and Awe.
On the face of it, it’s difficult to make sense of how those
with the dollars are viewing the prestige sector in the
great South East, but dig a little deeper and the logic
begins to form.
Case in point – there appear to be plenty of $5M+ buyers
in our city but just not enough stock. One near city agent
has been ringing his hands with a couple of big dollar
buyers just chomping at the bit to get into some serious
Brisbane prestige but, unfortunately for this deal maker,
there just isn’t enough super high price stock to sate their
appetite – (I’d just like to say at this point if they’re willing
to lower their expectations just a little, I may have a nice
little 3 bedder in Paddington that I could be convinced
to part with for $4.9M cash!...). We understand that in
the past, those buyers with a lot of available dollars have
become frustrated with our city’s more conservative high
end construction nature and taken their money to areas
such as the Gold Coast where they really know how to
glam up the top end.
RESIDENTIAL
25
By our count there have been about six sales in the past
six months for more than $7M, which is startlingly strong
for our city.
The driver seems to be that operators in this bracket – the
truly wealthy – haven’t been the hardest hit by the general
economic slowdown. Most owners have been willing
to hold onto their homes and wait out the doom and
gloom, and those that do sell probably have some need
to. Notably, buyers in this bracket are often also immune
to economic woes and are willing to pay the price when
the appropriate property comes along.
It is also obvious that these buyers want land. The bigger
the block, the better – it provides plenty of privacy and
ensures there is room for the family to run around. It’s
been rumoured one recent buyer from out of town was
amazed that, if you can find them, the ability to buy large
parcels with beautiful homes within 5 km of the GPO for
under $12M seems like a steal.
Some notable recent sales in Brissie include:
“Glenworth” - 34 Howard St, Paddington – sold for
$10,350,000. A 6053 sqm parcel in one of the most
city’s most sought after streets. The property has a
restored 1890’s heritage listed property which includes
six bedrooms, four bathrooms, gymnasium, pool, tennis
court and a croquet field – only possible after the previous
owner parted with a tidy sum to buy out a neighbour.
22 Sandford St, St Lucia – $7,750,000. This location
includes some of the most desirable real estate in
Brisbane and river frontage accounts for the suburb’s
premium positions. Whilst not a large block at 885sqm,
this property has views down two reaches of the river and
takes in the CBD skyline. The home provides 430sqm of
living and accommodates three bedrooms, study, four
bathrooms, home theatre and cellar. The property has a
five-car garage and also includes a private pontoon at
which to moor you tinnie.
The flipside to all of this is the $3M - $5M market, which
seems to have become a hard sell. Our valuers have
The month in review

reported a number of riverfront homes in traditionally
desirable areas such as Chelmer hitting the market
with barely a ripple from buyers. We are even aware of
the recent sale of a riverfront three level contemporary
home on 600 sqm in the city suburb of West End for a
mere $2.5M… an extraordinarily good buy for a very, very
well located residence. This market does have a number
of sellers who were over extended and now need to get
out or face trouble.
To summarise, the prestige residential real estate market
is not what it used to be but is definitely on its way back.
Leading the charge is the waterfront market with the
majority of sales occurring within Sovereign Islands,
Sanctuary Cove and Surfers Paradise.
Volume of sales in 2009 was approximately 50% of that
during the boom of 2007 and 77% of the sales volume
achieved during 2008.

Besides the slide in the volume of sales, prices softened

...the only danger with the high-end
across various sectors. The strongest performing location

RESIDENTIAL
attached houses is the ability for resales to over the past 12 months was Sovereign Islands with 26
stay strong.... sales over $2,000,000.

In the unit market, few pundits could look past the The highest sale within the past 12 months was 72 The
successful debut of the Aquila in New Farm, a Tom Dooley Sovereign Mile, which sold in November for $9,000,000
project which has recorded an eye-popping result for our and comprises a seven bedroom, eight bathroom house

26
town. Ten units on ten levels (that’s right, by complex built over three levels with a twelve-car basement, total
algebra that equates to one unit per floor) that have floor area of 1,834 sqm. The property is situated on 1,475
been progressively selling since earth was turned onsite. sqm, west facing to the canal.
At the time of the building’s release in November 2009
only a few remained available for purchase and as at the
time of publication we understand there is only one left
on the market. Price? Starting at $5,100,000 and peaking
at $6,600,000 for the penthouse, each unit has a living
area of about 320sqm, outdoor area of 100 sqm, media
room, C-bus automation and a finish that is about as
good as it gets. Whilst the location and the city views will
have played a major hand, there will be some avid Tom
Dooley followers who have purchased on the developer’s
reputation for going all out on projects.
52 The Soverien Mile.
The only danger with the high-end attached houses is
the ability for resales to stay strong. The Riperian tower
broke local records when it sold most of its units off the
plan for between $1.5M and $2.5M in 2005, only to then
surprise again when resales started cracking $3M+. Of
late, however, the heady honeymoon has cooled. At last
count, nine of the units were back on the market, with
two of those being listed by pretty keen vendors. Resales
in this landmark project may be worth watching.

The upshot appears to be that Brisbane has been a little

conservative in its construction flair at the high end
but there are those who are looking to lead the charge
to change and may well handsomely profit from their
foresight.

Submarine dorr to basement cellar to protect cases of grange from

flood.

Gold Coast & Tweed Coast

GOLD COAST

Whether it be known as prestige or luxury, properties

of this ilk in the Gold Coast region are many and varied
in both price range and location. Our property market
over $2,000,000 includes lifestyle hobby farms with
sprawling homesteads, whole floor highrise apartments
and penthouses, canal/waterfront suburban houses and
those on absolute beachfront.
Turntable (ala Batman and Robin) in basement carpark to enable easy
exit.
The Gold Coast beachfront market is possibly monitored
too closely in the national press due to the prices
achieved and identities prepared to pay them. The past
12 months has been a period of consolidation, with a
The month in review
number of sales at the hands of receivers and prices well
below those achieved previously. However, these sales
appear to have found an equilibrium and we consider this
market to have bottomed.
The most recent sale on Hedges Avenue, Mermaid Beach
is an old, two-storey, 1960’s fibro house on 405 sqm with
10 metre frontage for $4,500,000. Another property
along Albatross Avenue has achieved $6,500,000. The
Palm Beach beachfront has experienced volatility in
prices due to recent storm erosion, however, a current
sale at $2,800,000 suggests confidence has returned to
this section of our coastline.
Whilst not exactly beachfront, Currumbin Hill generally
attracts strong enquiry due to the larger allotments and
view corridors. 14 James Street sold at auction last week
for $8,200,000 which sets a price record for the southern
end of the Gold Coast. The property comprises a five
level, five bedroom, six bathroom house with four-car
accommodation, two swimming pools and a total floor
area over 1,622 sqm. The property has 360 degree views
including the Burleigh headland and Coolangatta skylines
and land area total of 1,949 sqm.
Taking into account the sales activity in the beginning of
2010 it appears that consumer confidence is beginning
to return to this market sector and we consider the prices
have stabilised. There is some sentiment that prices will
improve within the next 12-24 months and that now is
a time of opportunity. The Gold Coast prestige market
is closely linked to volatility of the stock market and
performance of Sydney prestige markets as well as the
Gold Coast development industry. There is no doubt that
2010 is going to be an interesting year closely monitored
by many people and that those having the fortitude to
make a step now could be well rewarded.
Unique features
As cost becomes less of a factor in construction budgets,
owners wanting something different are including
features such as: salt water marine aquariums (up to
$50,000), Glass commercial lifts ($150,000), turntables on
garage floors, or even submarine doors to protect their
valuable ‘Grange Hermitage’ from flood.
TWEED HEADS
The market for prestige properties within Northern NSW
was affected by the GFC and reduced market confidence
throughout the majority of the 2009 calendar year.
Demand slowed and values softened throughout 2008
and into mid 2009. However, increased buyer enquiry and
market activity have occurred in this sector of the market
during the latter period of 2009 and into the early stages
of 2010, creating greater stability in the marketplace. A
good example of stability within the unit sector of the
prestige market is a resale of a duplex unit in Lighthouse
Road, Byron Bay. The unit was purchased near the peak
of the market in May 2007 for $1.84 million and resold in
November 2009 for $2 million.
The prestige market within regions of Northern NSW
generally relates to properties priced at $1-$1.5 million.
Suburbs which generally include prestige residential
properties include Ballina, East Ballina, Lennox Head,
Brunswick Heads and Ocean Shores/New Brighton.
However, prestige properties within Byron Bay and its
surrounding localities, including Suffolk Park and Broken
RESIDENTIAL
Head, generally relate to properties priced above $2
million and extends to $7 million or above. The prestige
property market within Northern NSW also includes rural
residential properties situated within the hills west of
Byron Bay, such as Ewingsdale, Coopers Shoot, St Helena,
Possum Creek, Coorabell, Bangalow, Myocum and Federal,
27
and rural localities surrounding Mullumbimby, Alstonville
and Ballina/Lennox Head.
There has been increased activity (both sales and enquiry)
noted within the $1-$1.75 million price brackets from
October 2009 to the present time, with sales occurring
in both the standard residential and rural residential
markets. However, the market for properties priced
above $1.75 million generally becomes slower and is
affected by a reduced buyer market. Leading agents
are also reporting that it is still difficult to obtain any
form of commitment from potential buyers if asking
prices are not considered to be realistic. There is also
resistance within the lower priced prestige market, up to
$2.5 million, due to a combination of tightened lending
markets and contracts being conditional upon the sale
of existing property, which are generally also situated
within the prestige market.
...there is also resistance within the lower
priced prestige market...
Byron Bay is the most consistent area in which prestige
properties are traded. Within Byron Bay is the exclusive
Wategoes Beach precinct which comprises a total of
approximately 90 properties, 15 of which are situated
along the beachside Marine Parade. This precinct is
situated below the Cape Byron Lighthouse and the
majority of properties have a north aspect over the beach,
ocean, Julian Rocks and Mountain Ranges to the north-
west. Since the mid 1990s, Wategos Beach has continued
to establish itself as a prestigious enclave. There has
been one confirmed sale occur along Marine Parade for
$5.5 million. Due to limited stock available for properties
within Wategoes Beach, premiums have historically been
paid for available product. An improving market and
renewed confidence may see premiums return to the
marketplace within Wategoes Beach.
There have been several sales of prestige rural residential
properties above $4 million since October 2009 within
the hills of Byron Bay. These sales include a property at
Myocum for $4.15 million. This property comprises 30.5
hectares of generally cleared land with distant ocean
glimpses and views to Cape Byron. Then property
comprises a five-bedroom, four- bathroom pavilion-
style dwelling with extensive ancillary improvements.
A further sale includes a property at Goonengerry, near
Federal, for $7 million. This property comprises 33.92
hectares of moderately undulating land which falls to the
The month in review
rear boundary and river frontage. with dual residences –
one new and an older Federation-style. The property also
includes extensive good quality ancillary improvements.
Sunshine Coast
The prestige residential property market on the Sunshine
Coast is still considered to be properties that are $1 million
and above, however in the last cycle these properties
have become more common. What typically sets these
properties aside from the norm are that they are by nature
discretionary, and are more of a want, rather than a need.
Subsequently, in the last downturn the prestige market
on the Sunshine Coast has been the hardest hit.
One of the best-known coastal regions in Australia is the
Noosa area on the northern Sunshine Coast. A substantial
number of homes within this prestige market are being
used as holiday homes. When the market turned the
first thing to go was the holiday home. Subsequently,
we have a number of examples where values have fallen
dramatically.
46 Masthead Quay
An example of this is a property in Masthead Quay,
Noosaville. This property is an architect designed, four-
bedroom, three-bathroom dwelling with 33m of canal
frontage. The property was previously sold in April 2004
for $3.05 million and was sold in May 2009 for $2.3 million.
This indicates a decline of approximately 25%.
The central and southern Sunshine Coast prestige
markets have also been affected, however it would
appear to be to a lesser extent as there is a higher ratio
of owner occupiers within these localities. Subsequently
these owners have been able to hold on through the
stormy weathers, however owners who have had to sell
have shown some decreases of up to 20%.
...one of the best-known coastal regions in
Australia is the Noosa area on the northern
Sunshine Coast....
It would appear that over recent months the prestige
market appears to have stabilised somewhat, as the
number of home owners that have been forced to sell
have already done so. Therefore we are left with vendors
that appear to be able to hold on under the current
circumstances, however only time will tell.
Interestingly, there have been a couple of strong sales in
the $5 million plus market within the central Sunshine
Coast. A house in Millgrove Place at Buderim was sold in
June 2009 for $6.5 million, a record in the area.
Also a house on Minyama Island, Minyama, sold in
November 2009 for $5.7 million which is also a strong sale.
These sales are both to local owner-occupiers and goes to
show that there is still buyer interest for properties within
this upper price sector.
As any agent will tell you, achieving a sale in the current
climate is still difficult. Bringing vendors, who are after
the highest price for their property in a slow market, and
RESIDENTIAL
buyers, who are only interested in getting a perceived
bargain, together is still fraught with some pain.
28
Southern Queensland
TOOWOOMBA
The prestige property market in Toowoomba is primarily
confined to the eastern escarpment and environs and
usually has positive attributes such as a range view, large
lot size, desirable street address and quality home with a
street presence.
The price point which separates the prestige market from
the balance of the market is considered to be generally
around $800,000. Prestige properties, however, comprise
a small percentage of overall sales in Toowoomba, with 23
recorded sales in 2008 and 16 sales in 2009. Other areas
which have recorded some sales in excess of $800,000 are
in Blue Mountain Heights to the north of Toowoomba,
and Cotswold Hills which is a suburb on the western
outskirts of the city.
Good interest is currently being shown in this market,
with a property recently going to contract for over
$800,000 after 50 parties had inspected it within a short
time frame. Two recent sales which demonstrate that
Toowoomba has a sound prestige market are in Tourist
Road and Mayes Street. The Mayes Street property sold
for $2.8 million and the Tourist Road property, which
features range views, is under contract for an undisclosed
price, but in excess of $2 million. This property had been
listed for some time with an asking price in the high $2
million bracket. A property in Burraway Court, which is
located on the south east side of the city and features
a large home, tennis court and panoramic range views,
sold recently for $1.25 million. A large home in Curzon
Street sold for $880,000 in December 2002 and resold in
May 2009 for $1.25 million. This sale demonstrates the
underlying strength of this market segment.
An interesting feature of the Toowoomba prestige market
is the number of new house constructions with build
costs in excess of $1.5 million. An example is in Campbell
Street where an existing property was purchased for $1.25
million with the intention of demolishing the existing
house and constructing a new prestige dwelling on the
site. Other large home constructions are in progress in
Kara View Drive and McStay Street, locations both offering
panoramic views.
The month in review

The prestige property market in Toowoomba at present BUNDABERG

is considered sound, with good interest being shown in
properties that can meet buyer’s expectations.
IPSWICH
The prestige property market in Ipswich is limited to the
Brookwater golf course estate in the Greater Springfield
area. Property values in this sector range between
$700,000 to more than $1 million. This sector, like most
higher-end markets in the country, has experienced an
easing in values over the past 18 months.
The Bundaberg prestige residential market is mostly
focused on Esplanade or waterfront property in
Bargara. Off-the-plan sales in a new prestige apartment
development on Miller Street, Bargara, have been in the
$1.15-$1.35 million range. In two instances, a purchaser
has combined two units to be redesigned as a four
bedroom and media room apartment with a purchase
price in the order of $2.6 million.
Older houses on Woongarra Scenic Drive have sold in the

There’s an increasing number of mortgagee sales occurring
in this estate, which in most cases has represented a
loss of up to 10-15% on the initial purchase price. Some
properties have been on the market for periods of up
to 12-18 months and have been greatly reduced to
achieve a sale. This inherently comes down to the high
cost to construct a prestige property in this location, with
most “build” contracts being upward of $600,000. The
difference between the cost to build and sale prices being
achieved in the current market is between $100,000 and
$200,000. This mostly applies to the prestige properties
with golf course frontage, while properties without golf
course frontage are still holding their value.
...there’s an increasing number of
mortgagee sales occuring in this estate....
29 RESIDENTIAL
order of $900,000. A penthouse apartment in a five-year-
old complex on the Esplanade sold recently for $880,000.
The prestige market is generally slow, however sales have
been occurring for the right product at the right price.
HERVEY BAY
The prestige Residential Market on the Fraser Coast
comprises Esplanade front properties, rural residential
properties, renovated ‘Queenslanders’, modern architect-
designed dwellings and penthouse units.
Generally homes above $700,000 on the Esplanade are
considered to fall into the prestige market, and those
above $600,000 for non-Esplanade properties. Strong
marketing campaigns are required for both sectors,
however those non-Esplanade front properties are
competing with homes that have a view and are located
opposite the beach, so may require a reduced sale price
in order to attract buyers.

Central Queensland
ROCKHAMPTON

Prestige property in Rockhampton is mainly located on

the upper eastern slopes of the Athelstane Range, where
homes include large Queenslanders, many which have
been extensively renovated and provide city views. Other
prestige property can be found along the flood-free
banks of the Fitzroy River. It is only in relatively recent
Although located on the Esplanade, some of the dwellings
times that sales have broken the million-dollar barrier.
listed in the prestige price range would not be considered
We saw a record sale towards the end of 2009 set a new
prestige homes. Their location, views and size of land
benchmark of $1.4 million. This was one of four sales over
make them potential redevelopment or renovation
the $1 million mark at that time. Previously sales over
sites though. The market in this price range seems to be
$700,000 were considered the cream of the crop. This
steady for the region, with agents and owner-occupiers
section of the market is still thinly traded but has survived
confident the market will again go ahead. An example of
the GFC well. The prospect for the future remains bright,
this confidence in the current market is the recent sale
on the back of established industries and growth in the
of a house and flats located on the Esplanade which had
mining industry.
been relisted for sale approximately $200,000 above its
previous sale price in October last year.
Similarly on the Capricorn Coast, prestige property is
thinly traded, and focused on geographic features, rather
Fittings and fixtures in houses in the prestige market
than particular suburbs. Beachfront property, elevated
include pools and entertainment areas, added bathrooms
homes with good views and, more recently, a select
and bedrooms, which lift prices, rather than luxury items
number of penthouse units, make up this market. Again,
such as lifts and home automation. There are a few
the million-dollar market is something of a threshold,
standout properties trying to attract prestige buyers with
although houses have sold to $2.4 million over the past
inclusions such as sensor taps, imported tiles, security
18 months. Slow but steady demand, an optimistic coal
systems and high quality fittings and fixtures.
mining sector, low vacancy rates and strong employment
will allow the prestige market to gain more momentum.
The month in review

There isn’t the demand for prestige homes to be produced

on a large scale in this region, like there is in areas such as
the Gold and Sunshine coasts. Generally homes are built
for owner occupiers, with few available at any one time to
create oversupply issues.

The upcoming mortgagee sale of 21 units in the Peppers Cairns

Resort complex includes five penthouse units. With little
sales evidence over the past 12 months, the market will
be eagerly awaiting these results as they will most likely
set new benchmark levels
The prestige housing sector is hard to define in Cairns,
but would generally be accepted as $1 million plus. This
market would cover houses along the beachfront of the
Northern Beaches, plus a smattering of homes in other

MACKAY
The prestige market in Mackay had been pretty stable
prior to the effects of the GFC. The unprecedented
prosperity of the mining boom helped push the Mackay
market to strong growth, including the prestige sector.
RESIDENTIAL
parts of the city, particularly in the more elevated areas of
suburbs such as Edge Hill, Whitfield, Mooroobool, Earlville
and Bayview Heights. However. many of the beachfront
houses valued at $1 million or more are not necessarily
prestige houses as such, but they are executive-style
houses that happen to be positioned in a prestige location

The downturn in the mining sector coinciding with the
financial crisis throughout late 2008/early 2009 took
its toll, especially on the prestige sector in the Mackay
Region. Prestige properties in the region are generally
considered those above $750,000, however agents were
reporting very little demand for properties listed above
$600,000. Values in the top end market fell up to 20% in
some areas.
...billions of dollars in new mining projects
in this region has confidence levels on the
rise....
It has become evident that the New Year has brought
a new sense of optimism to this market sector. The
economy in the Mackay region is heavily reliant on the
fortunes of the Bowen Basin coal industry, situated to the
west of Mackay. Billions of dollars in new mining projects
in this region has confidence levels on the rise. Agents are
reporting increased interest in the prestige market, across
both coastal and city areas. A local agent has reported
five properties under contract at sales between $750,000
to $1.025 million within the last month.
GLADSTONE
Generally, the prestige property market in Gladstone
starts at approximately $650,000-$700,000 for Tannum
Sands and Boyne Island. These prestige markets were
very quiet over the first two quarters of 2009, with only
a handful of sales, however sales activity has picked up
in the latter months of 2009, albeit at a level reduced
from the original list price. Over the past 12 months there
have been only two sales over $1 million. The two sale
properties were located in the Catalina Heights estate
of South Gladstone, offering good water views and high
quality dwellings in a modern estate.
30
with high underlying land values.
Houses in the $1 million plus category are thinly traded,
with most entrants into the sector tending to custom
build, rather than purchasing an established home. There
were only 28 house sales in Cairns priced at $1 million or
more during 2008, and this reduced to approximately 15
sales during 2009. Though hard to quantify due to the low
number of sales, prices for prestige houses have reduced
over the last 12-18 months in line with the general Cairns
market movement.
The Cairns prestige apartment sector consists of a
number of penthouse units in recent developments in
the CBD, Palm Cove and Trinity Beach. There have been
18 reported sales of $1 million plus apartments in Cairns
since the start of 2008, of which 14 have been developer
sales, and the remainder resales.
An example of a recent sale is a modern high quality 13th
floor four-bedroom, three-bathroom penthouse unit in
the Cairns CBD with 233sqm of living area and 89sqm of
balconies, which sold in December 2009 for $1.7 million.
The property had been previously purchased at the
height of the market in April 2007 for $2.4 million.
Around the Cairns region there are small pockets of
prestige housing located in Port Douglas, especially on
Wharf St/Flagstaff Hill, and some in Mission Beach.

In most cases a property will display two of the following

attributes in a prestige property in Gladstone: large, new
high quality dwelling, situated in a rare location or in a
prime position in a new estate and offers a view over a
rural setting or has water views.

Properties which have views that avoid the overwhelming

presence of an industrial development in Gladstone
would offer something valuable. Furthermore, beachfront
properties in Tannum Sands and Boyne Island offer a
valuable feature.
The month in review
Townsville
Stability and confidence are the buzzwords for the
residential market in 2010.
The median house price in Townsville plateaued
throughout much of 2008 and the first part of 2009, as a
result of stronger market activity within the lower end of
the market.
During the later part of 2009 however, the median house
priced started to rise, surpassing the previous peak of
$373,000 in November 2007, to record a new record high
of $376,000.
This increase in median sale price has been compositionally
driven, with more activity in the mid to upper end of the
market bringing up the average. The prestige market
entry point is around the $550,000 mark and, as can be
seen from the graph below, the volume of sales in this
price bracket has increased throughout 2009.
There are two tiers of prestige property within the
Townsville residential market - those priced between
$550,000 and $750,000, representing the executive
suburban homes, and those priced over $750,000,
representing the premium prestige lake/river front
properties up to the cream of the crop, being the inner
city product offering elevated views.
This higher-end prestige market represents a relatively
thin sector, with the current level of supply and demand
in equilibrium somewhat. It is very much an emotional
market, with purchasers willing to shop around for the
best fit product. The main attributes of the cream of the
crop residential houses in Townsville are location, size of
house and views offered.
Value levels in this market have softened from the highs
of 2007, with bargains available for the cashed-up buyer.
Tasmania
HOBART
The prestige market in Hobart is a relatively small..
31 RESIDENTIAL
Since the Global Financial Crisis (GFC) hit the prestige
residential market has been extremely slow, with agents
reporting tough times. Many properties that were
transacted in the past couple of years saw a reduction in
value and extended selling periods were commonplace.
However, agents are now reporting that there is more
interest in the top end of the market.
The prestige market in Hobart is considered to be for
properties priced over $1 million. However, it could be
argued that there are prestige properties in the fringe
locations priced over $850,000. The suburbs considered
to house most of this price bracket are Battery Point,
Sandy Bay and the Hobart CBD. Suburbs surrounding
the CBD - such as Glebe, North Hobart, West Hobart and
South Hobart - all house prestige properties, particularly
those which display heritage or character qualities.
There are also pockets of prestige property located on the
eastern shore of Hobart, namely along Victoria Esplanade
at Bellerive. These properties enjoy esplanade frontage
and generally uninterrupted views over the Derwent
River.
...many of the properties that were
transacted in the past couple of years saw
a reduction in value and extended selling
periods were common place ....
The market is on a slow recovery. Auction clearance rates
are only 40% in Hobart at present. Since the GFC, there
has been perceived bargain hunting within the top-end
property market. Many people have been forced to sell
their higher-end stock for whatever they could get. There
have been a few examples within the above listed suburbs
where a house has been bought for around $1 million in
2007 only to hit the market and sell for 10% less in 2009.
However, agents are now reporting that there is definite
interest in the prestige market, with one inner city agent
having three properties go to contract in the past two
weeks for more $1 million each. These properties have all
been on the market for in excess of six months.
The month in review
With more confidence back in the market and improved
consumer sentiment, those fortunate enough to be able
to purchase in this price category are returning to look for
opportunities that may exist. Buyers aren’t rushing in, but
there are definite signs that the market is on the recovery
and improve.
LAUNCESTON
Launceston’s premium market kicks in at about $600,000,
with 25 sales at or above this level in 2009..
Through the financial crisis of 2009 our market withstood
many of the pricing shocks experienced elsewhere in the
country. We had two sales above the magic $1 million
level, compared to four during 2008. The top price
achieved was $1.38 million for a multi-level 1880 home
on a 1440sqm site in York Street. In 2008 the top price was
$1.35 million for a 1900 centrally located dwelling on a
1209sqm site in Lord Street. Interestingly, there were eight
sales above $800,000 in 2009, compared to nine during
2008; a reflection on the stable nature of the market.
At present we have around 20 properties on the market
above $800,000 of which 13 are priced at $1 million or
above. These figures exclude the 14 apartments available
within the old hospital building redevelopment which
is currently nearing completion. This complex has an
apartment available for $3.5 million which, if achieved,
would certainly set a benchmark for the city.
During 2009 we saw completion of some prestige
quality dwellings. Of particular interest was a substantial
horseshoe-shaped home built around a courtyard and
swimming pool with river views at Dilston. Building costs
for these better quality prestige homes can approach
$3,500 per sqm.
Moving forward through 2010, once the election is out
of the way in March, we are expecting a steady as it goes
market, with no great surprises on the up or down sides.
Darwin
Defining prestige property in a maturing market such as
Darwin is difficult, due to upwardly shifting parameters in
acceptable price ranges and the differing life cycle stages
of prestige locations. Local prestige market benchmarks,
such as $1 million for detached dwellings, have
experienced a significant reduction in purchasing power
in some modern and developing locations. However,
a rough guideline for Darwin prestige property could
still be considered around $1-3.5 million for detached
dwellings and around $800,000-$2 million for the unit
market.
...the outer rural residential prestige market
continues to be bolstered...
Whilst the economic downturn has undoubtedly
impacted on large sectors of the prestige property market
in the eastern states, any slowdown in detached prestige
properties in Darwin has been negligible. However, sales
growth of inner-city prestige units does appear to have
slowed in Darwin.
Recent inner-city prestige developments have
experienced lower rates of off-the-plan sales, resulting in a
large amount of completed top-end stock on the market.
Whilst there is insufficient evidence to suggest that this
increased level of stock has adversely impacted on sale
prices, there has been comparatively stagnant growth and
increasingly volatile sale prices achieved. The inclusion of
‘cash back’ deals on some prestige units have recently
begun to emerge, indicating developer frustration at
32 RESIDENTIAL
stagnant values and prohibiting transparency in sale
prices. Both of these factors serve to distort the market,
making it more difficult to interpret. This represents a risk
for investors, due to potentially distorted/inflated sales
figures on some prestige units used as a sales tool by
vendors. Furthermore, the amount of remaining prestige
unit stock in the market will prevent any significant
growth in this sector in the short to medium term.
Reasonable demand for mid-range units (considered
mid-$500,000-$800,000) has continued, although some
of the new stock provided has been reconfigured into
one- and two-bedroom units. This may indicate an
effort to differentiate from the existing stock of prestige
priced three-bedroom units, but mainly to address the
affordability factor for Darwin’s young ‘professional couple’
demographic. The sustained demand for new stock in
this configuration and price range can be exhibited by
the successful presale campaign in The Avenue complex
(the second stage of the original Hastings Over Mindil
development in Parap).
The market for detached prestige properties continues to
experience growth in both the established and developing
prestige suburbs. Demand for the inner prestige suburbs
of Cullen Bay, Larrakeyah, Fannie Bay and the seaside
suburb of Nightcliff remains strong, driven by lack of
availability and comparatively large allotments. Similarly,
the tightly held rural residential prestige suburb of
Knuckeys Lagoon, which offers large allotments (typically
two hectares plus) and dwellings to match, appears to
have weathered any potential downturn.
The outer rural residential prestige market continues to
be bolstered by rising values in surrounding mid-range
suburb land prices, notably subdivisions in Herbert
and Humpty Doo. New transport infrastructure and the
Coolalinga shopping centre development are expected to
underpin growth in established prestige rural residential
property prices around the Howard Springs area in the
short to medium term. Meanwhile, several large parcels
of outer rural land are set to be auctioned off, due to non-
payment of rates amid ownership confusion stretching
back over the last century. Whilst certainly not prestige
The month in review
land, it does represent a unique opportunity for owner-
occupiers and budding developers alike, with sites
ranging from 4000sqm to 129 hectares.
The developing northern suburb of Lyons has continued
to experience growth, with a noticeable increase in the
number of sales nudging close to, or achieving, the $1
million mark. There have been three settled sales above
$1 million and a further three in the $900,000-$1 million
range since June 2009. The masterplan suburb of Lyons is a
good example of the Darwin market maturing. Properties
achieving the $1 million mark prior to 2007 were generally
characterised by unimpeded water views, stellar location
and/or exceptional design features. The suburb of Lyons
has neither of the former two components, however,
due to increasing costs of construction, diminishing land
stock within Lyons, strict building covenants (such as
green rating requirements) and the size of dwellings, the
standard cost of house plus land within this subdivision
is rapidly approaching the prestige benchmark. The
question is, does this transform Lyons into a prestige
suburb, or indicate the market’s acceptance of a new
price point for recently released metropolitan masterplan
stock?
Meanwhile, the modern prestige waterside suburb of
Bayview has maintained consistent growth as it becomes
more established, through less building sites and more
maturing trees and gardens, and actively competes with
the old money suburbs of Larrakeyah and Fannie Bay for
high sales. There were seven settled sales of $1 million or
over in Bayview during the second half of last year alone.
Despite the continued growth of the prestige market
sector, the middle market is still considered the sector
capable of maximum pound-for-pound sustainable
growth. Darwin did not appear to experience any
tangible value depression in the prestige market during
the recent economic turmoil. However, investment in
the prestige unit market is currently considered to offer
insufficient opportunity for capital appreciation relative
to its current risk profile, linked to a potential oversupply
situation. Whilst the detached dwelling prestige market
is indicating continued steady growth, it seems unlikely
that participants across Darwin’s prestige sector will be
able to realise the elevated short-term gains potentially
available on recovering interstate property in the face of
renewed financial confidence.
Perth
The Perth premium property market can be summed up
pretty easily at the moment. For $57.5 million you could
have purchased a riverfront mansion on 8700sqm of
prime land in Mosman Park. Unfortunately for those with
a larger cheque book than most, the property has been
snapped up by a Western Australian mining magnate. If
the price seems exorbitant, keep in mind that the land
alone probably made up most of the purchase price, let
alone the three dwellings, tennis courts, cinema, jetty etc
that sweetened the deal.
The sale of Angela Bennett’s mansion was an injection
of adrenalin to the WA property market and created a
sense of confidence in the battered premium sector. An
example is 18a Fraser Road in the riverside suburb of
Applecross, which sold for more than $7 million within
the first weeks of marketing.
These sales tell an interesting tale, although Perth’s
premium property market is generally more affordable,
with prices generally starting at $1.5-$2 million and
stretching along the coastline from Coogee to Mindarie
and around the banks of the Swan River.
RESIDENTIAL
Whilst the media is happy to broadcast that Perth’s median
house price is back at peak levels, this has largely been
caused by trade-up buyers in the $600,000-$1.5million
range and a decrease in first home buyer activity. Generally
speaking, values in the premium property market remain
33
below peak levels.
...the sale of Angela Bennett’s mansion was
an injection of adrenalin to the WA property
market....
Sales activity has increased in most of the traditional blue
chip suburbs such as Cottesloe, City Beach, South Perth
and Applecross, although stock levels remain reasonable
through Dalkeith and Claremont.
It seems that many opportunities remain for the astute
buyer, whether it be targeting properties that have
been advertised for extended periods and are now over
exposed, or accepting that auctions are a way of life and
being bold enough to bid.
Buyer sentiment is extremely varied – either the next
boom is imminent or the real GFC is about to happen.
Predicting market movement in the next few months
is tricky, to say the least. The majority of buyers remain
cautiously optimistic, and, hopefully, fortune favours
the brave. And let’s not forget, little old Perth has now
achieved the highest residential sale in Australia, and yet
a larger, more ostentatious dwelling is currently under
construction and the cost alone easily surpasses this
record sale.
South Western WA
“They’re back” is the comment that springs to mind when
we look at the top end of the market in the South West.
From one end of the region to the other, these most
desirable of properties have dragged themselves out of
the sales doldrums, where they resided since the GFC
crashed in on the margin call set.
The month in review

One point of note is that the region offers very different

price points in what is considered prestige. If we look
at Bunbury, where a solid 1980’s (if somewhat dated)
dwelling offering 180 degree ocean views sold recently
for $800,000, we can see that any property over $1 million
is top draw material. When we compare that to Eagle
Bay, near Dunsborough, where properties reaching $5
million dollars are not considered extraordinary, then the
extremes become obvious.

Agents are reporting prestige property sales in all these

localities, which wasn’t the case up until six months ago.

RESIDENTIAL
The majority of sales prior to that time resulted from
financial distress, and at almost (relatively) giveaway
prices. Prices had fallen by 30 to 40%.

Currently, we are seeing properties being sold after having

been on the market for 18 months to two years (due to

34
the vendor not being prepared to drop their price). These
properties are selling at prices similar to the levels seen
just prior to the GFC. Evidence suggests that there hasn’t
been movement past those levels, but the market has
recovered the lost ground. Vendors are also returning to
the market after holding off listing during the slump.

One marketing point built into an upmarket beachside

holiday rental property, was the inclusion of two master
suites. The theory was that these types of properties were
often hired by two families to defray costs, but one couple
always got the worse bedroom, so the solution was two
equivalent master suites. That way at least Mum and Dad
are happy and the kids can fight it out from there.

All in all, the market for prestige properties could be

described as balanced, with the traditional blue ribbon
suburbs remaining in favour and experiencing steady
numbers of sales at reasonable prices. In reality, a balanced
market is a description that could be applied right across
the spectrum. The middle market is dominated by clients
moving up the scale and the bottom of the market is now
supported by investors, while the first home buyers are
less active since the reduction of the government boost.

In our opinion, having this balanced market can only be a

good position for the industry, and long may it continue.
The month in review

Contacts
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CONTACTS
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35
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The month in review
Rural – Market Directions
February is a fun month for the Herron Todd White Rural
team: breakfasts with like-minded industry members in
Brisbane (24th), Sydney (25th) and our inaugural breakfast
in Melbourne on the 26th. For those of you who could not
attend this year we look forward to working together and
keeping in touch ready for next year.
This month’s input from across the country provides a
broad range of interesting reading. It certainly is good
news to hear that areas of south-eastern New South
Wales and north-eastern Victoria have received some rain
and life is moving on again. David Shuter’s (Albury) input
this month addresses the theme of the impact on climate
change on property markets. David does mention the
talk of southerners wondering if they should be moving
north. From up here in North Queensland, David we thank
you for your marketing!!
This month Peter Lee-Steere (Bunbury) seeks to provide
an overview of the various agricultural land uses and
markets of Western Australia. Peter mentions that on
some agricultural land close to urban areas, orchards and
vineyards are being removed as the purchasers view them
as impediments! This certainly raises questions as to the
availability of supply of fresh fruit to the state markets.
The Central Queensland input from Will McLay reports
that store cattle markets have lifted on the back of the
positive start to the season. Will also reports the sale of
‘Wilford’ to the west of Emerald.
In North Queensland the emergence of competition for
cattle for the live export market against local processors
is looking to set the scene for stronger cattle prices than
experienced in the past 12 months. Ideally a strengthening
in the cattle market may lead to an increase in property
sale volumes and values.
Roger Hill Ph: (07) 4724 2000
1 March 2010
RURAL
36
CENTRAL NORTH & WEST NSW
WESTERN PLAINS DUBBO
The major force in the marketplace at present is the level
of funding and the difficulty in gaining funding, with
serviceability becoming a higher priority than loan value
ratios. Purchasers have agreed to a particular price only
to have finance unavailable or not approved.
Irrigation water in the Macquarie and Lachlan Valley would
be considered in a state of flux, with the government
officially able to still purchase water to lower the pressure
on the Murray-Darling Basin, however it would appear
that there is little to no purchasing taking place at
present. Government purchasing in the water market
has put a floor across most valleys, most noticeably the
Macquarie and Lachlan Valleys. Without this government
intervention markets would be set by other growers and
investors. Should the current situation continue, some
softening of values in both the Macquarie and Lachlan
River systems is expected.
Should the Government retire from the market,
Macquarie water values would be in the vicinity of $1,000
per megalitre, rather than $1,200-1,250. Without the
Givernment purchasing, Lachlan River water would be
approximately $500 per megalitre, rather than the current
$600-700 per megalitre.
New benchmark value levels are expected to be set for
dryland cultivation in the Walgett District this year, with
values of $1,980 per ha ($800 per acre).
CENTRAL TABLELANDS ORANGE/MUDGEE/
BATHURST
Recent widespread rain has significantly improved the
rural outlook over the past six weeks. The majority of the
tablelands is experiencing its best season for a number
of years with a full soil moisture profile. The ground is
becoming wet, allowing for run off into catchment dams.
The month in review
Sales volumes remain low and demand is limited.
Long-term positive seasonal conditions will need to be
experienced before this translates in value increases.
GOONDIWINDI
Recent trips to the west have revealed a hidden oasis. Buffel
is nearly shoulder height, rivers flowing, crops busting out
of the ground and bugs hitting the windscreen, which is
hard to believe after such a dry spell. There are areas that
still missed out, however, confidence is up in the main.
There are a few transactions in the process of being
exchanged and the market is starting to move. It is still
only a fraction of what was occurring in the mid 2000s.
Values have held reasonably well for good quality
properties, however they have not gone unscathed, with
some evidence of softening values.
...the structural force is primarily the need
to feed people, livestock and provide
energy....
Without doubt, one of the largest issues we will be facing
over the next 10-15 years will be succession planning.
Corporate agriculture in the last few years has seen a
surge of interest, and this is attributed to the belief that
the fundamentals in agriculture are sound. Deutsche
Bank recently released a report (December 2009) in
which it discusses the belief that the structural forces that
drove prices higher in 2007-2008 are still in place, though
temporarily overwhelmed by the GFC and a world record
harvest. The structural force is primarily the need to
feed people, livestock and provide energy, for example
biofeuls. We have also supported this view as while the
traditional demand on agriculture has been food and
fibre, energy has been added to the demand equation.
Deutsche Bank outline “Ten Reasons To Go Long
Agriculture”, these are:
1. Population growth;
2. Income growth;
3. Land and water constraints;
4. Climate change;
5. Concentration of agricultural exports;
6. Biofuels;
7. Valuation (of agricultural commodities relative to hard
commodities);
8. Inventories;
9. Diversification;
10. Government action and stockpiling.
The agricultural industry has been meeting the challenge
of feeding the world for decades, despite soothsayers
predicting that it would be not able to for much longer
because its ability to increase productivity must reach
its limits and famines around the world occur as a result
of food shortages. Going forward, the ability agriculture
has shown to increase productivity is likely to be less
favourable as a consequence of a combination of some
of the above points. The main drivers to demand is not
likely to be population growth, but the change on food
consumption habits as a result of income growth in the
economic growth centres of countries such as China and
India. As average household income increases, it has been
shown that subsistence diets based on grains, substitutes
this for higher protein such as various meat sources. This
places more pressure on agriculture to meet demand, as
the conversion ratio of grain to meat can vary from 2-7kg
of grain for 1kg of meat.
There are a growing number of nations around the
world that cannot meet the food requirements for their
populations. Many of these sovereign entities are taking
the opportunity to strategically invest in agricultural
assets to help ensure that they have the ability to meet
RURAL
the demand for food in their own countries.
The constraints on land and water are physical resource
based. There is less land and with climate change, many
37
nations have placed restrictions on land use change -
our own government included. In the past, as it became
viable to develop land for agriculture this was one of the
main options. Water shortages are being experienced all
around the world and in our major irrigation and water
use area, the Murray Darling Basin, we have seen the
evidence of over allocation and the demand for water
exceeding the sustainable level of resource extractions.
Government reform has seen the volume of water
available for consumptive use decline as the needs of
the environment are allowed for. Water has been given a
value and in this, is the tool for which water use efficiency
options can be priced against for assessing the feasibility
of such work.
Global stocks to use ratios are still at relatively low levels
and below historical averages. This is despite the world
record harvest experienced in 2009. Many poorer nations
are battling the food shortages and price spikes and the
affordability of the food for their least well off. The GFC,
the record harvest, and the improved affordability in food
is likely to be highly volatile as normal seasons produce
normal size crops and consumption exceeds production.
The outlook for farm commodity prices in the short term
is generally soft, however price outlooks from late 2010
into 2011 should strengthen on the back of increased
demand and lower stock levels. Despite the change in the
structural price forces, there is likely to be high volatility in
markets with more extreme highs and lows. Overall, the
consensus is for higher average agricultural commodity
prices going forward.
The market for irrigated farms has been supported mostly
by new investment, predominantly from the institutional
sector. There have been a few new private investors,
however without these new investors the market may well
have been very badly affected. There have been very few
The month in review
sales in the past 12 months, with the PrimeAg acquisition
at Emerald being the only notable sale in 2009. This can
be attributed to the poor water availability across most
irrigation regions in eastern Australia and the subsequent
lack of marketing as potential sellers await better selling
conditions.
The very public sale process of the Cubbie Group, which
has not yet resulted in a sale, has brought a lot of attention
to this segment, however many of these potential buyers
are only looking to pick up a bargain from the sale of a
distressed asset. There are some who are looking to
genuinely buy good quality assets, who have a good
track history and potential to perform. These are also
likely to be around for the longer term. They do, however,
also have a lot of options to consider as there are a lot
of irrigation properties presently on the market that were
not available 3-5 years ago. This has resulted mainly from
the decision of many operators to retire from the industry
and succession planning issues make it easier to sell,
than to hold and distribute between interested family
members.
2010 should turn out to be an interesting year, whatever
happens.
Contact:
Robin Gardiner Ph: (02) 6766 9898
SOUTHERN NSW
ALBURY
Most areas of southern NSW and north-eastern Victoria
have been experiencing typical summer weather
patterns, with some areas experiencing summer storms
which bring their own problems such as lightening
strikes, and long periods of fairly hot weather. Some areas
have received drenching rains of over 100mm, and other
areas have experienced minimal rain. In this area there
is typically an autumn break in mid to late March, and it
is predominately an autumn/winter/spring rainfall area.
Receiving the autumn break too early in the year can
cause its own problems, such as weed infestations and
stock health problems, and without the follow-up rain
there can be pasture and crop striking then dying due to
lack of moisture. That may then involve re-sowing crops
or pasture a second time.
The areas affected by fires to the north and north-east of
Albury have received good rainfalls, and are now on the
road to recovery. Extensive fencing has been replaced,
sheds and houses are being built/rebuilt, and it is starting
to green up a bit. There has been enough rain to at least
crust the soil to stop topsoil blowing away quite as easily.
Now to turn to the topic of climate change. In southern
NSW and north-eastern Victoria perceptions and
thoughts concerning climate change and its affects on
the rural property sector are very mixed. No doubt this
is the case in most areas; we have both extremes, where
some are in total denial, to the other extreme where some
feel residents are all doomed and should be moving to
northern Australia to grow food and fibre. However, there
is certainly growing acceptance that climate change is
happening. People are starting to consider their futures
in this area, and they are starting to think about some
long-term alternatives. General feedback from real estate
agents is that many potential buyers are thinking and
talking about climate change, and trying to find out as
RURAL
much as they can so that they purchase in areas that are
likely to be positively affected by climate change.
This is particularly so in irrigated areas where there have
38
been zero or very low general security water allocations.
Without irrigation water being available farmers are
struggling to make ends meet and, in many cases, they
have been saved from the clutches of their lenders by
selling their water to the Government or non-rural water
investment companies. Many irrigation farmers who have
not received water for three or four years, or received
very little water, are starting to accept that low water
allocations may be the norm and not the exception, and
that they may not have a future on a farm where the
viability of that farm is reliant on reasonably high annual
water allocations being available.
...non-land owning investment companies
are now investing in water....
It is interesting to note, at this stage at least, that all these
thoughts have not had any perceptible negative impact
on rural property values. Property values have been
flatlining in most non-irrigation areas, and there are still
properties selling at prices that were being achieved in
the heady days of 2006/2007. In irrigation areas, when
water is sold separately from the land, the addition of the
two components shows reasonably steady values. There
are some exceptions of course, and there are very few
irrigation properties selling due to very weak demand in
some areas.
Water values have also been steady, and are underpinned
by the Government buyback of water. Prior to the
Government buyback commencing, annual water sales
were around $100 million. If the Government is to adhere
to its target, it needs to buy $300 million of water per
annum - all without affecting prices. Is it possible to treble
the demand for anything without seeing significant price
hikes? In addition, non-land owning water investment
companies are now investing in water, with one
investment company already holding well in excess of
$100 million of mainly high security water assets in the
Murray Darling basin.
These water assets are generally sold on an annual basis
and the investments are showing good returns. It is likely
that with the Government buyback and other non-land
owning investment companies entering the market, that
prices will increase for water - particularly high security
water - in the short to medium term. Prices will also
depend on the retention, or otherwise, of the water cap,
which prevents large amounts of water being removed
The month in review
from irrigation areas.
General acceptance of climate change - even by many
skeptics - has been gradual and painful. People are talking
a lot about the extremes in southern NSW. January 2009
was on average the hottest on record and January 2010
was on average hotter than January 2009, so set a new
record. Is this going to continue each year? There have
been many localised violent wind storms that have
caused a lot of damage, and it appears the areas is having
more days and longer periods of temperatures above 40
degrees.Above all, there has been well below average
rainfall in most areas of southern NSW and north-eastern
Victoria for the past nine years. This factor above all else
is adding weight to the climate change believers - or is it
just another 50-year weather cycle?
Only time will tell!
WAGGA WAGGA
The area surrounding Wagga Wagga has received a good
amount of rain over the past few weeks, which has lifted
the spirits around the area. The amount of rain received
has helped both grazing and cropping farmers. Some
cropping farmers are getting ready to sow early crops
on the back of the rain, while the rain has helped grazing
farmers replenish some water levels and help to get some
summer feed. The rural property market has remained
quiet, with few transactions, though when transactions
do occur the prices paid can still be surprisingly good,
which shows that in some areas the market is holding
firm.
LEETON
There is very little happening in the rural property market
throughout the region at present. Rainfall ranging from
20-200mm has fallen in parts during February, scattered
across the area. This rain has done little to buoy the
flagging rural market. Listings continue to increase with
little buyer interest. Unfortunately this will continue to be
the state of play in the short to medium term, with many
producers currently in the process of refinancing for the
upcoming winter season.
Contact:
David Shuter Ph: (02) 6041 1333
Regional Vic
MURRAY RIVERINA
The rising market through 2002 and 2009 has been very
unusual given the poor seasonal conditions, especially
over the past four years.
SEASON ALLOCATION
2002/2003 8%
2003/2004 45%
2004/2005 42%
2005/2006 56%
2006/2007 0%
2007/2008 0%
2008/2009 9%
2009/2010 23%
* Allocations for the Murray Irrigation Limited district in
the southern Riverina district of south-west New South
Wales.
RURAL
The volume of sales has declined significantly, but typically
those sales that have occurred are at pre-drought levels of
value. Strong grain prices over recent years have seen the
demand for farmland remain reasonable. However, grain
39
prices declined significantly for 2009 and, combined with
a fourth drought in a row, there could well be a downward
correction in the near future.
...more and more properties are being sold
this way....
To a large degree, the value of farms in the area has been
propped up by the Federal/State Government water
buybacks and the Federal Government interest rate
subsidies.
A recent phenomenon in the market has been irrigation
holdings sold “dry”. More and more properties are being
sold this way, especially with the zero allocations, and
purchasers with little chance of generating any income
from the “water” component of the property. Thus, by
splitting the water from the property, vendors can quite
often achieve a superior sale price compared to selling as
an irrigation holding.
Agents are reporting very little enquiry from buyers, but
are fielding a large volume of calls from sellers.
Contact:
John Henderson Ph: (03) 5881 4947
MILDURA/SUNRAYSIA
Table grape growers in the Mildura area were counting
their blessings in recent weeks when heavy rainfall
virtually by passed the area by and has left the fruit
unscathed. Picking continues with the premium variety of
Crimson Seedless now being harvested, with reasonable
yields reported and good prices achieved.
Following the detection of a female fruit fly in early January
The month in review
in Mildura, a second male fly was recently discovered. This
has led the Australian Quarantine Authority to extend
the restrictions on the movement of fruit from within
the exclusion zone for a further seven weeks, which,
while not preventing sale of fruit, does require cold
disinfestation treatment prior to export of table grapes to
some countries and added paperwork.
There remains little joy in the wine grape industry. This
year it is expected that production in the Sunraysia area
will be well below 300,000 tonnes, which will be lowest
harvest since 1999, and well down on the peak in 2005 of
442,000 tonnes. Chardonnay yields have been down by
approximately 33%, and similar poor yields are expected
from the harvest of other varieties. The poor yields are
at least partly attributable to reduced inputs by most
growers in response to the current depressed prices.
Following on from this is the report that in excess of
10,000 megalitres of irrigation water has been traded out
of the district in the past 12 months, as growers seek to
reduce debt levels. It is very evident when you fly into
or drive around the Mildura area, that a large number of
irrigation properties - mostly wine grape holdings - have
been abandoned.
Another casualty of the wine industry slump is the recent
advertising for sale of the historic Chateau Mildura
Winery. The winery has undergone significant restoration
and upgrading in recent years, however the costs of this
upgrade, coupled with the significant downturn in the
industry, forced the current owners to sell up. History
records that William and Benjamin Chaffey established
the winery after an invitation to come to Australia by
Alfred Deakin to set up the irrigation colonies of Mildura
and Renmark. This 122-year-old Chaffey winery is one
of only five Victorian wineries that have more than 100
years of continuous production, and it is hopeful that it
will remain in local ownership.
On a more positive note was the announcement in early
February of Silex Systems Ltd purchasing Solar Systems,
which went into receivership, with Silex indicating it will
continue with construction of Australia’s largest solar
power station just south of Mildura in a $429 million
project. The project has State and Federal Government
backing and, when completed, will produce enough
power for 45,000 homes. Silex aim to launch a pilot plant
in 2011 as a pre-curser to the full-scale operations a year
or two later.
A review of the annual report of Select Harvests Limited
reveals its intention to purchase a large almond orchard
at Lake Powell, 15kms south east of Robinvale, for $25
million. The property is planted with 650ha of 4-6 year-old
almonds and also includes a 6,622 megalitre water share
(10.19Mgl/ha). This equates to an overall $38,460 per ha,
including the benefit of the balance land and structures.
It appears a good deal to Select Harvests, as it has
developed and subsequently managed the property on
behalf of the vendor and will now purchase a productive
property at a favourable price.
Harvesting of almonds in the area has commenced and is
tipped to be a significant improvement on last year. The
Almond Board of Australia has forecast a 25% increase in
production for 2010, with an expected 46,100 tonnes of
almonds produced. It is also interesting to note that less
than 20% of all Australian almond plantings have reached
RURAL
full maturity, with 70% of the trees planted since 2004. It
is forecast that Australia will surpass Spain as the number
two producing country by 2015.
40
The dryland/grazing sector has seen little activity,
excepting the sale of the Western Division pastoral
holding of the 18,265ha Warwick Station for $1.04 million.
The station can be considered remote at 140 kms north
west of Mildura, does not have rural power and has only
modest improvements. The sale shows an improved
sheep area value of approximately $200 per DSE.
The prime lamb market has started the year well, with
record prices achieved at the past two recent Ouyen lamb
markets. Values topped $166 per lamb at the latest sale.
Also boosting this sector is the jump in cattle prices and
the 10% spike in the wool market, with the AWEX Eastern
Market Indicator is now well above 900c/kg clean.
Much of the Western Division of NSW has enjoyed well
above average rainfall in the past two months and,
combined with improving commodity prices, this should
contribute to greater confidence levels.
Contact:
Shane Noonan Ph: (03) 5021 0455
FAR NORTH QLD
Banana prices continue to be volatile making specialist
marketing and supply agreements, market timing and
farm location increasingly important in securing profitable
market prices. Growers are increasingly trying to outdo
each other and looking for that marketing edge which
will attract premium prices for their fruit. Consumers
continue to demand high quality blemish-free fruit and
those growers who can provide that are reaping the
rewards. Although average prices are reasonably low,
market range is wide, reflecting the premium for quality
fruit.
...cyclical downturns in prices and returns
from overproduction are frequent...
A recent financial analysis of a Cassowary Coast farm
revealed a net income of over $15,000 per hectare for
the six-month period from July to December 2009. This
farm was situated near the coast in a reasonably elevated
location and did not experience cold weather, allowing
The month in review

the bananas to maintain a deep yellow to golden skin
colour which is in demand from banana agents and
consumers alike, giving it the ability to attract a premium
price.
A recent purchase of a $2 million riverfront grazing
farm near Innisfail for conversion for bananas is seen as
a vote of confidence in the industry, particularly as the
buyer was a high-profile banana agent with many farms
and packing facilities in the north. This purchase would
tend to indicate that the threat of imports during 2009
seems to have subsided, with growers more confident
in Biosecurity Australia enforcing strict quarantine
measures.
in early 2007 as post-cyclone banana plantings hit the
market,
• A bounce-back of prices to over $50 per carton in July
2007 as production levels abated from their initial
post-cyclone concentration, and
• Subsequent reversion to a typical average price of $15-
20 per carton during the period from October 2007 to
the present, though with higher than normal variability
over the last 18 months.

RURAL
The following is a summary of market trends and costs in
recent years and again confirms the need to be one of the
producers that can attract a premium over the average

41
market.

The production costs for Cavendish bananas under

normal conditions in north Queensland are typically
estimated at about $17 per 13kg carton, consisting of Contact:
about $11 per carton in on-farm costs and $6 per carton
for transport, ripening and marketing. These amounts Danny Glasson Ph: (07) 4057 0200
include all variable costs of production relating to growing
and marketing costs and outside labour. The total cost of
production inclusive of fixed costs such as equipment,
interest and grower labour will be higher again.

Prices for Cavendish bananas vary widely in any one year,

and from year to year because of variations in the supply
volume. Cyclical downturns in prices and returns from
overproduction are frequent. For this reason the year-to-
year profitability of banana growing is extremely variable.
In any one year, there can be extended periods when the
returns do not cover the cost of production, and other
times when the price may be returning high levels of
profit.
...prices for Cavendish bananas vary widely
in any one year....
The average weekly volume of north Queensland bananas
consigned to southern markets per month from October
2005 through to the present. Consignments over the last
two years have averaged just under 400,000 cartons per
week, similar to the levels that existed immediately prior
to the cyclone in 2006.
Wholesale market prices received for Cavendish bananas
per 13kg carton are charted above in Figure 1. Price
history over the period is exemplified by the Brisbane
market averages which showed:
• Average prices mostly in the $12-16 range per carton
from January 2004 through to July 2005.
• An upwards burst in prices from August to October
2005, during which average prices touched $25 a
carton,
• A reversion of prices to the $10-14 range from
November 2005 to March 2006,
• The start of a dramatic price increase following the
cyclone, with the Brisbane market average price
reaching almost $140 per carton in July 2006,
• A reversion of prices to around the $20 per carton mark
NORTHERN QLD
In January 2010 North Queensland started with a very
patchy wet season. There have been some great rainfalls
this January and February. You don’t want to stand still
too long, the Buffel will grow up the leg of your jeans!
On a more serious note, the North Queensland property
market saw 169 sales since 2005. The market has
grown exponentially over that time The blue line is
an exponential overlay showing a factor of about 1.5
times including capex during that period. The purple
line shows that with the absence of the more expensive
Downs country type sales, the composition of the 2009
market saw lower land rates. This is purely compositional
as there was an absence of more expensive land types
transacting.
The sale volumes for 2009 saw the change in market
sentiment arise from a series of factors. Particular
sentiments were that stations were getting expensive
for their earnings profile, lower confidence existed in the
capital markets and the weaker cattle market in general.
There are some positive influences arising that may fuel
an increase in volumes - and maybe values - in the next
18 months to two years. The main one is an increased
demand factor from the live export industry in north
Queensland with record numbers of cattle being shipped
out of Townsville in 2009. This looks set to continue. A
major exporter has reportedly leased a site to erect a large
live export yard facility in Townsville. This commitment is
promising for creating competition through an increase
in livestock marketing options.
In the balance, if there was a North Queensland grazing
property clock, we consider the property cycle to be
The month in review
around the 6 o’clock mark - around the bottom. As the
anxiety reduces from a couple of anxious balance sheet
positions, we look forward to reporting the start of the
recovery phase.
Contact:
Roger Hill Ph: (07) 4724 2000
CENTRAL QLD
Good rains have been received across the area in the
start to 2010, particularly in the Central Highlands with
some areas recording falls of over 15 inches (375mm).
Rainfall closer to the coast has been as much as 25 inches
(500mm) around Yeppoon and northward. This recent
rain event should inspire some confidence back to the
market, with further predictions of rain in the short term.
Sentiment remains stable, however future direction will
be largely governed by the finance sector which may look
for opportunities to tidy up some aspects of its loan book.
In any case, the key fundamentals of seasonal conditions
and lending rates should provide the conditions for
competition, particularly against better quality blocks.
...listings have generally been scarce,
however this is likely to change...
Store cattle markets across the area have lifted,
underpinned by restockers running on the confidence
of the current seasonal situation after the heavy falls in
January and February.
Market activity starting the 2010 year has been sound
after several big sales in the Clermont and Dysart districts
at the conclusion of last year.
“Wilford”, located 90km west of Emerald, sold this month
at auction for $2.5 million to a north-western grazier.
The property comprises 2,587ha (6,392 acres) of mixed
brigalow scrub with forest influences. The sale reflects
realistic value for a grower block at around $960 per
hectare, or almost $400 per acre.
Listings have generally been scarce, however this is
likely to change as vendors take the opportunity to offer
property in a better then average season.
Contact:
Greg Williams Ph: (07) 4957 7348
Will McLay Ph: (07) 4927 4655
NORTHERN TERRITORY
The long awaited final report of the Northern Australia
Land and Water Taskforce has been released. It has been
widely reported that it found, as expected, northern
Australia will not become the world’s next great food
bowl. There are limited areas with suitable soil types, and
limited areas with adequate water resources; the areas of
intersection of these features is even smaller.
RURAL
But this does not mean that agriculture has no future
in the north. The report identifies that there are about
600 gigalitres of groundwater available across northern
42
Australia, which could increase the irrigable land area by
up to 40,000ha.
The report identifies, correctly we believe, that a “mosaic”
style of agriculture would represent the most appropriate
use of these resources, that is small scale and widely
distributed. Such opportunities exist across the region,
however, the Wiso/Georgina resource, extending from
Mataranka to Mt Isa, and the smaller Daly River area are
particularly noted in the report.
In addition, there is the option of surface water storage,
although this is constrained by the high seasonality of
rainfall, high evaporation, the unsuitability of the terrain,
costs of construction and current Government policy.
Nevertheless, projects such as Stage 2 in the Ord will
provide some scope for expansion of irrigated agriculture.
An additional 800ha of agricultural lots will be released in
2011.
Much will need to change to facilitate the development
of the mosaic-style agriculture envisaged by the report,
especially in the provision of necessary infrastructure and
suitable land tenure.
Of course, the real estate property markets will have a big
say in whether these projects will be feasible or whether
the status quo will be maintained. Demand for irrigatable
land is limited at present, however, on the positive side
there does not appear to have been any noticeable fall in
values. A good example is the Northern Territory cashew
farm which has fairly significant groundwater resources
but which remains unsold.
Contact:
Frank Peacocke Ph: (08) 8941 4833
South Western WA
Western Australia can be broadly divided into three
main agricultural areas, being the south-west, wheatbelt
and pastoral districts. With things being quiet on the
agricultural front in WA at present, we have provided a
very brief overview of the forces in the rural WA market
from the south west and wheatbelt. Future discussion will
follow on WA pastoral.
The month in review

South West Compared to other parts of Australia, WA’s wheatbelt

The south west of the state and along the coastal strip to
the north of Perth includes the more intensive agriculture
due to availability of water, higher annual rainfall and
conducive soil types.
The area has the most diversity seeing dairying, viticulture,
horticulture, plantation timber and forestry industries
established. As this area moves further from the coast but
still in relatively high rainfall districts, the well-established
industries include sheep breeding for fine wool, meat and
cattle grazing and cereal cropping. The area also includes
intensive piggeries and poultry farms as it is close to the
has a relatively uniform rainfall pattern and soil types,
with rainfall decreasing as you head further away from
the coast. Accordingly larger areas of land are needed
to generate returns, with the result that lower prices per
hectare are paid for larger tracts of inland properties than
for smaller coastal properties that can generate similar
returns. Due to the size of the overall land mass, a poor
season in the northern wheatbelt can often be offset by a
bumper season near the south east with the central and
western wheatbelt areas having greater consistency.
Property values are predominantly tied to the seasons and
a combination of low turnover of properties and lower

markets and labor supply.
Prevalent throughout this area is the lifestyle market, with
properties in some districts in excess of 300 hectares having
RURAL
rates per hectare are noted in regions having longer-
term below average seasons, compared to those having
seasonal fluctuations but longer-term consistency with
stable yields. A further factor in this market is economic

no apparent commercial viability being sold at consistent
prices and catering for this market. Reasons behind this
include the proximity to the Perth metropolitan area,
generally within three hours drive, and the amount of
industry also within a one-hour drive, involving local shift
or fly-in fly-out workers with rosters that give purchasers
the ability to commute only occasionally and have a long
period of time on their property between shifts.
43
viability with, it seems, ever increasing input costs not
being met with better returns, resulting in market activity
seeing a trend towards existing farmers purchasing
neighbouring properties to obtain better economies of
scale, or institutional investors purchasing properties to
diversify a property portfolio.
Contact:
Peter Lee-SteertPh: (08) 9791 6204

The result has seen little to no fluctuation in prevailing

values through the GFC. Although there has been a
reduced turnover of properties and longer sale periods,
values upon sale have been reasonably consistent for
some time. The downside from an agricultural point of
view is the prices paid for lifestyle exceed those a farmer
could pay and hope to generate a reasonable return from
working the land.

We have the situation where orchards and vineyards are

being removed as they are considered an impediment to
sale, so a vendor can attract a higher price or, alternatively,
advertise that the vendor will remove any orchard etc if
required. The longer-term impact on fruit and vegetable
supplies in the state is yet to be measured, however the
time cannot be far off when there will be a noticeable
reduction in supply with corresponding increased costs
at a retail level. This could have a cyclical effect, making
such land viable again or the state will have to rely more
on imports from new areas such as the Ord River.

Wheatbelt

From Ajana, north of Geraldton and about 500km north

of Perth, diagonally to Condingup, east of Esperance
and about 850km south east of Perth, is the wheatbelt,
comprising more traditional agriculture of mixed grazing
and cereal cropping.
The month in review

Comparative Property Market Indicators - March 2010

The following pages present a generalised overview of the state of property markets in Capital City, New South
Wales/ACT, Victoria/Tasmania, Queensland, South Australia/Northern Territory/Western Australia & MENA
locations using financing risk-rating scales. They are not a guide to individual property assessments.

For further information contact Rick Carr, Research Director, Herron Todd White, on (07) 4057 0200, or by email on

MARKET INDICATORS
rick.carr@htw.com.au

Comparative Analysis of Capital City Property Markets

To discuss the applicability of the Capital City indicators to individual

properties or situations, contact your local Herron Todd White office:

Sydney (02) 9221 8911

Melbourne (03) 9642 2000
Brisbane Commercial (07) 3002 0900

44
Brisbane Residential (07) 3353 7500
Adelaide (08) 8231 6818
Perth (08) 9388 9288
Hobart (03) 6244 6795
Darwin (08) 8941 4833
Canberra (02) 6273 9888

Comparative Analysis of New South Wales/ACT Property Markets

To discuss the applicability of the NSW/ACT indicators to individual proper-
ties or situations, contact your local Herron Todd White office:

Albury (02) 6041 1333

Bathurst (02) 6334 4650
Canberra/Queanbeyan (02) 6273 9888
Dubbo (02) 6884 2999
Gosford 1300 489 825
Griffith (02) 6964 4222
Leeton (02) 6953 8007
Mudgee (02) 6372 7733
Newcastle/Central Coast (02) 4929 3800
Norwest (02) 8882 7100
Sydney (02) 9221 8911
Port Macquarie 1300 489 825
Tamworth (02) 6766 9898
Tweed Coast (02) 5523 2211
Wagga Wagga (02) 6921 9303
Wollongong (02) 4221 0205
Young (02) 6382 5921

Comparative Analysis of Victorian/Tasmanian Markets

To discuss the applicability of the Victorian/Tasmanian indicators to

individual properties or situations, contact your local Herron Todd White
office:

Gippsland (Sale/Traralgon/Bairnsdale) (03) 5143 1880/ 03 5176 4300/

(03) 5152 6909
Horsham (03) 5382 6541
Melbourne (03) 9642 2000
Murray Mallee (Swan Hill) (03) 5032 1620
Murray Outback (Mildura) (03) 5021 0455
Murray Riverina (Echuca/Deniliquin) (03) 5480 2601/ (03) 5881 4947
Wodonga (02) 6041 1333
Hobart (03) 6244 6795
Launceston (03) 6334 4997
The month in review

Comparative Property Market Indicators - March 2010

The following pages present a generalised overview of the state of property markets in Capital City, New South
Wales/ACT, Victoria/Tasmania, Queensland, South Australia/Northern Territory/Western Australia & MENA
locations using financing risk-rating scales. They are not a guide to individual property assessments.

For further information contact Rick Carr, Research Director, Herron Todd White, on (07) 4057 0200, or by email on

MARKET INDICATORS
rick.carr@htw.com.au

Comparative Analysis of Queensland Property Markets

To discuss the applicability of the Queensland indicators to individual
properties or situations, contact your local Herron Todd White office:

Brisbane Commercial (07) 3002 0900

Brisbane Residential (07) 3353 7500
Bundaberg/Wide Bay (07) 4154 3355

45
Cairns (07) 4057 0200
Emerald (07) 4980 7738
Gladstone (07) 4972 3833
Gold Coast (07) 5584 1600
Hervey Bay (07) 4124 0047
Ipswich (07) 3282 9522
Mackay (07) 4957 7348
Rockhampton (07) 4927 4655
Sunshine Coast (Mooloolaba) (07) 5444 7277
Toowoomba (07) 4639 7600
Townsville (07) 4724 2000
Whitsunday (07) 4948 2157

Comparative Analysis of South Australia/Northern Territory/Western

Australian Property Markets

To discuss the applicability of the South Australian/Northern Territory and

Western Australian indicators to individual properties or situations, contact
your local Herron Todd White office:

Adelaide (08) 8231 6818

South West WA (Bunbury/Busselton) (08) 9791 6204/ (08) 9754 2982
Perth (08) 9388 9288
Darwin (08) 8941 4833

Herron Todd White acknowledges the assistance of Countrywide Valuers (Bendigo), Roger Cussen Property Specialist
(Warrnambool) in compiling these pages.
 The month in review

Capital City
Capital City Property
PropertyMarket Indicators
Market as at February
Indicators 2010 – Houses
as at February 2010 – Houses
Factor Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra

Rental Vacancy Situation Shortage of Shortage of Balanced market Shortage of Balanced market Shortage of Severe shortage of Balanced market
available property available property available property available property available property
relative to demand relative to demand relative to demand relative to demand relative to demand

Rental Vacancy Trend Steady Tightening Steady Tightening Steady Steady Tightening Tightening

Demand for New Houses Fair Fair Fair Fair Fair Fair Very strong Fair

Trend in New House Construction Steady Steady Steady Steady Steady Declining Steady Increasing

Volume of House Sales Increasing Steady - Declining Increasing Steady Steady Declining Steady Steady

Stage of Property Cycle Rising market Rising market Start of recovery Peak of market Rising market Declining market Rising market Rising market

Are New Properties Sold at Prices Occasionally Occasionally Occasionally Occasionally Occasionally Almost never Occasionally Almost never
Exceeding Their Potential Resale Value

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend Stage of Property Cycle Dem and for New Houses

6
6
6

Increasing Sharply 5 Declining M arket 5

Very So ft 5

Increasing 4 P eak o f M arket 4

So ft 4

Steady 3
Rising M arket 3 Fair 3

Tightening 2
Bo ttom o f M arket 2
Stro ng 2

Tightening Sharply 1

Start of Recovery 1 Very Stro ng 1

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46 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

Capital City
Capital City Property
PropertyMarket Indicators
Market as at February
Indicators 2010 – Units
as at February 2010 – Units
Factor Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra

Rental Vacancy Situation Shortage of Shortage of Balanced market Shortage of Balanced market Shortage of Shortage of Shortage of
available property available property available property available property available property available property
relative to demand relative to demand relative to demand relative to demand relative to demand relative to demand

Rental Vacancy Trend Steady Tightening Steady Tightening Steady Steady Tightening Tightening

Demand for New Units Fair Fair Fair Fair Fair Fair Strong Fair

Trend in New Unit Construction Steady Steady Steady Steady Declining Steady Steady Increasing

Volume of Unit Sales Increasing Steady - Declining Increasing Steady Steady Increasing Steady Steady

Stage of Property Cycle Rising market Rising market Start of recovery Peak of market Rising market Declining market Rising market Rising market

Are New Properties Sold at Prices Frequently Occasionally Occasionally Occasionally Occasionally Almost never Occasionally Almost never
Exceeding Their Potential Resale Value

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend Stage of Prope rty Cycle Dem and for New Units

6
6
6

Very So ft
Increasing Sharply 5

Declining M arket 5 5

So ft
Increasing 4

P eak o f M arket 4
4

Fair
Steady 3

Rising M arket 3
3

Stro ng
Tightening 2

B o tto m o f M arket 2
2

Very Stro ng
Tightening Sharply Start o f Reco very
1
1

e t y ne e e r th rt in rra
ey ne ai de erth bar r win err a ne an d ba
ne

a
de

th

lai
Ad e

rn ur
in
ey

Pe rw
ar

be
rr
n

Ho
r

dn bou is ba d
w

b
Da
ur

ai

o
Pe

ob
ba

el
dn

be

P o
Da nb Sy r is de n
ar

el b
el
bo

y H Ca
H

an
is

d
Sy

l r A
D

S e A Ca B
Br
el

B M
C

M
M

47 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

CapitalCity
Capital City Property
Property Market Indicators
Market as at February
Indicators 2010 – Retail
as at February 2010 – Retail
Factor Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra

Rental Vacancy Situation Over-supply of Balanced market Balanced market Balanced market Balanced market Balanced market Shortage of Balanced market -
available property available property Over-supply of
relative to demand relative to demand available property
relative to demand
Rental Vacancy Trend Steady Steady Steady Steady Steady Steady Steady Steady - Increasing

Rental Rate Trend Stable Stable Stable Stable Stable Stable Increasing Stable

Volume of Property Sales Steady Steady - Declining Increasing Steady Increasing Steady Steady Steady

Stage of Property Cycle Bottom of market Rising market - Start of recovery Peak of market Bottom of market Peak of market Rising market Peak of market
Peak of market

Local Economic Situation Flat Flat Flat Flat Steady growth Flat Steady growth Flat

Value Difference between Quality Properties Significant - Large Nil - Small Significant Small Significant Small Significant Large
with National Tenants, and Comparable
Properties with Local Tenants

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend Stage of Property Cycle Local Econom ic Situation

6
6
6

Increasing
5

Declining M arket 5 Severe Co ntractio n 5

Sharply
P eak o f M arket Co ntractio n
Increasing
4 4
4

Rising M arket Flat

Steady 3
3
3

Tightening B o tto m o f
2

2
Steady Gro wth 2

Tightening M arket
High Gro wth 1

Sharply
1

Start o f Reco very

1

ne de r th rt y ne e de th rt n ra
ne
y
ur an
e
ai ba wi
n rra ne ur an lai
r ba wi er
Pe e Pe r
r th

rt
r
ne

de

ra
el Ho
e

in
d b
ey

d Ho b
o is b Da
b o de Da
ba
an

Sy rw Sy ris an

er
an lb
Pe

lb
ai
ur
dn

Br Ad
Ho
is b

e
nb
A
el

e
Da
B
bo

C C
Sy

M
Ad

M
Ca
Br
el
M

48 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009

1
 The month in review

New
New SouthWales
South Wales Property
PropertyMarket Indicators
Market as at February
Indicators 2010 – Houses
as at February 2010 – Houses
Can-
Central Mudge New- Tam- Tweed Wagga Wollon-
Factor Albury Bathurst berra/ Dubbo Griffith Orange Sydney
Coast e castle worth Coast Wagga gong
Q’beyan
Rental Vacancy Situation Balanced Severe Balanced Balanced Shortage of Balanced Severe Shortage Shortage Shortage Shortage Balanced Shortage Shortage
market shortage of market market available market shortage of of of of market of of
available property of available available available available available available
property relative to available property property property property property property
relative to demand property relative to relative to relative to relative to relative to relative to
demand relative demand demand demand demand demand demand
to
demand
Rental Vacancy Trend Steady Tightening Tightening Steady Tightening Tightening Tightenin Tightening Tightening Steady Tightening Steady Tightening Tightening
sharply g sharply

Demand for New Houses Fair - Fair Fair Fair Fair Fair Strong Soft Fair Fair Fair Fair Fair - Fair
Strong Strong

Trend in New House Construction Steady - Increasing Increasing Steady Declining Steady Steady Declining - Increasing Steady Steady Increasing Steady Steady
Increasing Steady

Volume of House Sales Steady Increasing Steady Steady Steady Increasing Steady Steady Steady Increasing Steady - Steady Steady Increasing
Declining

Stage of Property Cycle Rising Start of Rising Bottom of Rising Bottom of Rising Start of Bottom of Rising Peak of Bottom of Peak of Start of
market recovery market market - market market market recovery market market market market market recovery
Rising
market
Are New Properties Sold at Prices Almost Almost Almost Occasion- Occasion- Occasionally Almost Almost Occasion- Occasion- Occasion- Occasion- Occasion- Occasion-
Exceeding Their Potential Resale never never never ally ally never never ally ally ally ally ally ally
Value

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Re ntal Vacancy Trend Stage of Property Cycle Dem and for New Houses

6 6
6

Increasing Sharply 5
Declining M arket 5
Very So ft 5

Increasing 4
P eak o f M arket 4
So ft 4

Steady 3

Rising M arket 3
Fair 3

Tightening 2

Stro ng 2

B o tto m o f M arket 2

Tightening Sharply Very Stro ng

1 1

Start o f Reco very

0
0

ry s t n st bo ith ee l e ge ey th s t ga ra ry s t a n ast bbo ffith g ee stl e n ge ey rth as t ga rra

aw a
D st

bu ur
ca e

Sy ge
lC n

G bo
'b B ury

C Q ' rs t

W st
Tw m ey
M fith

W e d o r th

ra
O tl e

y o n
Il l g g

g a
ew e

o
bu t hur beya C oa ub ri ff udg c ast ran y dn w or oa ag war i
tra ya
oa

d
Al at h 'be al C Du G r Mu wc a O ra Sy d mw d Co Wa l law
ga oa

ar
ub

N udg

n
Ta dn
ra hu

s
ri f
b

Al
a
en be

ra

e w
ag C
Al

' D G M w O S m d C W l la
er at

Ba / Q tral T a ee gga I
B / Q tr e T a e ga I
Ne rr a e n N e g
/

er r a C en T w a
' be C T w Wa
b W
C' C
C

49 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

NewSouth
New South Wales
Wales Property Market
Property Indicators
Market as at February
Indicators as at 2010 – Units2010 – Units
February
Can-
Central New- Tam- Tweed Wagga Wollon-
Factor Albury Bathurst berra/ Dubbo Griffith Mudgee Orange Sydney
Coast castle worth Coast Wagga gong
Q’beyan
Rental Vacancy Situation Balanced Severe Shortage Balanced Shortage of Balanced Severe Balanced Severe Shortage Shortage Balanced Shortage Shortage
market shortage of of market available market shortage market shortage of of market of of
available available property of of available available available available
property property relative to available available property property property property
relative to relative to demand property property relative to relative to relative relative to
demand demand relative to relative to demand demand to demand
demand demand demand
Rental Vacancy Trend Steady Tightening Tightening Steady Tightening Steady Tightenin Tightening - Tightening Steady Tightening Steady Tightenin Tightening
sharply g sharply Steady sharply g

Demand for New Units Fair - Fair Fair Fair Fair Fair Strong Very soft Fair Fair Fair Fair Fair Fair
Strong

Trend in New Unit Construction Steady - Steady Increasing Declining Declining Declining Steady Steady Steady Steady Steady Increasing Steady Declining -
Increasing Steady

Volume of Unit Sales Steady Increasing Steady Steady Steady Steady Steady Declining Increasing Increasing Steady - Steady Declining Increasing
Declining

Stage of Property Cycle Rising Start of Rising Bottom of Rising Bottom of Rising Bottom of Start of Rising Peak of Bottom of Declining Start of
market recovery market market market market market market recovery market market market market recovery

Are New Properties Sold at Prices Almost Almost Almost Occasion- Occasion- Occasion- Almost Almost Almost Frequently Occasion- Occasion- Occasion Occasion-
Exceeding Their Potential Resale never never never ally ally ally never never never ally ally ally ally
Value

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Re ntal Vacancy Tre nd Stage of Property Cycle Dem and for New Units

6 6
6

Increasing Sharply 5

Declining M arket 5
Very So ft 5

Increasing 4

P eak o f M arket 4 So ft 4

Steady Fair 3

Rising M arket
3
3

Tightening
2

2
Stro ng 2

B o tto m o f M arket
Very Stro ng 1

Tightening Sharply
1
1

Start o f Reco very

0

n t t
ry rst ya oas bbo fith g ee stle n ge ey orth as g ga rra

ca e

aw a
lC n

Sy ge
D st
G o

ra
W ed rth
er at y

C Q 'b rst

O tl e
M h

Tw m y

W st
bu u e
ca ee

ew e
lC n

if d a n

aw a
D st

a
Sy ge

Il l g g
o a
G bo

a g d C th

ra

b
'b B ur

tra ya
er a ry

O tl e

Ta dne
W st
en 'b t

Tw am ney
M fith

fit
oa
Al at h Q'b al C D Gr Mu wc Ora Syd mw d C a W llaw
u

Il l g g
C / Q urs

ar
N udg

ga oa
tra eya

ub

n
oa

s
r a hu

e wo
W ee or

ri f
a

b
'b B lbu

ar
ew g

en e
ub

a
ra
s
n
ri f

ga o

Al

ag C
N ud

a
ra

T d
ra t h

w
B a/ tr e Ta ee gg I
A

r en N

/
r
e C w
T W a
'b
C

C
C

50 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

New
New South Wales
South Wales Property Market
Property Indicators
Market as at February
Indicators 2010 – Retail
as at February 2010 – Office
Can-
Central New- Tam- Tweed Wagga Wollon-
Factor Albury Bathurst berra/ Dubbo Griffith Mudgee Orange Sydney
Coast castle worth Coast Wagga gong
Q’beyan
Rental Vacancy Situation Balanced Over- Balanced Over- Balanced Over- Balanced Over- Balanced Over-supply Balanced Balanced Balanced Over-
market supply of market - supply of market supply of market supply of market of available market market - market - supply of
available Over- available available available property Over- Over-supply available
property supply of property property property relative to supply of of available property
relative to available relative to relative to relative to demand available property relative to
demand property demand demand demand property relative to demand
relative to relative to demand
demand demand
Rental Vacancy Trend Steady Increasing Steady - Steady Steady Increasing Steady Steady Steady Steady Steady Increasing Steady - Steady
Increasing Increasing

Rental Rate Trend Stable Declining Stable Stable Declining Declining Stable Stable Declining Stable Declining Declining - Stable Stable
Stable

Volume of Property Sales Declining Declining Steady Steady Steady Steady Steady Steady Steady Steady Steady Declining Steady - Steady
Declining

Stage of Property Cycle Bottom of Declining Peak of Declining Declining Declining Start of Declining Declining Bottom of Declining Bottom of Declining Bottom of
market market market market market market recovery market market market market market market market

Local Economic Situation Contraction Flat Flat Flat Flat Flat Flat Flat Flat Flat Flat Flat Flat Flat

Value Difference between Quality Significant Significant Large Small Significant Large Significan Small Significant Significant - Significant Small - Significant Significan
Properties with National Tenants, t Large Significant t - Large
and Comparable Properties with
Local Tenants
Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Re ntal Vacancy Tre nd Stage of Property Cycle Local Econom ic Situation

6
6

Increasing Sharply Declining M arket

5

5
Severe Co ntractio nt 5

Increasing P eak o f M arket

Co ntractio n
4

4
4

Steady Rising M arket Flat

3

Tightening
B o tto m o f M arket
2

Steady Gro wth

2

Tightening Sharply
1
1

Start o f Reco very 1

High Gro wth

0
0

n st bo ith ee l e ge ey th s t ga r a
c a ee

ry s t
aw a
D ast

Sy ge
G bo

a g C th

ra
lC n
er at y

c a ee
en b t

O tl e

Tw am ey
M fith

W st

Sy n ge
G bo

ra
D ast

aw a
er Bat ury

a g C th
en ' b t

T w m ey
M ffith
l C an

O stl e
C /Q' rs

W st
Il l g g
tr a eya
'b B bur

bu ur ya oa b i ff dg st n n or a g ar

C /Q rs

Il l a g g
W eed or

ar
ga oa
ew g
ub

n
s

T dn

W eed or
r a hu

ar
o

ew g

ga oa
ub
ri f

T a dn
r a hu

tr a e y
N ud

Al at h ' be al C Du G r Mu wc a O ra Sy d mw d Co Wa l law

o
ra

b
w

N ud

ra
ri
Al

w
Al
B a/Q tr T a ee gga I
r r en Ne
' be C T w Wa

'b
C

C
51 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

Victoria/Tasmania
Victorian Property Market
and Tasmanian Indicators
Property Market asIndicators
at February 2010
as at– February
Houses 2010 – Houses
Burnie -
Factor Bendigo Echuca Gippsland Melbourne Mildura Wangaratta Warrnam- Wodonga Hobart Launceston
Devonport
bool
Rental Vacancy Situation Balanced Balanced Shortage of Shortage of Balanced Balanced Shortage of Balanced Shortage of Shortage of Shortage of
market market available available market market available market available available available
property property property property property property
relative to relative to relative to relative to relative to relative to
demand demand demand - demand demand demand
Balanced
market
Rental Vacancy Trend Steady Tightening Tightening Tightening Tightening Steady Tightening Steady Steady Steady Steady

Demand for New Houses Fair Fair Strong Fair Fair Fair - Strong Fair - Strong Fair - Strong Fair Fair Fair

Trend in New House Construction Steady Steady Increasing Steady Steady Steady - Steady Steady - Declining Declining Declining
Increasing Increasing

Volume of House Sales Steady Steady Increasing Steady - Steady Steady Steady Steady Declining Declining Declining
Declining

Stage of Property Cycle Start of Peak of market Bottom of Rising market Start of Rising market Rising market Rising market Declining Declining Declining
recovery market recovery market market market

Are New Properties Sold at Almost never Occasionally Occasionally Occasionally Occasionally Almost never Almost never Almost never Almost never Almost never Almost never
Prices Exceeding Their Potential
Resale Value

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-ratin g

Re ntal Vacancy Tre nd Stage of Property Cycle Dem and for Ne w Hous es

6
6 6

Increasing Sharply 5
Declining M arket 5 Very So ft 5

Increasing 4 P eak o f M arket 4

So ft 4

Steady 3

Rising M arket 3

Fair
3

Tightening
2

B o tto m o f M arket
2
2

Stro ng
1

Tightening Sharply
1

Start o f Reco very Very Stro ng

0

e l t rt
igo uca land urn ur
a
at
ta oo ga po r ba on igo uc a land urn
e a ta ol a rt
ar
t n

ol
st ur

ne

tta

t
a

De ga
at

go

rt
ng po

nd

on
on to

or
nd i ld gar amb bo

W dur
n

uc

La oba
h

bo
s o Ho n ce nd ild gar ob ces

a
ur

n
di

np
la
o d e vo do von

st
Be Ec ipp lb ch pps o m

ar

do
ch

am
M

en

bo
ps

ce
il
n e b a H

vo
n l M

H
e E o

ng
a r u B i a n arrn n

E
W -D

o
r e W -De

ip
B
G

un
el

rn
M La u

W
W Wa G

a
M

G
La

M
ie

ar
W W ie

e-
rn

W
rn

ni
Bu Bu

ur
B
52 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

Victoria/Tasmania
Victorian Property Market
and Tasmanian Indicators
Property Marketas at February 2010
Indicators – Units
as at February 2010 – Units
Burnie - Laun-
Factor Bendigo Echuca Gippsland Melbourne Mildura Wangaratta Warrnam- Wodonga Hobart
Devon-port ceston
bool
Rental Vacancy Situation Balanced Balanced Shortage of Shortage of Balanced Balanced Shortage of Balanced Shortage of Shortage of Shortage of
market market available available market market available market available available available
property property property property property property
relative to relative to relative to relative to relative to relative to
demand demand demand - demand demand demand
Balanced
market
Rental Vacancy Trend Steady Steady Tightening Tightening Tightening Steady Tightening Steady Steady Steady Steady

Demand for New Units Strong Fair Strong Fair Fair Fair - Strong Fair - Strong Fair - Strong Fair Fair Fair

Trend in New Unit Construction Increasing Steady Increasing Steady Steady Steady - Steady Steady - Steady Steady Steady
Increasing Increasing

Volume of Unit Sales Steady Steady Increasing Steady - Steady Steady Steady Steady Increasing Increasing Increasing
Declining

Stage of Property Cycle Start of Peak of Rising market Rising market Start of Rising market Rising market Rising market Declining Declining Declining
recovery market recovery market market market

Are New Properties Sold at Prices Almost never Occasionally Occasionally Occasionally Occasionally Almost never Almost never Almost never Almost never Almost never Almost never
Exceeding Their Potential Resale
Value

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Re ntal Vacancy Tr e nd Stage of Prope rty Cycle Dem and for New Units

6 6 6

Increasing Sharply 5
Declining M arket
5
Very So ft
5

P eak o f M arket So ft
Increasing 4
4
4

Rising M arket Fair

Steady 3

3
3

Stro ng
B o tto m o f M arket
Tightening
2
2

Very Stro ng
1
Start o f Reco very 1

Tightening Sharply
1

0
0

l l rt rt
rt rt igo ca land ne a tta bo o a on
rt
e- d l

e a ur
na ta
M e

igo uca and urn dura ratt boo nga po n

o

vo a

ng
on
el nd
E o

po
W ng ra
ip ca

ba
ce rt

ur st
o
n

ba sto ra
e g

hu
g

ur W bo

nd
un ba
rr at

i ld
np
a u

do von
ur

D on
M la

n d ch psl Ho n ce
di

st
G hu

il o on s bo ga nam
W ild

Ec
a ar

Ho n ce
m

o a am Be ipp
La o
bo
ps
en

e b g d l M o
c

n
H

E ip l M o v e W -De
ni o

B n rrn a rr u
B

e a e u G M
G M W Wa
W -D La W Wa ie La
ie rn
rn Bu
Bu
B

53 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

Victoria/Tasmania
Victorian Property Market
and Tasmanian Indicators
Property Marketas atIndicators
February 2010
as –atRetail
February 2010 – Retail
Burnie - Laun-
Factor Bendigo Echuca Gippsland Melbourne Mildura Wangaratta Warrnam- Wodonga Hobart
Devon-port ceston
bool
Rental Vacancy Situation Balanced Shortage of Shortage of Balanced Over-supply of Balanced Balanced Balanced Balanced Balanced Balanced
market available available market available market market market market market market
property property property
relative to relative to relative to
demand demand demand
Rental Vacancy Trend Steady Tightening Tightening - Steady Steady Steady Steady Steady Steady Steady Steady
Steady

Rental Rate Trend Stable Increasing Stable Stable Stable Stable Stable Stable Stable Stable Stable

Volume of Property Sales Declining Increasing Declining Steady - Steady Declining Steady - Declining Steady Steady Steady
Declining Declining

Stage of Property Cycle Bottom of Rising market Start of Rising market Bottom of Bottom of Bottom of Bottom of Peak of Peak of Peak of
market recovery - Peak of market market market market market market market
market

Local Economic Situation Flat Steady growth Flat Flat Flat Contraction Steady growth Contraction Flat Flat Flat

Value Difference between Quality Significant Significant Small Nil - Small Small Significant Small Significant Small Small Small
Properties with National Tenants,
and Comparable Properties with
Local Tenants
Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend Stage of Property Cycle Local Econom ic Situation

6 6 6

Increasing Sharply
5
5

Severe Co ntractio n 5

Declining M arket
Increasing
4
4

Co ntractio n
4

P eak o f M arket
Steady
3
3

Flat
3

Rising M arket
Tightening
2
2

Steady Gro wth

2

B o tto m o f M arket
1
1

Tightening Sharply
1

Start o f Reco very High Gro wth 0

l t ar t l t
igo uc a nd r ne ura tta o o ga or igo uc a land ur ne dur a atta bo o nga po rt bar
n d c h ps la bou Mi ld gara mb don onp Hob nd o M i l g ar
a n ra

t
Ec o

ip c a

ne

od l

a
h
r n tta

m o do von Ho
d

W bo o

ar
H rt
s
ig

- D ong
Ec ipp el b
M lan

W i ldu

Be

po
e
hu

ur

ob
a r ra

a
nd

E l a o
B ip e an rn v a n rr n W De
bo

am
ps

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W ga

W De
M
Be

G M W Wa r G M a -
ev
el

e- W ie
G

ni W
r rn
ie

Bu Bu
rn
Bu

54 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

Queensland Property
Queensland PropertyMarket Indicators
Market as at February
Indicators 2010 – Houses
as at February 2010 – Houses
Sun-
Towns- Whit- Rock- Glad– Bunda- Hervey Gold Too-
Factor Cairns Mackay Emerald shine Brisbane Ipswich
ville sunday hampton stone berg Bay Coast woomba
Coast
Rental Vacancy Situation Balanced Balanced Balanced Balanced Balanced Balanced Balanced Balanced Balanced Balanced Balanced Balanced Balanced Shortage of
market market market market - market market market market market - market market market market available
Over- Over- property
supply of supply of relative to
available available demand
property property
relative to relative to
demand demand
Rental Vacancy Trend Tightening Steady Steady Steady - Steady Tightening Steady Steady Steady Steady Steady Steady Tightening Tightening
Increasing sharply

Demand for New Houses Fair Fair Fair Fair Fair Strong Soft Soft - Fair Fair Soft Fair Fair Soft Fair

Trend in New House Declining Steady Steady Declining Steady Increasing Declining Declining - Declining - Declining Steady Increasing Declining Steady
Construction Steady Steady

Volume of House Sales Steady Steady Steady Declining Declining Steady Steady Steady Increasing - Declining Increasing Declining Declining Increasing
Steady

Stage of Property Cycle Bottom of Start of Start of Peak of Bottom of Rising Bottom of Bottom of Start of Bottom of Start of Start of Bottom of Rising
market recovery recovery market market market market market recovery market recovery recovery market market

Are New Properties Sold at Occasion- Occasion- Almost Almost Occasion- Occasion- Almost Occasion- Occasion- Occasion- Occasion- Frequently Frequently Occasion-
Prices Exceeding Their ally ally never never ally ally never ally ally ally ally ally
Potential Resale Value

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend Stage of Property Cycle Demand for New Houses

6
6
6

Increasing Sharply 5
Declining M arket 5

Very Soft 5

Increasing 4
Peak of M arket 4
Soft 4

Steady 3 Rising M arket 3 Fair 3

Tightening 2
Bottom of M arket 2 Strong 2

Tightening Sharply 1
Start of Recovery 1 Very Strong 1

0
0
0

s ld e g t h s le
ay ka y ton ra l
d ne r g
Bu ds t l d

y t e s t n e a st ic h ba
ow w i t
G e n

i rn v il le d ay ka to n e ra ton er ay as a n o a s ic b a
G is b s t
Su Her dab e
hi y B g

i rn
ba
W w n ns

am y

d e

ay
oo c h
oc a y
ts il le

T o ps a s
C y

il
Em pto

on
kh c ka

la ra

n s e er
R M da

ol an
ne a

C a n sv s u nd M ac am p Em e ds to d ab e ey B C oar is ba C o Ip s w oo m
Br oa
r

C a w n s s u n M a c am pEm a ds d ab e y B C o r is b ld C Ips w o o m
m
o
h i sv
T o Cai

un

it e w h it h la u n r v ne B ld ow
h G l B un e r v h i n B G o ow o k G B He Go
I
n

hi
v

T o Wh ck T W
Ro
c
ns To
Ro
H ns To
S u Su

55 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

Queensland Property
Queensland PropertyMarket Indicators
Market as at February
Indicators 2010 – Units
as at February 2010 – Units
Sun-
Towns- Whit- Rock- Glad- Bunda- Hervey Gold Too-
Factor Cairns Mackay Emerald shine Brisbane Ipswich
ville sunday hampton stone berg Bay Coast woomba
Coast
Rental Vacancy Situation Balanced Over- Balanced Balanced Shortage of Balanced Balanced Balanced Balanced Balanced Balanced Over- Balanced Shortage of
market - supply of market market available market market market market - market market supply of market available
Over- available property Over- available property
supply of property relative to supply of property relative to
available relative to demand available relative to demand
property demand property demand
relative to relative to
demand demand
Rental Vacancy Trend Tightening Steady Steady Steady Steady Tightening Steady Steady Steady Steady Steady Steady Steady Tightening
sharply

Demand for New Units Soft Soft Fair Fair Fair Strong Soft Soft - Fair Very soft Soft Fair Soft Soft Strong

Trend in New Unit Declining Declining Steady Steady Steady Increasing Declining Declining - Declining Declining Steady Declining Declining Steady
Construction Steady significantly

Volume of Unit Sales Steady Steady Steady Declining Steady Steady Steady Steady Declining - Declining Increasing Declining Declining Increasing
Declining
significantly
Stage of Property Cycle Bottom of Start of Start of Peak of Bottom of Rising Bottom of Bottom of Declining Bottom of Start of Rising Bottom of Rising
market recovery recovery market market market market market market market recovery market market market

Are New Properties Sold at Occasion- Occasion- Almost Almost Almost Occasion- Almost Occasion- Occasion- Occasion- Occasion- Very Frequently Occasion-
Prices Exceeding Their ally ally never never never ally never ally ally ally ally frequently ally
Potential Resale Value

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend Stage of Property Cycle Dem and for New Units

6
6
6

Increasing Sharply Very So ft

5

Declining M arket 5 5

So ft
Increasing 4

P eak o f M arket 4
4

Steady 3
Rising M arket 3
Fair 3

Tightening 2

B otto m o f M arket 2
Strong 2

Tightening Sharply 1

Start of Reco very 1

Very Strong 1

s e y y n ld e g t e st h
ba
n ld e g y t e st h i rn v il l da ka pto era ton er Bay as an oa ic
Bu ds al d

s e y y
G i sb st
G e n

ow sw t
Su He dab ne
hi y B g

ba
ba
oc a ay

d ne
am ay
W wn rns
u e

oo ich
To Ip oa s
C y

i rn v il l da ka pto era ton er Ba oas an oa ic

Em pto

n s rve er

C a w ns ts un M ac am Em ads dab ey e C o ri sb ld C Ips w oom

ne a
ts il l

Br oa
to
la r
kh ck
R M nd

ol a

C a wns ts un Mac am Em ads dab ey e C ri sb ld C Ips w oom

h i sv
i
T o Ca

i h l v
G B un er h i n B G o ow
i h l n v B w T o Wh ck
n

T o Wh ck G Bu er hi n o o H ns To
Ro
H ns G To Ro
Su Su

56 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

Queensland Property
Queensland PropertyMarket Indicators
Market as at February
Indicators 2010 – Retail
as at February 2010 – Retail
Rock- Hervey Sunshine Too-
Factor Cairns Townsville Mackay Gladstone Bundaberg Brisbane Gold Coast
hampton Bay Coast woomba
Rental Vacancy Situation Balanced Balanced Balanced Balanced Balanced Over-supply of Balanced Balanced Balanced Over-supply of Balanced
market - Over- market market market market available market - Over- market - Over- market available market - Over-
supply of property supply of supply of property supply of
available relative to available available relative to available
property demand property property demand property
relative to relative to relative to relative to
demand demand demand demand
Rental Vacancy Trend Steady Steady Steady Steady Steady Steady Steady - Increasing Steady Increasing Steady -
Increasing Increasing

Rental Rate Trend Stable Stable Stable Increasing Stable Declining - Declining - Declining - Stable Declining - Stable
Stable Stable Stable Stable

Volume of Property Sales Declining Steady Steady Steady Steady Increasing - Declining Increasing - Increasing Declining - Steady
significantly Steady Steady Declining
significantly
Stage of Property Cycle Bottom of Bottom of Stable Start of Bottom of Declining Declining Declining Start of Bottom of Peak of market
market market recovery market market market market recovery market - Declining
market
Local Economic Situation Flat Flat Steady growth Flat Flat Steady growth Flat Contraction Flat Contraction Flat
- Flat

Value Difference between Quality Small Significant Small Significant Significant Small - Significant Significant Significant Significant - Significant
Properties with National Tenants, and Significant Large
Comparable Properties with Local
Tenants
Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend Stage of Property Cycle Local Econom ic Situation

6
6
6

Increasing Sharply 5
Declining M arket 5
Severe Co ntractio n 5

Increasing 4

P eak o f M arket 4 Co ntractio n 4

Steady Flat
Rising M arket
3
3

Tightening 2
Steady Gro wth 2

B o tto m o f M arket 2

Tightening Sharply 1
v High Gro wth 1

Start o f Reco very 1

0
0

s e y n e g y st e st a
t t i rn v il l c ka pto ton ber Ba oa an oa mb
oo t

s y e
n d ne

rn v il le c ka pton ton berg Bay oas ane oa s m b a

la on
s

kh ay

Su er v e r g

is t
ol ne

ba
R Ma e

ow a s
ne y
B r oa s
T o ai rn

h i Ba

Ca w ns Ma am ads da ey e C ris b ld C oo
l

i
oc c k

Bu s t o
G pt
vi

G ba

m
T o Co
H ab

Ca s a m ads da ey e C ris b ld C oo
ns

C
am
C

n s ey

n l n r v n B o ow
d

M a h
To
d

c k G Bu H e shi
w

w h l n rv n B o w
To c k G Bu He shi G T oo Ro n
G To
Ro u n Su
S

57 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

Northern
SA, NT andTerritory, South Australia
WA Property Market&Indicators
Western Australia
as atProperty Market
February 2010Indicators
– Houses as at February 2010 – Houses
Adelaide Barossa Iron Alice Duns-
Factor Adelaide Darwin Bunbury Busselton Geraldton Perth
Hills Valley Triangle Springs borough
Rental Vacancy Situation Shortage of Shortage of Balanced Balanced Shortage of Severe Balanced Balanced Balanced Shortage of Shortage of
available available market market available shortage of market market market available available
property property property available property property
relative to relative to relative to property relative to relative to
demand demand demand relative to demand demand
demand
Rental Vacancy Trend Tightening Steady Steady Steady Tightening Tightening Steady Tightening Steady Tightening Steady

Demand for New Houses Fair Fair Fair Fair Strong Very strong Strong Fair Fair Fair Fair

Trend in New House Construction Steady Steady Declining Declining Steady Steady Steady Steady Steady Steady Steady

Volume of House Sales Steady Steady Steady Steady Steady Steady Steady Increasing Steady Steady Steady

Stage of Property Cycle Peak of Peak of Peak of Peak of Rising market Rising market Rising market Rising market Rising market Peak of Peak of
market market market market market market

Are New Properties Sold at Prices Occasionally Occasionally Occasionally Almost never Occasionally Occasionally Almost never Occasionally Occasionally Occasionally Occasionally
Exceeding Their Potential Resale Value

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend Stage of Property Cycle Dem and for New Houses

6
6
6

Increasing Sharply Declining M arket

Very So ft
5 5
5

Increasing 4

P eak o f M arket 4
4

So ft
Steady 3

Rising M arket 3
3

Fair
Tightening
2

B o tto m o f M arket
2

Tightening Sharply Stro ng 1

Start o f Reco very

1
1

Very Stro ng
0

de il ls e n on r th
ey gl gs wi A e l ls le s in t on th

r th
e
y

de
lai A

il ls

in

on
dt ai d e H i r

gs
ll Pe

A
ng in g ar w

y
ian

gl
H in r tW al ll e Pe

w
e
t W ra ld

tW

Pe
Va r

ai

dt
Da el

r in
e de Tr V a T r ia pr

ar
Sp es

al
er

ia
el
Ad

al
es

de
ai Ad id D

Sp

es
V

Tr
a

Ad

er
el on S e
ss ic e W G a a

ai
l

a
ss n
hW

W
ic e G

G
n
Ir h

e
ss
e Ir o

el
Ad o Al ut

Ir o
r

ic
Ad ro Al ut

h
Ad

ro
Ba

Al

ut
So Ba So

Ba

So
58 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

Northern
SA, NT andTerritory, South Australia
WA Property Market & Western Australia
Indicators as atProperty Market
February 2010Indicators
– Unitsas at February 2010 – Units
Adelaide Barossa Iron Alice Duns-
Factor Adelaide Darwin Bunbury Busselton Geraldton Perth
Hills Valley Triangle Springs borough
Rental Vacancy Situation Shortage of Shortage of Balanced Balanced Shortage of Shortage of Balanced Balanced Balanced Shortage of Shortage of
available available market market available available market market market available available
property property property property property property
relative to relative to relative to relative to relative to relative to
demand demand demand demand demand demand
Rental Vacancy Trend Tightening Steady Steady Steady Tightening Tightening Steady Tightening Steady Tightening Steady

Demand for New Units Fair Fair Fair Fair Strong Strong Strong Fair Fair Fair Fair

Trend in New Unit Construction Steady Steady Declining Declining Steady Steady Steady Steady Declining Steady Steady

Volume of Unit Sales Steady Steady Steady Steady Steady Steady Steady Increasing Steady Steady Steady

Stage of Property Cycle Peak of Peak of Peak of Peak of Rising market Rising market Rising market Rising market Rising market Peak of Peak of
market market market market market market

Are New Properties Sold at Prices Occasionally Occasionally Occasionally Almost never Occasionally Occasionally Almost never Occasionally Occasionally Occasionally Occasionally
Exceeding Their Potential Resale Value

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend Stage of Property Cycle Demand for New Units

6 6
6

Increasing Sharply 5
Declining M arket 5

Very Soft 5

Increasing 4

Peak o f M arket 4

Soft
4

Steady 3

Rising M arket 3

Fair
3

Tightening Strong
2

Bo tto m o f M arket
2
2

Tightening Sharply 1

Very
1

Start o f Reco very

1

Strong
0

e le r th
Sp l e

l ls in n
r th
lls

r th
Ba ai d e

s
on
gs

W win

de
G WA

e
y

in
ey

on
d A

l ls
H i all e iang r in g ar w W ldto Pe

gs
e l lai d

lai

A
g

gl
s s Hi

rw

Pe
dt

Pe

ll e
Hi
ai
n

tW

dt
rin
l

ia n
Iro V al

rin
r

t
Al Tria

el
e

Da
al

a
u t Da

al
t

Va
r
ro e

s
Ad de

p r

de
D
es

Ad id V

Sp
Tr

es
T e

Ad
er

Ge

er
a S
e la
A

ai
s s Ir on l ic e

a
hW

G
n

n
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ic e
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el

Ir o
ic

Ad a r o
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ut

h
Ad

ro
A

Al

ut
o

Ba
So

So
S

59 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009
 The month in review

Northern
SA, NT andTerritory, South Australia
WA Property Market & Western Australia
Indicators as atProperty Market
February 2010Indicators
– Retailas at February 2010 – Retail
Barossa South West
Factor Adelaide Adelaide Hills Iron Triangle Alice Springs Darwin Geraldton Perth
Valley WA
Rental Vacancy Situation Balanced market Balanced market Balanced market Balanced market Shortage of Shortage of Balanced market Balanced market Balanced market
available property available property
relative to relative to
demand demand
Rental Vacancy Trend Steady Steady Steady Steady Steady Steady Steady Tightening Steady

Rental Rate Trend Stable Stable Stable Stable Increasing Increasing Stable Increasing Stable

Volume of Property Sales Steady Steady Steady Steady Steady Steady Steady Steady Increasing

Stage of Property Cycle Peak of market Peak of market Peak of market Peak of market Rising market Rising market Start of recovery Declining market Bottom of market

Local Economic Situation Flat Flat Flat Flat Steady growth Steady growth Flat Steady growth Steady growth

Value Difference between Quality Small Small Small Small Significant Significant Small Nil Significant
Properties with National Tenants, and
Comparable Properties with Local
Tenants
Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend Stage of Property Cycle Local Econom ic Situation

6 6
6

Increasing Sharply Severe Co ntractio n

Declining M arket
5
5 5

Increasing Co ntractio n
P eak o f M arket
4 4
4

Steady Flat
Rising M arket
3
3

Tightening2

B o tto m o f M arket 2
Steady Gro wth 2

Tightening Sharply
1

Start o f Reco very High Gro wth 1

de l ls l ey e in A ton er th
l ls l ey le on er th Hi gl gs
de gs rw in lai al r ian pr in ar w s t W ra ld
e

r th

A
de

il ls

on
in
gs

Hi
A

ng
y

lai
gl

dt P
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al W
tW

in e de a V
Pe
ai

dt
H

s t era l
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al

ar

de de e
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V

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i T s n W
Ad

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ai

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a

s s Iron l ic e
W

W G r i h
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n

ut
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h
Iro

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d o t
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A A u So
ut
Al

Ba B
So
Ba

So

60 MARKET INDICATORS
No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. © Herron Todd White Copyright 2009