Market Analysis Archives

Property Valuation and Advisory Services - PVAWA

Market Overview – Perth Residential Apartment

Perth Residential Apartment Market Overview

March 2018

Significant increases in supply of apartments, especially over the last three years, have led to concerns over potential oversupply.
Continued low interest rates, a cyclical upturn in the affordable property market, and to a lesser extent foreign buyer interest are providing support to the apartment market.
The predominant buyers are owner/occupiers who have down-sized.
Investor demand appears to be improving with a sense that the bottom of the cycle has passed, and that rents and capital values may start to grow.
Although views differ on whether the market is oversupplied it is generally accepted that new apartment supply has increased considerably affecting key market indicators such as price growth, rents and vacancy rates.
While industry sources are citing renewed confidence in the Perth apartment market, it is likely to remain subdued during 2018.
Housing affordability, increased traffic congestion and insufficient public transport are all likely to contribute to a higher demand for apartment living in and around the inner city areas.
Compared with other cities in Australia, such as Sydney and Melbourne, which may be in a mature phase of the demand cycle, Perth is still a developing market with apartments making up a relatively low percentage of total dwellings.
There is potential demand for Build to Rent in Perth, which is the development of dwellings for lease rather than private treaty sales.

Property Valuations & Advisory (WA) is an independent provider of quality valuation and advisory services. PVA(WA) has a wide range of specialisations including: Commercial, retail and industrial; residential development including land subdivision and apartments; prestige residential; aged care; retirement living; medical; education; tourism and licensed premises; wineries and vineyards.

For further details please contact:

Paul Rogers - Director
paul.rogers@pvawa.com.au
08 6500 3600

Property Valuation & Advisory (WA)

Unit 2, 168 Stirling Highway, Nedlands WA 6009

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Market Overview – Perth CBD Office Market – February 2019

Market Overview - Perth CBD Office - PVA WA

Perth CBD Office Market Snapshot

February 2019

After a difficult few years, the Perth CBD market is showing signs of recovery, with falling vacancy rates and positive demand. With very little new stock in the pipeline over the next few years it is anticipated that vacancy rates will fall further and that effective rents will start to increase.

For further details please contact:

Gavin Chapman - Managing Director
gavin.chapman@pvawa.com.au
08 6500 3600

Property Valuation & Advisory (WA)

Unit 2, 168 Stirling Highway, Nedlands WA 6009

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Market Overview – Perth Office Market – July 2018

Perth Office Market Overview

July 2018

Perth’s CBD office market is showing signs of recovery after more than five years of economic downturn and large increases in supply resulting in high office vacancy rates, high incentives and a drop of more than 50% in effective rents.
The latest office data from the Property Council of Australia (PCA) states that there was an increase in office supply in the CBD during the 12 months to July 2018 of only 108 square metres.
The PCA also report that vacancy rates have decreased from 19.8% in January 2018 to 19.4% in July 2018, the lowest level in three years.
The only new space due to come online this year is Woodside’s 48,484 square metre new headquarters, at 98 Mounts Bay Road.
The mining industry is showing some signs of recovery with several new projects starting in the state.
National Australia Bank, in their Commercial Property Survey - Q2 2018, report that confidence in the office market is still in negative territory in Western Australia, with a return to positive in the next 12 months.
Confidence in the market has translated into transactional activity in the first half of 2018, with around $250 million of sales reported in the CBD.
Recovery, however, is expected to be slow. It will take some time for excess supply to be absorbed.

For further details please contact:

Gavin Chapman - Managing Director
gavin.chapman@pvawa.com.au
08 6500 3600

Property Valuation & Advisory (WA)

Unit 2, 168 Stirling Highway, Nedlands WA 6009

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Market Overview – Perth Residential Market

Perth Residential Market Overview

November 2018

While the housing market remains subdued, there are some glimmers of light in the broader economy, and also signs of improvements in the rental market.

Sentiment in the residential property market has improved, but is still negative. Dwelling prices have fallen again during 2018, and some industry sources are predicting a further decline in 2019.

For further details please contact:

Gavin Chapman - Managing Director
gavin.chapman@pvawa.com.au
(08) 6500 3600

Property Valuation & Advisory (WA)

Unit 2, 168 Stirling Highway, Nedlands WA 6009

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This analysis relies upon third party sources of information.While the resources are considered reliable, their accuracy cannot be guaranteed. We therefore accept no liability for any reliance on our analysis.

Valuer & Director of PVAWA Gordon Jeanes Has Retired

Gordon Jeanes Has Now Retired

Gordon Jeanes, a valuer and director with Property Valuation & Advisory (WA), has retired, effective 31 December 2017.

Gordon has worked in the property industry for more than 30 years as a valuer and a property consultant. During that time he gained experience across a variety of market sectors, specialising in the retail, commercial and hospitality markets. Prior to his becoming a director at Property Valuation & Advisory he held senior positions at CBRE and the Commonwealth Bank.

Gordon will be greatly missed as a valued colleague. The team at Property Valuation & Advisory would like to wish him a long, healthy and happy retirement.

In Gordon’s absence, please do not hesitate to contact one of our team of specialists for your property valuation or advisory needs.

Visit Our Team here.

New Superannuation Laws July 2017 Valuation of your property assets

New Superannuation Laws July 2017
Valuation of your property assets

As you know, new superannuation law changes came into effect in July 2017.

If you or your clients elected to apply for Capital Gains Tax relief to reset the cost base on assets, now is the time to have those land and building assets valued.

The relief allows the super fund to deem the transferred asset has been sold and repurchased at current market value as at 30 June 2017. The deemed sale triggers a capital gains tax event, which means the cost base for the asset is reset at current market value. The implications of this deemed transaction is that when the asset is sold some time in the future, after 1 July 2017, only capital gains arising from 1 July 2017, will be taxable. To reset the value of an asset, a valuation as at 1 July 2017 needs to be conducted.

The ATO states:

“Except for the most straightforward valuation processes, valuations undertaken by persons experienced in their field of valuation would be expected to provide more reliable values than those provided by non-experts.”

and

“The valuation process should be adequately documented; if it isn’t, we may not accept the resulting value as a market value.”

Our Team of Valuers at Property Valuation & Advisory have extensive experience in the valuation of property assets. Please contact us if you would like more information, or to discuss a valuation requirement.

Tel : 08 6500 3600
Email : info@pvawa.com.au

Or complete a request for quote: REQUEST FOR QUOTE

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Annual Rating & Land Tax Assessment – July 2017

As a property owner, you would have recently received your annual rating and taxing notice for 2017/2018. It is worth reviewing the determined value of your property (either Gross Rental Value (GRV) or Unimproved Value (UV)) to ensure you’re not overpaying relative to other property owners in the same area.

For a nominal initial fee Property Valuation & Advisory (WA) can review your assessed value(s) and advise if an objection, which is to be lodged within 60 days of issue of notice, is warranted.

If the initial review identifies an opportunity to mount a viable objection to the assessed value, a detailed assessment can be undertaken at a negotiated fee and a formal objection process can be pursued.

Early intervention and pre-assessment negotiation has proven to be a highly cost-effective solution. We have significantly reduced property tax imposts before disputes progress from objection to appeal.

Our experience has shown us that statutory assessments used for rating and taxing purposes do not always reflect market conditions or movements as at the valuation date, and do not always adequately reflect the particular idiosyncrasies or constraints that a property might possess. It is imperative that all of these factors are understood and reflected to arrive at a correct assessment which does not overstate the value of the property for rating and taxing purposes.

Please contact us to discuss how we might be able to assist you.

Tel : 08 6500 3600
Email : info@pvawa.com.au
Web : www.pvawa.com.au
or complete your details in the quote tab on our website home page and one of our experienced team of professional valuers will get back to you.

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2016 Census analysis for Greater Perth – July 2017

Snapshot of Census 2016 for Greater Perth vs. Australia

Population	1,943,858	1,728,867	12.4%	23,401,892	21,507,717	8.8%
		Greater Perth			Australia
	2016	2011	Increase	2016	2011	Increase
Median Age	36	36	–	38	37	+1 Year
Median household income	$1,643	$1,459	12.6%	$1,438	$1,234	16.5%
Median weekly rent	$360	$320	12.5%	$335	$285	17.5%
Median monthly mortgage	$2,000	$2,000	0.0%	$1,755	$1,800	-2.5%
Occupied private dwellings	690,284	627,096	10.1%	8,286,073	7,760,320	6.8%
Separate house	76.9%	78.6%	-1.7 pp	72.9%	75.6%	-2.7 pp
Semi/townhouse etc	16.0%	11.9%	+4.1 pp	12.7%	9.9%	+2.8 pp
Flat/unit/apartment	6.6%	9.1%	-2.5 pp	13.1%	13.6%	-0.5 pp

Source: ABS, PVA(WA) Research

The ‘average’ person living in Greater Perth is:
- Female
- 6 years old
- Married or in a couple family with children
- Born in Australia, with one or both parents born overseas
- Speaking only English at home
- Earning a personal weekly income of $728, family income of $1,955, and household income of $1,643
- Living in a stand-alone house with 4 or more bedrooms
- Paying a mortgage of $2,000 per month or rent of $360 per week

Despite a recent population growth slow-down, the population in Greater Perth increased by 12.4% over the five years between the 2011 and 2016 Census’, compared with an 8.8% increase nationally.

At 36 the median age has not changed since the 2011 Census, but is 2 years lower than the national median age.

The 65+ years age group were the fastest growing cohort, increasing by 24.4% over the five years since the 2011 Census, almost double the population growth overall.

The average number of people per household is 2.6.

Family structure and dwelling composition is little changed over the period 2011 to 2016.

There has been a large increase in the number of townhouses/semi-detached houses/terraces since 2011. However, the average number of bedrooms remains the same at 3.3.

A smaller proportion of dwellings are rented in Greater Perth than in Australia as a whole, 26.7% compared with 30.9%, possibly reflective of more affordable housing.

While the proportion of dwellings owned outright is lower in Greater Perth, there is a significantly higher percentage of dwellings which are owned with a mortgage – 41.9% compared with 34.5% nationally.

Median income levels are higher in Greater Perth than in Australia, but growth has been lower over the five years since 2011.

2016 POPULATION – GREATER PERTH

The total population of Greater Perth was 1,943,858.

Gender

50.4% female
49.6% male

Age Profile

The most prominent age groups are 25-44 years (29.8%) and 45-64 years (24.3%). The median age is 36 years, compared with the median age in Australia of 38 years.

Age Profile

	2016	2011	Increase in Population
0-14 years	19.1%	19.2%	11.4%
15-24 years	13.0%	14.3%	2.70%
25-44 years	29.8%	29.3%	14.7%
45-64 years	24.3%	24.7%	10.2%
65+ years	13.8%	12.5%	24.4%

Source: ABS, PVA(WA) Research

The 65+ age group was the fastest growing age group, while people aged 15-24 years experienced the lowest growth, thus highlighting the ageing population in Greater Perth.

2016 FAMILY STRUCTURE – GREATER PERTH

Source: ABS, PVA(WA) Research

The average number of persons per household is 2.6, which is the same as Western Australia and Australia in total. Family households account for 73.0% of all households, with 37.5% couple families without children; 46.3% couple families with children; 14.5% one parent families; and 1.8% other family structures. Of the single parent families, 82.1% are female and 17.9% are male.

DWELLINGS

Dwelling Structure

In 2016 there were 776,014 dwellings in Greater Perth, of which 85,730 were unoccupied (11.0%). This unoccupied proportion has increased from 9.6% in the 2011 Census and is in line with the national average of 11.2%. The number of occupied dwellings has increased by 10.1%, compared with an increase of 6.1% nationally. Of the occupied dwellings:

Source: ABS, PVA(WA) Research

Separate houses are the most prominent dwelling type (76.9%). The predominant growth in dwelling structure over the five year period is that of townhouses/semi-detached housing/terraces, which has grown from 9.1% of occupied dwellings to 16.0% between 2011 and 2016.

Source: ABS, PVA(WA) Research

The most prominent number of bedrooms is four or more (45.2%), and the average number of bedrooms per dwelling remained the same over the five years to 2016 at 3.3.

Source: ABS, PVA(WA) Research

The most prominent tenure type is owned with mortgage (41.9%). The number of dwellings owned with a mortgage has increased since 2011 by 15.9%.

INCOMES

The following table shows median weekly income levels in 2016, which in Greater Perth are higher than both state and national averages.

Median Weekly Incomes

	Greater Perth	Western Australia	Australia
Personal	$728	$724	$662
Family	$1,955	$1,910	$1,734
Household	$1,643	$1,595	$1,438

Source: ABS, PVA(WA) Research

While the median incomes in Greater Perth are still higher than national median incomes, growth has been slower than Australia as a whole since 2011. Personal, family and household incomes increased by 8.8%, 9.8% and 12.6% respectively in Greater Perth, and by 14.7%, 17.1% and 16.5% nationally.

For more information on the 2016 Census results go to ABS Census 2016.

Gavin Chapman – Managing Director
gavin.chapman@pvawa.com.au
(08) 6500 3600

Property Valuation & Advisory (WA)

Unit 2, 168 Stirling Highway, Nedlands WA 6009

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New Super Laws July 2017 How this may affect you

Superannuation Law Changes 1 July 2017

Legislation was recently passed that may affect superannuation for you or some of your clients, and this will come into effect from 1 July 2017. This could mean that important decisions need to be made in the lead up to 30 June.

Changes include, but are not limited to:

A $1.6 million superannuation transfer balance cap (from your accumulation phase superannuation account to a tax-free ‘retirement phase’ account)
Lowering non-concessional contribution cap to $100,000 per annum
Lowering the concessional contributions cap to $25,000 per annum

What is the $1.6 million transfer balance cap?

With effect from 1 July 2017, the amount of superannuation that an individual can transfer from their accumulation account into a tax-free retirement account will be capped at $1.6 million. This will apply to both current retirees and individuals yet to enter their retirement phase.

What does this mean for individuals with more than $1.6 million?

If a fund has, or expects to have, more than $1.6 million in pension phase at 1 July 2017, the fund may need to start planning to implement some decisions prior to this date. This could mean withdrawing funds or transferring the balance greater than $1.6 million into an accumulation phase super account, and potentially accumulating capital gains. Your tax accountant or financial advisor would be the best person to help you with this decision.

Reducing Capital Gains Tax (CGT)

If the superannuation fund is a self managed super fund (SMSF) in retirement phase, and the $1.6 million cap affects it, the fund may be eligible for CGT relief. This would involve resetting the value of the cost base of an asset owned by the fund to market value as at 1 July 2017, and if this base is higher than the original cost base, it could potentially reduce the amount of capital gains paid if assets are sold at a future date.

In order to reset the value of an asset, a valuation as at 1 July 2017 would need to be conducted. In addition, it is the responsibility of the SMSF trustee to submit an application to the ATO within a specified time frame.

The ATO states:

and

“The valuation process should be adequately documented; if it isn’t, we may not accept the resulting value as a market value.”

Market Value for Tax Purposes: Read more

There are many factors which need to be taken into account in deciding the best course of action regarding the new superannuation laws, and there are specific eligibility requirements which need to be met in order to qualify for CGT relief. Seeking CGT relief requires careful thought, and we recommend that advice is sought from a financial advisor and/or tax accountant before making or acting on any decisions.

Our team of valuers at Property Valuation & Advisory have extensive experience in the valuation of property assets. Please contact us if you would like more information, or to discuss a valuation requirement.

Gavin Chapman – Managing Director
gavin.chapman@pvawa.com.au
(08) 6500 3600

Property Valuation & Advisory (WA)

Unit 2, 168 Stirling Highway, Nedlands WA 6009

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Perth Industrial Market – May 2017

The contraction in the resources sector continues to negatively impact the WA economy and Industrial properties in Perth, with the market characterised by increasing vacancies, declining rents and constrained land supply.

Rents have softened in all sectors of the market over the last three years, with falls of between 20% and 30% evident. Further falls are expected over the next year or two.
Incentives in all sectors of the market have increased marginally over the past year, although in general owners of industrial properties in Western Australia are more willing to accept lower rents rather than offer higher incentives.

Perth Rental Indicators - March 2017 quarter

	Net Face rents ($/m2)		Incentives (%)
	Prime	Secondary	Prime	Secondary
Inner North	110 – 130	75 – 115	5 – 10	5 – 15
Outer North	75 – 95	65 – 85	10 – 15	10 – 15
Inner South	95 – 115	75 – 95	5 – 10	5 – 15
Outer South	75 – 95	65 – 85	10 – 15	10 – 15
Inner East	90 – 110	75 – 90	5 – 10	5 – 15
Outer East	70 – 95	65 – 90	10 – 15	10 – 15

Source: ABS, PVA(WA) Research

Yields have stabilised or firmed slightly throughout the past two years on the back of higher vacancies, increasing incentives and generally subdued market conditions. However, the divergence between prime and secondary markets remains, based on the primary market drivers of quality, location, and lease covenant.

Perth Industrial Market Yields (%) - March 2017 Quarter

	Prime	Secondary
Inner North	110 – 130	75 – 115
Outer North	75 – 95	65 – 85
Inner South	95 – 115	75 – 95
Outer South	75 – 95	65 – 85
Inner East	90 – 110	75 – 90
Outer East	70 – 95	65 – 90

Source: ABS, PVA(WA) Research

We expect yields to remain stable for the remainder of 2017.

There are a number of metropolitan infrastructure and development projects underway or proposed in the Perth area which are likely to continue to support the industrial market, such as Forrestfield Airport Link; and Northlink WA. Completion of the Northlink WA project is expected in 2019, opening up a new industrial precinct in the Bullsbrook area which will support the transport industry, particularly related to the north-west mining, oil and gas markets.

Work on the Perth Freight Link (Roe 8) has been suspended following the election of the Labour Government in March 2017. $1.2 billion of Federal funding previously allocated to this project will be redirected to the Perth Freight Link and to an extension of the Joondalup train line to Yanchep.

For further details please contact:

Gavin Chapman - Managing Director
gavin.chapman@pvawa.com.au
(08) 6500 3600

Property Valuation & Advisory (WA)

Unit 2, 168 Stirling Highway, Nedlands WA 6009

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Market Overview – Perth Residential Apartment

Perth Residential Apartment Market Overview

Market Overview – Perth CBD Office Market – February 2019

Perth CBD Office Market Snapshot

Market Overview – Perth Office Market – July 2018

Perth Office Market Overview

Market Overview – Perth Residential Market

Perth Residential Market Overview

Valuer & Director of PVAWA Gordon Jeanes Has Retired

New Superannuation Laws July 2017 Valuation of your property assets

New Superannuation Laws July 2017
Valuation of your property assets

Annual Rating & Land Tax Assessment – July 2017

Annual Rating & Land Tax Assessment – July 2017

2016 Census analysis for Greater Perth – July 2017

2016 POPULATION – GREATER PERTH

2016 FAMILY STRUCTURE – GREATER PERTH

DWELLINGS

INCOMES

New Super Laws July 2017 How this may affect you

Superannuation Law Changes 1 July 2017

Perth Industrial Market – May 2017

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