2. Sydney Housing Market - Current State and Future Prospects August 2011 Dr Andrew Wilson - Senior Economist www.apm.com.au www.homepriceguide.com.au

3. www.apm.com.au www.homepriceguide.com.au Who is APM and What Does it Do? 20 Years experience as a leading Australian property price information and market intelligence provider to consumers, property professionals, banks, government and the media. APM assists its customers to make better informed decisions about residential property and the property market.

4. www.apm.com.au www.homepriceguide.com.au House Price Index – Major Capitals

5. www.apm.com.au www.homepriceguide.com.au Major Capitals – 11 year House Price Performance 200% increase all capitals – Sydney 100% Sydney prices flat 2004-2009 Perth prices boom 2005-2006 Mini prices boom in Brisbane 2007 National prices surge 2009-2010 –Melbourne rises 29% in a year

6. www.apm.com.au www.homepriceguide.com.au 2009 Market Stimulus – First Home Owners Grant Boost

7. www.apm.com.au www.homepriceguide.com.au 2010 Affordability Collapses - Strong Price and Interest Rate Rises

8. www.apm.com.au www.homepriceguide.com.au House Price Relativities – Major Capitals May Quarter 2011

9. www.apm.com.au www.homepriceguide.com.au Housing Affordability – Major Capitals Median House Prices $1 Million +

10. www.apm.com.au www.homepriceguide.com.au House Rental Market – Major Capitals Quarterly Weekly Asking Rents

11. www.apm.com.au www.homepriceguide.com.au House Rental Relativities – Major Capitals May Quarter 2011

12. www.apm.com.au www.homepriceguide.com.au Housing Supply – Major Capitals

13. www.apm.com.au www.homepriceguide.com.au Housing Supply – Major States March Quarter 2011

14. www.apm.com.au www.homepriceguide.com.au ABS Household Growth – Major Capitals 2007-2011

15. www.apm.com.au www.homepriceguide.com.au Economic Growth – Major Capitals Quarterly ABS Unemployment Rate

16. www.apm.com.au www.homepriceguide.com.au Economic Growth – Major Capitals June ABS Unemployment Rate

17. www.apm.com.au www.homepriceguide.com.au Major Capitals 2011-12 Housing Market Prospects Generally –Economic growth to accelerate fuelled by resources boom – $300 billion projects in pipeline –Prospect of full employment and skilled labour shortages –Upward pressure on wages –Mixed sector performance and moderate inflation - interest rates on hold –Population increases fuelled by higher immigration –High AUD implications for some regions –Shortage of supply to continue in most areas

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

19. www.apm.com.au www.homepriceguide.com.au Sydney Suburban Markets

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

21. www.apm.com.au www.homepriceguide.com.au Sydney Regions – 6 Monthly Sales Growth

22. www.apm.com.au www.homepriceguide.com.au Sydney Regions – Average Sale Price 6 Months to June 30 2011

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

24. www.apm.com.au www.homepriceguide.com.au Sydney’s West – Most Popular Suburbs

25. www.apm.com.au www.homepriceguide.com.au Sydney’s West – Most Popular Suburbs Median House Prices

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

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

28. www.apm.com.au www.homepriceguide.com.au Australian Housing Market Analysis If you require any further information regarding Australian housing market analysis I may be contacted by email at andrewwilson@apm.com.au or phone 02 8596 4580andrewwilson@apm.com.au