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In early 2010 the effects of the Global Financial Crisis set in motion an upturn in both the inner-Sydney and inner-Melbourne apartment markets. The lower level of construction instigated by the GFC in the latter half of 2008 constrained new apartment completions in both markets. This further tightened rental markets, which, together with the post-GFC fall in prices in 2008-09, resulted in rents and yields rising.
As the economic outlook improved over 2009-/10 (and alternative investment forms such as equities remained weak) investors began to flood the inner-Melbourne apartment market. Investor demand in Sydney also improved, albeit at a more modest rate.
Given the resultant increase in the pipeline of supply, BIS Shrapnel is asking if the conditions in the inner-city apartment markets remain conducive for the upturn in Melbourne to be sustained, and to create a further upside in Sydney.
In answering this question, analysis of the population profile of inner city apartment occupants is relevant. Looking at census data for occupants of inner-city apartments in both Sydney and Melbourne indicates the large majority can be divided into three categories:
<ul>
<li>Students, with the growth mainly coming from overseas students.</li>
<li>Young professionals, who are typically employed in white-collar occupations in the CBD or CBD fringe locations.</li>
<li>Empty nesters, such as older singles or couples without children living in the family home.</li>
</ul>
The first two groups largely create demand for apartments as tenants, while empty nesters are typically owner-occupiers.
Demand for apartments from young professionals experienced a brief setback during the GFC as employment in the financial sector declined. However, this rebounded quickly as the recovery came through.
Student demand has weakened, although most of the reduction in overseas student numbers has taken place in the vocational education sector. Student commencements in the university sector have experienced a more moderate decline and, with major university institutions located close to the Sydney and Melbourne CBDs, the softening in student demand has been less pronounced. Consequently, tenant demand has remained relatively solid.
However, although off-the-plan sales have shown a post-GFC recovery, actual new apartment completions have fallen. The long lead time for an off-the-plan sale to result in an apartment completion means the effects of the GFC are still impacting new apartment supply. Apartment completions experienced a setback in Sydney in 2010/11, while in Melbourne the setback was seen a year earlier in 2009/10. (See Figure 1)
Given projects in the development pipeline – those that are currently under construction or on track to proceed shortly – will take some time to reach completion, new supply in 2011/12 will remain below the long term average in Sydney, and only just above the long term average in Melbourne. This will not be high enough to create a significant impact on vacancy rates, and the environment for pre-sales from this perspective will still remain relatively positive in 2011/12, particularly if the economic environment and confidence improves.
The challenge will emerge from 2012-13, as new apartment completions will rise well above the long term average in both Sydney and Melbourne, and this is where differences will occur across the cities.
 
Figure 1: Apartment completions, Inner Sydney and Inner Melbourne.
History and those in the pipeline
<img src="/images/stories/bisjuly20.gif">Source: BIS Shrapnel
The pipeline in inner Melbourne is much larger. Off-the-plan sales to investors have been much higher in Melbourne over 2009-10 and 2010-11. This has been driven by tight rental markets, but also the solid residential price growth during 2009-10. With most of these sales located in large scale high-rise projects, the completion pipeline extends not just into 2012-13, but also 2013-14. Indeed, apartment completions in Melbourne in 2013-14 are expected to reach a record level. This is based only on those projects that are already under construction or set to commence and could be higher if additional projects achieve enough pre-sales to proceed. 
The sustained high level of apartment completions will create pressure on vacancy rates and rental growth in inner Melbourne from 2012-13. While there could be pent-up rental demand still to be absorbed after years of undersupply during 2007 to 2011, this is not likely to be the case by 2013-14. With a possibility of oversupply, vacancy rates in Melbourne are likely to rise, with falls coming through in rents and, potentially, prices.
In contrast, new apartment completions in inner Sydney will have remained well below the long run average between 2005-06 and 2011-12. While recent pre-sales are underpinning a sharp increase in new apartment completions in 2012-13, we do not anticipate it will have a significant impact on vacancy rates. This is mainly due to the substantial latent demand created by the low construction of the previous years. As a result, further solid rental growth in Sydney is expected to come through, particularly with employment and income growth anticipated to pick up pace over 2011-12 and 2012-13.
At this stage, if only current projects under construction and those on track to proceed make it through to completion, supply of apartments in Sydney is projected to fall in 2013-14. However, further off-the-plan sales will result in more projects coming through to provide some upside to completions for the year.
Finally, unless a substantial increase in new supply comes through, it is likely that new apartment supply in inner Sydney will remain in deficiency. This will continue to maintain pressure on rentals and result in upward pressure on prices over the next two to three years.
Angie Zigomanis is senior manager of <a href="https://www.bis.com.au/" title="BIS Shrapnel" target="_blank">BIS Shrapnel.</a>
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angiezigomanis-VT64gGbExQ

A tale of two cities: The challenges of the Melbourne and Sydney apartment markets

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First-home buyers represent a key driver of the residential market, underpinning demand for entry-level dwellings, which in turn creates increased demand across the market. While first-home buyers have averaged only 16% of finance for residential property over the last 20 years, they have a disproportionate impact on turnover activity and consequently prices.
While the focus on the reasons for the decline in first-home buyer demand in the media has been on the impact of the rises in interest rates over 2009-10 on affordability, the majority of the decline has been due to the demand brought forward by the First Home Owner’s Grant Boost Scheme. Total loans to first-home buyers have averaged around 130,000 per annum over the last five years. However, loans to first-home buyers rose to 190,000 in calendar 2009 during the operation of the boost.
As the pool of potential first-home buyers is finite at around the 130,000 per annum level, it means that a future demand of around 60,000 first-home buyers had been brought forward to take advantage of the boost. With about 90,000 to 95,000 loans to first-home buyers expected over each of 2010 and 2011, this “pull forward” effect has now largely been exhausted, and demand from first home buyers should slowly return back to underlying average levels.
This is highlighted in Chart I, which shows a comparison of year-on-year growth in loans to first home buyers after the original First Home Owner’s Grant Scheme was increased from $7,000 to $14,000 in March 2001, compared with lending after the First Home Owner’s Grant Boost Scheme was introduced in October 2008. From a timing perspective the grants were in place for a similar period, being in place for around 16 and 15 months respectively.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/angie1.gif"><img src="/images/stories/angie1thumb.gif"></a>
Interestingly, the trend in first-home buyer activity has been almost identical when comparing the recent boost scheme with the initial first-home owner’s grant. Substantial first-home buyer activity was brought forward to take advantage of the grants while they were in place. This created a subsequent “hole” in first-home buyer demand over the following two year period.
As indicated by the red line reflecting the impact of the most recent boost, first-home buyer activity is now showing year-on-year growth – despite the weaker overall economic conditions in 2011 compared with 2010. In comparison, at a similar point in time after the original first-home owner’s grant (February 2004), there was a setback in first-home buyer demand. However, conditions were different. Where interest rates are now declining, the market in February 2004 had experienced a 25-basis-point rise in interest rates in each of November and December 2003. As a result, there was a pause in first-home buyer demand for about six months before growth in activity again resumed (the next rise in interest rates was to be in March 2005. Consequently, with a benign interest rate environment anticipated over 2012, we anticipate that first-home buyer demand will continue to recover, and by the end of 2012 monthly first-home buyer demand should be reflecting the underlying level of around 130,000 loans per annum.
Healthy first-home buyer demand is important from a turnover and price perspective. Without demand for entry level properties, the impetus for demand from changeover buyers (i.e. upgraders and downsizers) is reduced as they usually have the option of staying in their existing dwelling and sitting out of the market when demand is weak. Similarly, investors can also sit out of the market when conditions aren’t conducive.
Most first-home buyers, on the other hand, are not able to postpone a purchase indefinitely. They will ultimately reach a life stage where they move into the market as purchasers. Those who can’t purchase their desired dwelling at the time will make a trade off by purchasing a smaller dwelling in their desired location, or purchasing in a more affordable location.
Consequently, it is often the movement in first-home buyer demand that creates the flow-on effects in demand across the rest of the market. This is highlighted in chart II. The increase in first-home buyer demand created by the boost scheme resulted in a subsequent rise in changeover activity. Given the much larger number of changeover buyers in the market, the percentage increase in changeover activity was lower, although still substantial – as highlighted by a comparison with the growth in changeover buyers that occurred in 2007 before the beginning of the GFC. Conversely, the fall-off in first-home buyer demand after the boost scheme expired has also resulted in a fall-off in changeover activity that is now stabilising as first-home buyer demand improves.
 
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<a title="Click to enlarge" rel="shadowbox" href="/images/stories/angie2.gif"><img src="/images/stories/angie2thumb.gif"></a>


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Investor demand also coincided with the rise in first-home buyer demand over 2009. However, investor demand is not dependent on owner-occupier demand, with investors able to make purchases at their discretion. While investment fundamentals such as rental growth and yields will also influence investor demand, the prospect for capital growth is by far the key driver of investor demand. It was the rise in prices in 2009 and early 2010 that underpinned the rise in investor demand, and in an environment where prices have been declining over 2011, investor demand has been weakening.
As a result, the recovery in first home buyer demand will have a positive impact on price growth. As highlighted in chart III, there is a strong correlation between turnover activity (as indicated in the table by owner occupier lending for established dwellings) and median house price growth. Periods of rising turnover have corresponded with rising price growth, while weaker activity results in weaker price performance. In recent months, the tapering off in the decline in turnover activity has corresponded with a slowing in the rate of decline in median house prices.
Click to enlarge
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Consequently, in contrast to current concerns about price falls continuing, BIS Shrapnel’s view is that the recovery in first home buyer demand will facilitate the recovery in the housing market. Prices have now either bottomed out or should bottom out in the next few months and – barring any major shock on the overseas front – we will see the rising volume of activity will translate to a return of price growth 2012. Turnover will return to growth through 2012 as the recovery in first-home buyer demand gains momentum (although it could take a little longer in New South Wales given its recent changes to first-home buyer stamp duty exemptions) and flows through to changeover demand and increased activity across the market. The turnaround in price expectations will also drive stronger investor demand through 2012, which in turn will facilitate greater turnover.
As first-home buyer demand returns to underlying levels by the end of the year, price growth will strengthen and pick up further in 2013, particularly with our expectation of an improved economic outlook. The increased activity for existing dwellings will also allow upgraders to trade up into new houses and drive a recovery in new house commencements. Nevertheless, despite the expectation of a recovery in the market, the prospects for substantial rises in prices will be constrained by current strained affordability. In those markets in oversupply or close to balance, it means that the current price declines will halt, with only minimal growth coming through, while in those markets where there is a rising deficiency, price growth is expected to be stronger, although still only moderate (mid-single-digit growth per annum).
Angie Zigomanis is senior manager of <a href="https://www.bis.com.au/" title="BIS Shrapnel" target="_blank">BIS Shrapnel.</a>
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First-home buyers to drive 2012 housing price recovery: BIS Shrapnel's Angie Zigomanis

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When the Australian Bureau of Statistics recently published its Preliminary Rebased 2011 Estimated Resident Population (ERP), much of the media attention was on the 294,000-person difference in the ABS’s earlier estimates of the population (based on a 2006 census base) and the revised number based on the results of the 2011 census. This difference between the previous estimate and the new rebased number is known as the intercensal error.
However, this does not mean that the growth between 2006 and 2011 was 294,000 persons fewer than the ABS originally indicated. A change by the ABS to a more accurate methodology in undertaking its post-census survey to clarify unrecorded census data suggests that the method used in the previous census overstated the population by about 247,000 persons at the 2006 census. As a result, the actual magnitude of the intercensal error between 2006 and 2011 is likely to be much lower than that suggested by the 2006 and 2011 census counts.
For forecasters such as BIS Shrapnel, who use population growth data in estimating household formation and consequently the underlying demand for new dwellings, an accurate measure of the population is important in determining whether there is an underlying undersupply or oversupply of dwellings. This in turn drives our forecasts for new dwelling construction and prices.
At face value, the downward revision to the June 2011 population would imply much lower growth between 2006 and 2011, leading to lower demand for dwellings and therefore a lower undersupply (or higher oversupply) of dwellings. However, there is more to the numbers than meets the eye, and a description can be found in the technical notes section of the ABS’s Australian Demographic Statistics publication (Cat 3101.0).
In calculating the ERP, the ABS starts with the census count at the person’s location on census night and then places them back to their usual address. The ABS also undertakes a post-enumeration survey (PES) to determine the level at which population was missed or counted more than once. Typically, more people are missed than double counted, so this is called the undercount and is added to the population enumerated on census night.
The technical notes highlight that due to a more effective method (automated data linking or ADL) in conducting the 2011 census PES, the net undercount was 374,500 persons in the 2011 census. This compares with an undercount of 549,600 persons at the 2006 census, suggesting that the previous method overstated the undercount in the 2006 census, and by extension overstated the ERP in 2006.
A statistical impact study by the ABS took a sample of PES records of the 2011 census and processed them using the 2006 method in order to compare the impact on the undercount using the 2011 ADL method. While there were some other changes between the 2006 and 2011 census that also made a minor difference, the result suggested that the undercount measured by the 2011 ADL method was around 247,000 persons (subject to the standard error of the sample) below that using the 2006 method.
This would indicate that the impact of the new ADL method accounts for around 247,000 persons of the 294,000-person intercensal error, and that the actual intercensal error assuming a consistent PES methodology is in the order of 47,000 persons. Consequently, rather than being out by 294,000 persons in the estimate of population growth between 2006 and 2011, the error is only 47,000 persons, with the other 247,000 being accounted for by a lower actual figure in 2006 due to the overestimation of the census undercount. 
 
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The chart below shows a comparison of the population growth line based on the ABS estimate of population between 2006 and 2011 before the 2011 population was rebased after the census, and population if the 2006 census population estimate was also rebased.
<img src="/images/stories/2012/09/bissept17.png" width="470">
Using a consistent PES method, the rebased population growth between 2006 and 2011 was 1.75% per annum, compared with the initially calculated growth of 1.79% per annum using the 2006 census base. This compares with the lower 1.52% per annum based on the overstated 2006 population using the previous PES method and more correct 2011 population.
As a result the much lower preliminary rebased ERP for 2011 has had limited impact on BIS Shrapnel’s calculated demand/supply balance across the states. Despite the overestimation of the population at 2006, the number of households (in our case defined as the number of occupier dwellings) was not affected as it is derived from a physical census count.
With all but 47,000 of the ABS’s estimated population growth between 2006 and 2011 still coming through, total household formation (and therefore underlying demand) will have only been slightly below that estimated due to the lower estimated population growth, with the end result being that the national deficiency at June will not be significantly lower than originally indicated.
It should also be noted that the intercensal error was concentrated in New South Wales, Victoria, Queensland and South Australia – i.e. population growth was lower than originally indicated in these states. This also suggests that population growth between 2006 and 2011 in the other states and territories was actually close to, or slightly higher than<ins cite="mailto:Martin%20Bregozzo">,</ins> that originally estimated.
With the 2011 data on population and households now available, BIS Shrapnel has re-examined the new household formation rates coming through over the 2006 to 2011 censuses. The revised household formation rates suggest that the dwelling demand/supply balance at June 2011 was similar to that outlined earlier this year in our Residential Property Prospects and Building in Australia reports, with New South Wales in deficiency (although at a lower level than originally estimated) and most other states close to balance or slight oversupply. We estimated that Victoria was also in deficiency (although declining quickly) at June 2011, although the revision indicates that the market was close to balance in 2011 and have moved into an underlying oversupply in 2011-12.
Angie Zigomanis is senior manager of <a title="BIS Shrapnel" href="https://www.bis.com.au/" target="_blank">BIS Shrapnel.</a>
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The case of the missing 294,000 missing Australians

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Angie Zigomanis, senior manager of BIS Shrapnel: 
There have been several reports on the number of households as reported by the Australian Bureau of Statistics 2011 census in relation to estimating the number of households nationwide. The most commonly reported number of households reported is 7.8 million.
Researchers and analysts have been using this number as a justification or otherwise of claims that the housing market is in undersuply are legitimate. However, a pure count of households or occupied dwellings in itself doesn't say much at all. A count of households and occupied dwellings just tells you that one equals the other. Therefore it doesn’t measure whether there is any underlying undersupply. However, an oversupply can be measured if there are a rising number of unoccupied dwellings.
Some analysts compare their count of the number of households with the National Housing Supply Council estimate of the underlying level of households to provide evidence that the market is in oversupply. The 7.8 million households at the census normally bandied about by commentators compares with the National Housing Supply Council underlying figure of 8.8 million households to imply the NHSC overstated households at 2011 by 1 million, and therefore its estimate of undersupply was actually an excess.
However, a closer look at the 7.8 million households quoted by most industry commentators shows that this figure is just plain wrong. This is the result of these commentators plucking a headline figure from the census data without taking a closer look at the numbers behind the numbers.
When looking at household numbers to determine demand, the number of households will equate to the number of occupied dwellings – i.e. when a household is created it needs to occupy a dwelling. However, the figure that most commentators refer to for the number of households falls well short of the number of occupied dwellings on census night. To find this figure, we need to examine the census data based on place of enumeration.
The place of enumeration count is the physical count of all households in the dwellings where they were counted on census night. This shows that there were 7.8 million households nationally. However, this actually only refers to the households for which they have obtained household structure information. There are two other categories of households occupying dwellings that have not been accounted for. These are "not stated" households and "visitor only" households.
“Not stated” households are dwellings where the census collector has confirmed that someone was present, but was not able to get a completed census form to confirm the household structure. This happens across all dwelling types but is most prevalent in high-rise apartment buildings, where it is difficult to access the dwellings to drop off and pick up the forms (which is why the internet was introduced as a means of filling out the forms). While the type of household has not been confirmed, there is nevertheless a household in the dwelling. There were 279,000 “not stated” households on census night across Australia.
“Visitor only” households are households where all the occupants are not at their usual place of dwelling. This could be overseas visitor households (but not necessarily short- term holiday households), dwellings where the occupant might be away for work, households that were at their holiday house on census night, etc. While not permanently living at the dwelling, they nevertheless reflect demand for dwellings as there will always be a component of the population occupying and requiring a dwelling on this basis. There were 143,000 “visitor only” households on census night.
When comparing households over time, a further adjustment can be made in 2011 for persons who were overseas on holidays. The high Australian dollar has meant that a greater proportion of Australians were overseas on census night. At the 2001 and 2006 census, around 1.7% of Australians were recorded as being temporarily overseas on census night. However, on the 2011 census night, around 2.1% of residents were temporarily overseas. Based on the 2011 population, this reflects an extra 100,000 or so persons, or around 40,000 additional households that weren't counted. Remember that the household count reflects the physical count of occupied dwellings on census night, so the dwelling would have been recorded as empty. Conversely, subtracting these households from the unoccupied dwelling count reduces the unoccupied dwellings from equivalent to 11.4% of households to 10.8% of households, which is below the 11% of households at the 2006 census – another indicator of a tightening market over the last five years.
Adding all of these components – 7.76 million households counted, 279,000 “not stated” households, 143,000 “visitor only” households, and an allowance for an extra 40,000 households being on an overseas holiday on census night than there would normally be – provides a total houshold count, and therefore occupied dwelling count, of 8.22 million occupied dwellings.
This is still well below the NHSC underlying household count of 8.8 million households in its most recent State of Supply report (although closer to BIS Shrapnel’s pre-census figure of 8.3 million that was used to calculate the underlying stock deficiency in the June 2012 editions of our Residential Property Prospects and Building in Australia reports). However, it should be remembered that the NHSC figure (and BIS Shrapnel’s) is not an estimate of actual households, but an estimate of the underlying requirement for households, which is the number of households that would normally be expected in an unconstrained environment – i.e. under normal dwelling supply and affordability circumstances.
BIS Shrapnel’s forecasts of households used in calculating underlying demand are based on trends over time in household formation rates across different age groups, which accounts for changes in demographic trends as well as the likely impact of housing affordability constraints on household formation. In many states it is assumed that the reduction in household formation between 2006 and 2011 due to a deterioration of affordability (both owning and renting) has now become permanent and is unlikely to recover in the foreseeable future. This then places most of the states at, or close to balance, in most states.
Based on the 2011 census data, BIS Shrapnel’s estimate of the deficiency at June 2011 is 37,000 dwellings, concentrated in New South Wales, where the number of households appears lower than it otherwise would be (than explained by prevailing trends in household formation rates) due to people being forced to squeeze into the existing dwelling stock.
A national deficiency of 37,000 dwellings at 2011 was insufficient to drive any upturn in dwelling construction in 2011-12. However, declining new dwelling completions, even at the lower level of new household formation rates derived from the 2011 census, have fallen below underlying demand in 2011-12, and a rising deficiency is now emerging. As the deficiency continues to rise, it will first be seen in vacancy rates (already evident in Brisbane and Perth), before flowing through to rental growth, construction, and some level of price growth.
Angie Zigomanis is senior manager of <a title="BIS Shrapnel" href="https://www.bis.com.au/" target="_blank">BIS Shrapnel.</a>
 
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Michael Matusik, founder of Matusik Property Insights:
So, does Australia have too few, too many, or is the situation just about right?
I am talking about new dwellings.
I have been arguing for some time that one of the biggest real estate myths in this country is that the new housing market is undersupplied; and often this situation is described with words such as “massive”, “chronic” or “enormous”.
But is it true?  As followers of the Matusik Missive know, I have tried to prove that it is false and with, for mine, with quite a degree of finesse.  Yeah, like a bull in a china shop.
Anyway, each year I like to go back and check the numbers.  And last week’s annual check-up has found that Australia continues to build more dwellings than we need.  A few years back – in 2008-09 – not enough new homes were being built, but in recent years, and despite the constant calls from the building industry for stimulus to help create even more new dwellings, we have been building too many.
In the 2009 financial year, Australia needed to build 167,000 new dwellings, yet only 131,000 or thereabouts were commenced.  However, in 2010 (all years in this post are financial ones), the supply-demand balance reversed, with just 121,000 new homes needed, yet 167,000 actually commenced construction.  During 2011 the industry continued to build far more homes than what was actually needed, to the tune of about 47,650 too many.
The good news is that the rate of overbuilding has slowed down over the last 12 months, with 137,000 new dwellings needed during 2011-12 and with 139,000 actually supplied.
However, dwelling supply (we are talking about actual commencements here and not approvals) is cumulative and since the GFC, Australia has built about 60,000 more new dwellings than it really needed.
Nationwide, we are currently oversupplied with new digs to the tune of about five months, based on current underlying demand.  In short, we could, as a nation, stop building for several months and still have enough new homes to fulfil our needs.
But of course, there are always swings and roundabouts.
Several states and territories are undersupplied, some are chronically oversupplied – I just had to get that in – while others have way too much stock.
Major oversupplies now exist in Victoria; South Australia, Tasmania and the ACT.
Since 2009, Victoria has created 69,000 (yes 69,000 – that’s five digits with a six at the front!) too many new dwellings.  This represents about a two-year oversupply based on the current annual underlying demand for 34,000 new dwellings across the state.
South Australia has built 18,000 too many new homes, but with a need to just build about 6,000 new dwellings per year, South Australia really shouldn’t need to build a new home for years, well close to three, in fact.
There are 6,000 too many dwellings built or being built in Canberra.  This equates to 30 months of supply.  And poor Tassie has also overbuilt, and also in the high 4,000 range.  But Tasmania’s situation is further exacerbated by its declining population growth.  Based on a continuation of last year’s paltry population increase of 1,000 people, Tassie’s 4,800 overbuild represents close to nine years of demand.  Now might be a good time to steal a new property on the Apple Isle.
The Northern Territory is now also oversupplied, with 350 too many dwellings created in recent years.  The demand for new homes in the territory is limited (at about 800 per annum), so this paltry 350 over-hang represents six month’s demand.
In stark contrast, New South Wales hasn’t been building enough new stock – no surprise there – but the undersupply is to the tune of 13,000 or about five months of current demand.
Western Australia is also undersupplied by about 23,000 dwellings at present, which equates to about a nine-month demand.
Finally, Queensland has a new dwelling short-fall of 2,800 or two weeks of undersupply.
Last year’s statistics, however, suggest that Queensland is now heading towards a massive undersupply, with 33,000 new dwellings needed during 2012, yet just 26,000 supplied – an undersupply in the tune of about 20%.
Let’s hope the Newman government’s recent $15,000 first-home buyers' grant for new construction kicks some arse.  But for mine, it will not deliver the spanking it was intended to.
Michael Matusik is the founder of <a href="https://www.matusik.com.au/" target="_blank">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.  Read <a title="blocked::https://www.matusikmissive.wordpress.com /" href="https://www.matusikmissive.com.au/" target="_blank">Michael's blog</a> or follow him on <a href="https://www.twitter.com/michaelmatusik" target="_blank">Twitter</a> or connect via <a href="https://www.linkedin.com/in/michaelmatusik">LinkedIn</a>.
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Room for debate: Is Australia's housing market under or oversupplied?

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There have been several reports on the number of households as reported by the Australian Bureau of Statistics 2011 census in relation to estimating the number of households nationwide. The most commonly reported number of households reported is 7.8 million.
Researchers and analysts have been using this number as a justification or otherwise of claims that the housing market is in undersuply are legitimate. However, a pure count of households or occupied dwellings in itself doesn't say much at all. A count of households and occupied dwellings just tells you that one equals the other. Therefore it doesn’t measure whether there is any underlying undersupply. However, an oversupply can be measured if there are a rising number of unoccupied dwellings.
Some analysts compare their count of the number of households with the National Housing Supply Council estimate of the underlying level of households to provide evidence that the market is in oversupply. The 7.8 million households at the census normally bandied about by commentators compares with the National Housing Supply Council underlying figure of 8.8 million households to imply the NHSC overstated households at 2011 by 1 million, and therefore its estimate of undersupply was actually an excess.
However, a closer look at the 7.8 million households quoted by most industry commentators shows that this figure is just plain wrong. This is the result of these commentators plucking a headline figure from the census data without taking a closer look at the numbers behind the numbers.
When looking at household numbers to determine demand, the number of households will equate to the number of occupied dwellings – i.e. when a household is created it needs to occupy a dwelling. However, the figure that most commentators refer to for the number of households falls well short of the number of occupied dwellings on census night. To find this figure, we need to examine the census data based on place of enumeration.
The place of enumeration count is the physical count of all households in the dwellings where they were counted on census night. This shows that there were 7.8 million households nationally. However, this actually only refers to the households for which they have obtained household structure information. There are two other categories of households occupying dwellings that have not been accounted for. These are "not stated" households and "visitor only" households.
“Not stated” households are dwellings where the census collector has confirmed that someone was present, but was not able to get a completed census form to confirm the household structure. This happens across all dwelling types but is most prevalent in high-rise apartment buildings, where it is difficult to access the dwellings to drop off and pick up the forms (which is why the internet was introduced as a means of filling out the forms). While the type of household has not been confirmed, there is nevertheless a household in the dwelling. There were 279,000 “not stated” households on census night across Australia.
“Visitor only” households are households where all the occupants are not at their usual place of dwelling. This could be overseas visitor households (but not necessarily short- term holiday households), dwellings where the occupant might be away for work, households that were at their holiday house on census night, etc. While not permanently living at the dwelling, they nevertheless reflect demand for dwellings as there will always be a component of the population occupying and requiring a dwelling on this basis. There were 143,000 “visitor only” households on census night.
When comparing households over time, a further adjustment can be made in 2011 for persons who were overseas on holidays. The high Australian dollar has meant that a greater proportion of Australians were overseas on census night. At the 2001 and 2006 census, around 1.7% of Australians were recorded as being temporarily overseas on census night. However, on the 2011 census night, around 2.1% of residents were temporarily overseas. Based on the 2011 population, this reflects an extra 100,000 or so persons, or around 40,000 additional households that weren't counted. Remember that the household count reflects the physical count of occupied dwellings on census night, so the dwelling would have been recorded as empty. Conversely, subtracting these households from the unoccupied dwelling count reduces the unoccupied dwellings from equivalent to 11.4% of households to 10.8% of households, which is below the 11% of households at the 2006 census – another indicator of a tightening market over the last five years.
Adding all of these components – 7.76 million households counted, 279,000 “not stated” households, 143,000 “visitor only” households, and an allowance for an extra 40,000 households being on an overseas holiday on census night than there would normally be – provides a total houshold count, and therefore occupied dwelling count, of 8.22 million occupied dwellings.
This is still well below the NHSC underlying household count of 8.8 million households in its most recent State of Supply report (although closer to BIS Shrapnel’s pre-census figure of 8.3 million that was used to calculate the underlying stock deficiency in the June 2012 editions of our Residential Property Prospects and Building in Australia reports). However, it should be remembered that the NHSC figure (and BIS Shrapnel’s) is not an estimate of actual households, but an estimate of the underlying requirement for households, which is the number of households that would normally be expected in an unconstrained environment – i.e. under normal dwelling supply and affordability circumstances.
BIS Shrapnel’s forecasts of households used in calculating underlying demand are based on trends over time in household formation rates across different age groups, which accounts for changes in demographic trends as well as the likely impact of housing affordability constraints on household formation. In many states it is assumed that the reduction in household formation between 2006 and 2011 due to a deterioration of affordability (both owning and renting) has now become permanent and is unlikely to recover in the foreseeable future. This then places most of the states at, or close to balance, in most states.
Based on the 2011 census data, BIS Shrapnel’s estimate of the deficiency at June 2011 is 37,000 dwellings, concentrated in New South Wales, where the number of households appears lower than it otherwise would be (than explained by prevailing trends in household formation rates) due to people being forced to squeeze into the existing dwelling stock.
A national deficiency of 37,000 dwellings at 2011 was insufficient to drive any upturn in dwelling construction in 2011-12. However, declining new dwelling completions, even at the lower level of new household formation rates derived from the 2011 census, have fallen below underlying demand in 2011-12, and a rising deficiency is now emerging. As the deficiency continues to rise, it will first be seen in vacancy rates (already evident in Brisbane and Perth), before flowing through to rental growth, construction, and some level of price growth.
 Angie Zigomanis is senior manager of <a title="BIS Shrapnel" href="https://www.bis.com.au/" target="_blank">BIS Shrapnel.</a>
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How the 2011 census shows Australia's housing market is undersupplied: BIS Shrapnel's Angie Zigomanis

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BIS Shrapnel is currently working through its Inner Brisbane Apartments 2012 to 2019 study, a look at the demand and supply prospects for the inner-Brisbane apartment market. A detailed picture of demand is required to determine whether the current supply pipeline can be met. Following are highlights of the inner-Brisbane apartment population using the newly released 2011 census data.
Occupants in inner-Brisbane apartments are heavily skewed into the young adult age groups, being dominated by those aged 20 to 39 years old. At the youngest end, many are likely to be students at tertiary institutions, while those who are older are typically employed in Brisbane CBD or CBD fringe locations.
The age profile of the apartment population has changed little between the 2006 and 2011 census, although the most prevalent age cohort increased from 20- to 24-year-olds to 25- to 29-year-olds. This suggests that some of the younger apartment occupants are remaining living in the inner city.
Age profile of apartment occupants, Inner Brisbane, 2006 and 2011
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<a href="/images/stories/2012/10/bisnov5.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/10/bisnov5thumb.gif"></a>
The inner-Brisbane apartment market is dominated by investors. At the 2011 census, 58% of apartments were owned by investors and were rented out. Some 11% were reported as unoccupied. While some of these unoccupied dwellings are vacant and available for rent or sale, or by occupants who were away on census night, the majority are likely to be “lock-up and leave” – apartments owned as a second home by an owner living elsewhere, or as a long-term speculative purchase.
Just under a third of apartments are owner-occupied (32%). The majority of these are apartments with a mortgage (being purchased) rather than fully owned.
Click to enlarge
<a href="/images/stories/2012/10/bisnov51.jpg" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/10/bisnov51thumb.jpg"></a>
The age profile differs according to tenure. Renters are likely to be younger, dominated by those aged 20 to 29 years old. Those aged 25 to 29 have the greatest prevalence in being purchased (with a mortgage) apartments, while there is also a higher prevalence of all age cohorts 30 to 64 years old in being purchased apartments than occupants in inner Brisbane overall. This would suggest that there is some element of renters moving through to owner occupation. Occupiers of fully owned apartments are dominated by those aged 55 years old and over, indicating empty-nester and retiree households.
Click to enlarge
<a href="/images/stories/2012/10/bisnov52.jpg" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/10/bisnov52thumb.jpg"></a>
Younger couple without children households, younger single-person households and group households comprise well over half of households in inner-Brisbane apartments. There has not been a major change in household structure between the 2006 and 2011 censuses, although only two household types have recorded an increase in their share of total households – younger couples without children and family households with children. Given the apparent propensity for the young adult population to remain in inner Brisbane, some component of the growth in share of family households with children could be coming from those forming families while living in inner-Brisbane apartments.
<a href="/images/stories/2012/10/bisnov53.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/10/bisnov53thumb.gif"></a>
An analysis of the 2011 census data indicates that full-time tertiary students comprise 17% of the inner-Brisbane apartment population. Most of the media focus on students living in inner-city apartments has been on overseas students.
While overseas students comprise the majority of tertiary students living in inner-Brisbane apartments, local, Australian-born students still make up a significant 38% of the full-time student population.
<a href="/images/stories/2012/10/bisnov54.jpg" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/10/bisnov54thumb.jpg"></a>
While the above provides a broad “top level” analysis of occupiers of inner-Brisbane apartments, the profile of demand varies across inner-Brisbane locations. The occupier profile of the CBD, Southbank/West End, Fortitude Valley, Bowen Hills, etc, regions differs widely and product has to be tailored to that demand. The identification of this localised demand, as well as it outlook for rents, prices and new dwelling activity, is one of the aims the upcoming BIS Shrapnel Inner Brisbane Apartments 2012 to 2019 study.
Angie Zigomanis is senior manager of <a target="_blank" href="https://www.bis.com.au/" title="BIS Shrapnel">BIS Shrapnel.</a>
 
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Inner-Brisbane apartment market dominated by investors with 20-something tenants

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Without knowing exactly the type of land <a href="https://www.prosper.org.au/2012/12/06/englobo-2/" target="_blank">Prosper</a> is referring to, I would say that the total land banks of the major developers (248,607 lots) does not reflect land that can be turned into vacant lots tomorrow.
Many are likely to be awaiting rezoning, planning approval, trunk infrastructure and services, etc, that have to be in place first before they can subdivide. As a result, the amount that can be brought to the market at any one time is likely to be much lower.
However, having said that, there is probably an argument, particularly in some corridors that a lack of competition and control of land releases is keeping prices up.
A land tax for zoned land may also encourage developers to turn over their land quicker if they are holding zoned land. If more land is forced onto the market in a corridor, then it could also result in price competition.
However, there could also be some unintended consequences.
For example, developers could delay seeking to rezone former cow paddocks to residential as late as possible to minimise the extra land tax. However, any additional delays in the planning process could mean that the land may not be zoned and ready when the market catches up, placing supply pressures in the local region and driving up prices anyway.
Additionally, if developers start building to a price and for speed rather than quality, then there may be lesser investment in product, environmental features, community infrastructure, etc.
The <a href="https://www.prosper.org.au/2012/12/06/englobo-2/" target="_blank">Prosper </a>article includes a link to an article from The Age with a reference from the chief operating officer of Delfin. He talks about the days when the number of competitors were too numerous to count, but the estates back in those days did not have the level of community investment of the larger estates you see nowadays.
Also, you would need to keep on top of other factors to prevent prices rising too far. At the end of the day, prices are governed by demand and supply, and the rate of supply needs to be able to meet the surges in demand.
This was part of the problem occuring during the boom in Perth in the middle of last decade. Initially, the rate of subdivision was able to keep up without large pressures on prices. However, as demand continued to increase and skills shortages emerged in planning, construction, etc, substantial delays began occurring that drove up prices despite the large level of zoned land that was available.
This also happened to some extent in late 2010 in Melbourne.
Therefore, at the administrative and construction end, you would need to guarantee a smooth process to ensure that land can be zoned and taken through the whole process quickly enough to meet the surges in demand.
There is also the issue of state and local government levies and infrastructure charges. These are charged to the developers who in turn pass them onto the purchasers and have also contributed to the increase in price of land over the past decade.
So the short answer is the concept of taxing zoned land to speed up development is likely to increase price competition and encourage further development of land.
On their argument, this would best work in areas where there are plenty of land holders to create competition, although it doesn't solve the problem where there is not enough competition in the corridor which would allow developers to just factor the land tax into their prices - i.e. a developer would balance their rate of sale to the market with the price they can achieve and the additional cost of the land tax in such a way as to maximise profits.
Even where there is competition, you would also need to ensure that the process of the delivery of the subdivided land is as smooth as possible so that the rate of development can be scaled up quickly enough to meet demand in an upturn without placing pressures on prices. In addition, in circumstances where developers are competing on price, it could impact on the type and quality of the product being offered.
Angie Zigomanis is senior manager of <a rel="nofollow" target="_blank" href="https://www.bis.com.au/" title="BIS Shrapnel">BIS Shrapnel.</a>
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Land tax would encourage developers to turn over land quicker but with unintended consequences: Angie Zigomanis

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"Not many of Sydney's design professionals seem at ease with the current prognosis for Pyrmont. It would seem that this may become an urban opportunity sacrificed to developers' profits, perhaps destined to become the slum of the next century.” 
Those in the property industry in the early 1990s would be familiar with the above sentiment outlined in “Tale of Two Cities: Planning a Great or Wasted Sydney” by Rollin Schlicht.
The article appeared in the Sydney Morning Herald in 1994 just as the inner Sydney apartment boom was taking off, and highlighted concerns about the depth of the market at the time.  It’s been around 20 years since the apartment boom first took off—enough time to see how closely this early prognosis for the Pyrmont market has eventuated.
BIS Shrapnel have been tracking the inner Sydney apartment market since its first study in 1997, when the start of the apartment construction market boom was well underway. Our most recent study, 'Inner Sydney Apartments 2013 to 2020', uses the latest 2011 Census data to profile the area. 
While the Pyrmont apartment market has gone through typical cycles in this time, Pyrmont (and the inner Sydney apartment market overall) has on average experienced solid overall demand in the last twenty years. Indeed, demand for apartments has broadened in this time.
The 1996 Census revealed that only 20% of apartments in Pyrmont were owner occupied (with the remainder largely investor owned), compared to 36% of apartments being owner occupied at the 2011 Census.
Nevertheless, the population profile of apartment residents in Pyrmont remains fairly narrow, and is concentrated among the young adult, typically professional, population.
In 1996, just over half (51.5%) of the population was aged 20 to 34 years old, and this was unchanged in 2011 (52.3%) – the major difference being that more are likely to remain in the inner city, given the rising percentage of owner occupiers. 
Median household incomes in Pyrmont have risen by 5.8% per annum between 1996 and 2011; similar to total Metropolitan Sydney – far from what you would expect from a “slum of the next century”. 
Meanwhile, the Pyrmont residential market itself has moved more or less in line with the Metropolitan Sydney market, with rents and prices showing solid long term rises. 
 Apartment rents in Pyrmont have averaged above inflation growth of 4.5% per annum between 1996 and the end of 2012, a little below the 5.2% per annum growth for total Sydney. 
Pyrmont’s median unit price has risen from $221,200 in 1995/96 to a preliminary $664,000 in 2012/13, a rise of 6.8% per annum, and just above growth in the Sydney median unit price of 6.6% per annum in the same period. 
 
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Contrary to perceptions at the start of the apartment construction boom in the mid 1990s, the positive performance of the Pyrmont and inner Sydney apartment market has been driven by various factors that were not immediately apparent at the time:
The rise in overseas student enrolments at Australian universities; globalisation of employment that has resulted in growth in overseas professionals employed in our cities; and changing lifestyle and dwelling preferences  that have seen the younger adult population more willing to live in smaller dwellings closer to employment and entertainment options. 
The result has been a growing population that has a preference for living in inner Sydney apartments, which has been able to sustain apartment occupancy despite the sizeable increase in the apartment stock.
Pyrmont has experienced a fourfold increase in its apartment stock from 2,300 apartments in 1996, to 9,500 apartments by 2013, while still maintaining solid occupancy and positive rent and price growth through this period. 
Although there will continue to be cycles, these drivers are expected to continue to underpin long term demand for inner Sydney apartments in the future.
In the short term the underbuilding of apartments in inner Sydney since the middle of the last decade has resulted in an underlying deficiency of apartments that is not expected to be fully eroded in the near future, despite the solid upturn we are now seeing in new apartment construction. 
The resulting rental growth will continue to attract more investors to the market.
This in turn should drive further solid price growth over the next two to three years, which in turn will drive greater off-the-plan purchases and additional supply. 
After averaging 2,500 apartment completions per annum over 1996/97 to 2005/06, apartment supply has fallen to around 1,600 new apartments per annum over 2006/07 to 2012/13.
While completions have picked up in 2012/13 and we expect them to average 2,800 per annum over the four years to 2016/17, there is still expected to be a small underlying deficiency by the end of this current round of construction.
Angie Zigomanis is senior manager of <a href="https://www.bis.com.au/" title="BIS Shrapnel" target="_blank" rel="nofollow">BIS Shrapnel.</a>
 
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Rental and price growth to drive more investors to Sydney inner city apartment market: BIS Shrapnel's Angie Zigomanis

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Owner occupiers represent a small but important component of the inner Brisbane apartment market. At the youngest end, they represent occupiers who could potentially be occupying greenfield development in the outer suburbs and thus helping to reduce the requirement for new infrastructure. Similarly, at those at the older end are likely to have freed up an existing established home for the next generation to move into.
As part of the preliminary work for our upcoming Inner Brisbane Apartments 2013 to 2020 report, we have taken a closer look at the actions of owner occupier purchasers by undertaking an analysis of two buildings that were built targeting different markets. Both buildings were marketed and completed in the early to mid 1990s, which allows us to identify long term trends.
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<li>
Admiralty Towers in Howard Street faces the Brisbane River and contains 152 apartments that were pitched at the investor end of the market.
</li>
<li>
The Moreton in the Dockside development is located in Kangaroo Point and also faces the Brisbane River, with 106 apartments and was pitched at higher price points, and presumably being more attractive to owner occupiers.
</li>
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Reflecting the market positioning of each building, a higher average pre-sale price was achieved at The Moreton, at $425,000 per apartment versus $377,000 per apartment at Admiralty Towers—although this could also reflect the mix of apartments and location as well as the size/quality of apartments.
An analysis of sales shows that despite the different price points, pre-sales were dominated by investors (which include second home purchasers) in both projects, who accounted for 75% of off the plan sales in The Moreton and as much as 84% of apartments in Admiralty Towers (see chart below).
Click to enlarge
<a title="Click to enlarge" href="/images/stories/2013/11/29/angie-nov-29-one.gif" rel="shadowbox"><img src="/images/stories/2013/11/29/angie-nov-29-two.gif"></a>
Source: PriceFinder
Subsequent sales show that both buildings attracted a higher level of owner occupier purchasers after completion, although they favoured the higher priced The Moreton project at Kangaroo Point. The majority (52%) of apartments in The Moreton are now owner occupiers, and while investors are still the majority in Admiralty Towers, owner occupiers now fill out 40% of apartments.
This reflects two things:
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<li>
Investors are attracted at pre-sale, most likely due to the negative gearing benefits of depreciation, etc, being at their greatest. There may also be stamp duty benefits in purchasing off-the-plan.
</li>
<li>
Owner occupiers prefer to come in after the building is completed. As the negative gearing benefits are not relevant to an owner occupier, there is less incentive to purchase off-the-plan, while they can also “touch and feel” the dwelling that they will be living in. Moreover, the timing of their requirement for an apartment may not necessarily coincide with the timing of the construction of a new apartment project. For example, a first home buyer could wait up to three years or more between signing the contract and when their apartment is completed, while upgraders and downsizers face a more uncertain market in the future to sell their existing dwelling before moving in.
</li>
</ul>
Interestingly, there was a greater turnover of apartments in The Moreton—88% of apartments have recorded a re-sale compared to 74% in Admiralty Towers—despite the perception of owner occupiers having more stable occupancy. Perhaps for many owner occupiers of apartments, this represents a stepping stone into another dwelling.
Nevertheless, despite the higher turnover, apartments in The Moreton achieved higher price growth on average than Admiralty Towers, with sales on average achieving a rate of growth of 3.9% per annum, compared to 3.6% per annum. The margin may not be substantial, but it builds up in aggregate over an extended holding period.
What does this mean?
While a development can be developed and marketed as attractive to owner occupiers, developers are nevertheless reliant on investor purchasers to achieve the pre-sales for development finance to proceed. This poses a problem for policy makers, who would like a greater level of owner occupiers living in apartments.
The limited owner occupier demand at pre-sale means that developers are likely to build stock at a price point to be more attractive to investor purchasers in order to achieve the required pre-sales in a timely manner. Owner occupiers instead then prefer to purchase the finished product, where the look and quality of the apartment is a known quantity. However, a development developed and priced to maximise investor sales may not necessarily be attractive to owner occupiers in the future.
Even in conducive locations where a developer may develop and seek to target a higher share of owner occupiers for off-the-plan sales, investors are a necessary—and indeed compulsory—part of the marketing equation. Only smaller or unique buildings can get away with being purchased in majority by future owner occupiers, as they could potentially face a more limited opportunity to buy in at re-sale. Nevertheless, the prospect of greater future price growth and potential onsale to either another investor or an owner occupier can play a part in marketing to investors. Such a project would also attract a larger, although probably still a minority, share of owner occupiers provided the project is developed as being attractive to this market upon completion.
 
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 Angie Zigomanis is senior manager of <a rel="nofollow" title="BIS Shrapnel" href="https://www.bis.com.au/" target="_blank">BIS Shrapnel.</a>
 
 
 
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How important are owner occupiers in the inner Brisbane apartment market?

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GUEST OBSERVATION
Using an objective measure of location, the <a href="https://www.walkscore.com/" target="_blank">Walk Score</a> rates a location (out of 100) in terms of how walkable it is to services such as shops, recreation, public transport. This measure of walkability provides an objective measure of location, which can then be used to measure the value of Sydney suburbs. In theory, people will pay a premium for having a higher level of amenity close by. The Walk Score web site offers an overall Walk Score for total suburbs as well as individual locations. 
The chart below plots the Walk Score for each of Sydney’s suburbs against its median house price in the six months to September 2014. As would be expected, the median house price tends to increase with a higher Walk Score and the trend is upwards. The median Walk Score of Sydney’s 544 suburbs is 59. 
Most of the data is bunched around the trend line. However, the outliers show those suburbs where the price is high relative to its Walk Score (overpriced) or where the price is low relative to its Walk Score (underpriced). It should be noted many smaller inner suburbs have a low population of houses and the median may be distorted by the very low number of sales that take place. Indeed, many inner suburbs reported no sales over the period, and we have excluded those suburbs that recorded less than 10 sales in the period.
<img src="https://www.bis.com.au/verve/_resources/Best_Value_Suburbs_Sydney_Image_1.png" alt="">
So which suburbs in Sydney offer the most (and least) “bangs per buck” on this basis? 
The chart suggests that the most expensive suburb (that recorded more than 10 house sales in the six months to September 2014) of Vaucluse (median of $3.7 million) is overpriced relative to the amenity it offers, based on its Walk Score of 69. Not shown in the chart due to a low number of sales, Point Piper rates as even less affordable, recording a Walk Score below Sydney’s median of 58 and a median house price (based on five sales) of $9.4 million. 
In comparison, suburbs such as Ellis Lane and Grasmere appear overpriced considering they both have a Walk Score below 10. However, these locations offer acreages and the high price reflects the larger lot sizes (which in turn also diminish walkability). Outside of the acreages, the most expensive of the suburbs with a Walk Score below the median of Sydney suburbs is Church Point in the Pittwater Council Area, which has a median house price of $1.28 million and a Walk Score of 23. 
The best value suburbs are those that have the highest <a href="https://www.walkscore.com/">Walk Scores</a> for the lowest prices. In terms of the “walkers paradise” suburbs, Sydney has three suburbs with a Walk Score over 90 that have a median value of less than $1 million. These are Erskineville (Walk Score 92, median $975,000), Newtown (Walk Score 95, median $990,000) and Darlington (Walk Score 94, median $986,000), closely followed by Enmore (Walk Score 89, median $935,000). Parramatta represents the best value suburb with a Walk Score above 80 (at 81), and a median house price of $775,000. 
Amongst the suburbs that offer a good level of walkability (above 60), the best value suburbs are Liverpool (Walk Score of 77 and median house price of $575,000 in 2013), Mount Druitt (70 and $575,000), Warwick Farm (69 and $495,000), Lalor Park (66 and $498,000) and Penrith (64 and $473,000). All of these suburbs have a Walk Score well above the median Walk Score of Sydney’s suburbs of 59. 
Rating Sydney’s suburbs on a “dollar per Walk Score basis”, the top 10 Sydney suburbs can be seen below. All are established suburbs which are located just inside outer Sydney growth corridors in Sydney’s west.
Emerton is the most affordable in terms of the value offered per Walk Score point, and its low median house price is a reflection of its relatively low Walk Score below 60. The most walkable of the top 10 is Liverpool which has a Walk Score of 77 (classified as “very walkable”), while still having a relatively affordable median house price of $575,000—well below the Sydney median.
<img src="https://www.bis.com.au/verve/_resources/Best_Value_Suburbs_Sydney_Image_2.png" alt="">
<a href="https://www.bis.com.au/key_people/name/angie_zigomanis">Angie Zigomanis</a> is senior manager of <a href="https://www.bis.com.au/" target="_blank" title="BIS Shrapnel" rel="nofollow">BIS Shrapnel.</a>
This article first appeared on BIS Shrapnel's blog.
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Angie Zigomanis

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