MARKETVIEW MAJOR MARKET TRENDS Sydney price recovery is underway, although with vacancy at a 17-year high of 4.3%, apartment rents have dropped. Melbournes recovery is lagging, but the return to a more normal environment generally as social and business restrictions ease should support pricing into 2021. Brisbane continues to present as a significantly more affordable residential market in comparison with Sydney and Melbourne and is well place to capitalise when border restrictions ease. Perths declining vacancy remains the highlight, dropping to 0.9% in September, the first time it has been sub-1.0% since 2007. Adelaide is recording strong price performance. Canberras economy has weathered the impacts of COVID-19 better than most, providing a solid base to support the residential market. Market resilience has surprised, but dynamics are changing Australia Residential, Q4 2020 1 +4.4% y-o-y Source: Australian Bureau of Statistics -3.4% y-o-y +0.4% y-o-y +0.6% y-o-y AUSTRALIA RESIDENTIAL RESILIENCE WITH CHANGING DYNAMICS Figure 1: Quarterly Net Movement to Regional Australia 2020 CBRE, Inc. |Q4 2020 CBRE Research 0 2,000 4,000 6,000 8,000 10,000 12,000 Jun- 10 Dec -10 Jun- 11 Dec -11 Jun- 12 Dec -12 Jun- 13 Dec -13 Jun- 14 Dec -14 Jun- 15 Dec -15 Jun- 16 Dec -16 Jun- 17 Dec -17 Jun- 18 Dec -18 Jun- 19 Dec -19 Jun- 20 Net movement (persons) MARKETVIEW 2 Transfers (house)* 44,480 +9.5% y-o-y Transfers (unit)* 35,468 +11.4% y-o-y Median house price $1,154,400 +6.8% y-o-y Median unit price $732,400 +4.3% y-o-y Vacancy rate 4.3% +1.0% y-o-y Sydney National Overview Transfers (house)* 40,967 -13.4% y-o-y Transfers (unit)* 29,715 -10.8% y-o-y Median house price $846,000 +1.3% y-o-y Median unit price $622,500 +1.0% y-o-y Vacancy rate 3.7% +1.5% y-o-y Melbourne Transfers (house)* 30,697 -1.7% y-o-y Transfers (unit)* 10,590 +8.8% y-o-y Median house price $539,000 +2.1% y-o-y Median unit price $394,500 -0.1% y-o-y Vacancy rate 2.1% +0.4% y-o-y Brisbane Transfers (house)* 17,639 +10.1% y-o-y Transfers (unit)* 7,425 +4.0% y-o-y Median house price $495,000 +4.0% y-o-y Median unit price $410,500 +10.9% y-o-y Vacancy rate 0.9% -0.1% y-o-y Adelaide Transfers (house)* 24,383 +9.0% y-o-y Transfers (unit)* 7,962 +11.1% y-o-y Median house price $480,000 +1.0% y-o-y Median unit price $375,000 -1.3% y-o-y Vacancy rate 0.9% -1.6% y-o-y Perth Transfers (house)* 4,358 +10.4% y-o-y Transfers (unit)* 3,675 +6.8% y-o-y Median house price $730,000 +10.6% y-o-y Median unit price $480,000 +2.1% y-o-y Vacancy rate 0.9% -0.3% y-o-y Canberra Source: ABS; REIA Note: Transfers data represents the 12-months to September (preliminary). Price and vacancy indicators are for the June quarter (preliminary). State State Final Demand ($bn) Sept-20 quarter Y-o-Y growth (%) State Population (000) Jun-20 quarter Y-o-Y growth (%) Unemploy ment rate Nov-20 New South Wales $149.5 -3.3% 8,164.1 0.9% 6.5% Victoria $111.7 -9.8% 6,694.9 1.5% 7.1% Queensland $92.2 0.9% 5,174.4 1.6% 7.7% Western Australia $51.1 -0.7% 2,661.9 1.5% 6.4% South Australia $30.0 -5.2% 1,769.3 0.9% 6.2% ACT $13.8 3.6% 431.1 1.1% 4.0% Australia $476.0 -3.8% 25,687.0 1.3% 6.8% AUSTRALIA RESIDENTIAL 2020 CBRE, Inc. |Q4 2020 CBRE Research MARKETVIEW -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% Jan -20 Feb -20 Mar- 20 Apr-20 May -20 Jun- 20 Jul-20 Aug- 20 Sep -20 Oct-20 Nov-20 Monthly change (%) Combined Capitals Combined Regionals 50,000 75,000 100,000 125,000 150,000 175,000 200,000 5,000 7,500 10,000 12,500 15,000 17,500 20,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Rolling annual (number)Monthly (number) Monthly Rolling annual Figure 6: Monthly Change in Dwelling Values, Capitals vs- Regional Australia Real Estate Institute of Australia Q4 2020 CBRE Research MARKETVIEW 0.0 1.0 2.0 3.0 4.0 $300 $350 $400 $450 $500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Vacancy rate (%)Median rent ($/week) Median 3br house rent ($/week) Median 2br unit rent ($/week) Vacancy rate (%) RECOVERY LAGGING OTHER CAPITALS, BUT WILL COME 5 AUSTRALIA RESIDENTIAL Melbourne Residential 2020 CBRE, Inc. | Table 2: Greater Melbourne Residential Market Indicators Source: Australian Bureau of Statistics Figure 10: Melbourne Residential Vacancy and Median Rents Source: Real Estate Institute of Australia Figure 9: September Quarter Capital City Median Price Change -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% National ACT Perth Adelaide Brisbane Melbourne Sydney % change, June quarter Units Houses Source: Australian Bureau of Statistics; Real Estate Institute of Australia Q4 2020 CBRE Research Indicator Value Q-o-Q change Y-o-Y change Indicator Value Y-o-Y change Median house price (Sept. Qtr) $846,000 -1.7% +1.3% House transfer volume (year to Sept., preliminary) 40,967 -13.4% Median house rent (Sept. Qtr) $400/week 0.0% 0.0% House approvals (year to Sept.) 26,307 +8.1% House yield, net (year to Sept.) 2.0% +0.1% 0.0% Median unit price (Sept. Qtr) $622,500 +0.2% +1.0% Unit transfer volume (year to Sept., preliminary) 29,715 -10.8% Median unit rent (Sept. Qtr) $420/week 0.0% -4.5% Unit approvals (year to Sept.) 24,650 +20.9% Unit yield, net (year to Sept.) 2.3% +0.1% +0.1% Owner occupier finance (year to Sept.) $51.1b +15.8% Total vacancy (Sept. Qtr) 3.7% +0.9% +1.5% Investor finance (year to Sept.) $18.4b +4.4% First home buyer (owner occupier, no.) (year to Sept.) 38,910 +22.4% MARKETVIEW 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Sep -15 Jan -16 May -16 Sep -16 Jan -17 May -17 Sep -17 Jan -18 May -18 Sep -18 Jan -19 May -19 Sep -19 Jan -20 May -20 Sep -20 Vacancy (%) Inner Brisbane (0-5km) Middle Brisbane (5-20km) Outer Brisbane CONDITIONS IN PLACE TO SUPPORT GROWTH 6 AUSTRALIA RESIDENTIAL Brisbane Residential 2020 CBRE, Inc. | Table 3: Greater Brisbane Residential Market Indicators Source: Australian Bureau of Statistics; Real Estate Institute of Australia Source: Real Estate Institute of Queensland Figure 12: Brisbane Residential Vacancy by Precinct Source: Australian Bureau of Statistics; Real Estate Institute of Australia Figure 11 House Price Differential and Net Interstate Migration Q4 2020 CBRE Research Indicator Value Q-o-Q change Y-o-Y change Indicator Value Y-o-Y change Median house price (Sept. Qtr) $539,000 +1.7% +2.1% House transfer volume (year to Sept., preliminary) 30,697 -1.7% Median house rent (Sept. Qtr) $385/week +1.3% +1.3% House approvals (year to Sept.) 11,766 +5.0% House yield, net (year to Sept.) 3.0% 0.0% 0.0% Median unit price (Sept. Qtr) $394,500 +3.8% -0.1% Unit transfer volume (year to Sept., preliminary) 10,590 +8.8% Median unit rent (Sept. Qtr) $400/week +5.3% +3.9% Unit approvals (year to Sept.) 6,460 +9.5% Unit yield, net (year to Sept.) 4.2% -0.1% +0.3% Owner occupier finance (year to Sept.) $30.5b +16.2% Total vacancy (Sept. Qtr) 2.1% -0.5% +0.4% Investor finance (year to Sept.) $8.8b +0.8% First home buyer (owner occupier, no.) (year to Sept.) 23,853 +23.1% 0 10,000 20,000 30,000 40,000 50,000 60,000 -60% -50% -40% -30% -20% -10% 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Annual net interstate migrationPrice differential (%) Bris vs Syd (%) - lhs Bris vs Melb (%) - LHS Annual net interstate migration to Qld - rhs MARKETVIEW 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 $0 $70 $140 $210 $280 $350 $420 $490 $560 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Vacancy rate (%)Median rent ($/week) Median 3br house rent ($/week) Median 2br unit rent ($/week) Vacancy rate (%) CYCLE OF DECLINE MAY FINALLY BE OVER 7 AUSTRALIA RESIDENTIAL Perth Residential 2020 CBRE, Inc. | Table 4: Greater Perth Residential Market Indicators Source: Australian Bureau of Statistics; Real Estate Institute of Australia Source: Real Estate Institute of Australia Figure 14: Perth Residential Vacancy and Median Rentals Source: Real Estate Institute of Australia Figure 13: Perth Residential Median Price Change Q4 2020 CBRE Research Indicator Value Q-o-Q change Y-o-Y change Indicator Value Y-o-Y change Median house price (Sept. Qtr) $480,000 +0.8% -1.0% House transfer volume (year to Sept., preliminary) 24,383 +9.0% Median house rent (Sept. Qtr) $360/week +5.9% +5.9% House approvals (year to Sept.) 10,346 +6.5% House yield, net (year to Sept.) 3.1% +0.1% +0.2% Median unit price (Sept. Qtr) $375,000 0.0% -1.3% Unit transfer volume (year to Sept., preliminary) 7,962 +11.1% Median unit rent (Sept. Qtr) $350/week +6.1% +6.1% Unit approvals (year to Sept.) 2,503 -26.5% Unit yield, net (year to Sept.) 3.9% +0.2% +0.2% Owner occupier finance (year to Sept.) $14.3b +12.3% Total vacancy (Sept. Qtr) 0.9% -1.1% -1.6% Investor finance (year to Sept.) $2.8b +2.7% First home buyer (owner occupier, no.) (year to Sept.) 15,369 +13.7% -9.0% -6.0% -3.0% 0.0% 3.0% 6.0% 9.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% Sep -16 Dec -16 Mar- 17 Jun- 17 Sep -17 Dec -17 Mar- 18 Jun- 18 Sep -18 Dec -18 Mar- 19 Jun- 19 Sep -19 Dec -19 Mar- 20 Jun- 20 Sep -20 Annual price change (%)Quarterly price change (%) Houses (quarterly) Units (quarterly) Houses (annual) Units (annual) MARKETVIEW 0.0 1.0 2.0 3.0 4.0 $200 $250 $300 $350 $400 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Vacancy rate (%)Median rent ($/week) Median 3br house rent ($/week) Median 2br unit rent ($/week) Vacancy rate (%) PRICING PREFORMANCE STRONG 8 AUSTRALIA RESIDENTIAL Adelaide Residential 2020 CBRE, Inc. | Table 5: Greater Adelaide Residential Market Indicators Source: Australian Bureau of Statistics; Real Estate Institute of Australia Source: Real Estate Institute of Australia Figure 16: Adelaide Residential Vacancy and Median Rentals Source: Real Estate Institute of Australia Figure 15: Adelaide Residential Median Price Change Q4 2020 CBRE Research Indicator Value Q-o-Q change Y-o-Y change Indicator Value Y-o-Y change Median house price (Sept. Qtr) $495,000 +3.1% +4.0% House transfer volume (year to Sept., preliminary) 17,639 +10.1% Median house rent (Sept. Qtr) $360/week 0.0% 0.0% House approvals (year to Sept.) 6,944 +8.1% House yield, net (year to Sept.) 3.0% -0.1% -0.2% Median unit price (Sept. Qtr) $410,500 +7.9% +10.9% Unit transfer volume (year to Sept., preliminary) 7,425 +4.0% Median unit rent (Sept. Qtr) $310/week +1.6% +1.6% Unit approvals (year to Sept.) 2,753 -6.3% Unit yield, net (year to Sept.) 3.1% -0.2% -0.3% Owner occupier finance (year to Sept.) $9.6b +8.2% Total vacancy (Sept. Qtr) 0.9% -0.2% -0.1% Investor finance (year to Sept.) $2.8b -5.7% First home buyer (owner occupier, no.) (year to Sept.) 6,894 +14.4% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Sep -16 Dec -16 Mar- 17 Jun- 17 Sep -17 Dec -17 Mar- 18 Jun- 18 Sep -18 Dec -18 Mar- 19 Jun- 19 Sep -19 Dec -19 Mar- 20 Jun- 20 Sep -20 Annual price change (%)Quarterly price change (%) Houses (quarterly) Units (quarterly) Houses (annual) Units (annual) MARKETVIEW 0.0 1.0 2.0 3.0 4.0 5.0 6.0 $300 $350 $400 $450 $500 $550 $600 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Vacancy rate (%)Median rent ($/week) Median 3br house rent ($/week) Median 2br unit rent ($/week) Vacancy rate (%) ECONOMY SUPPORTING RESIDENTIAL MARKET 9 AUSTRALIA RESIDENTIAL Canberra Residential 2020 CBRE, Inc. | Table 6: Greater Canberra Residential Market Indicators Source: Australian Bureau of Statistics; Real Estate Institute of Australia Source: Real Estate Institute of Australia Figure 17: Median House and Unit Price, Canberra $300 $350 $400 $450 $500 $550 $600 $650 $700 $750 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Median price, quarterly ($000) Median house price ($) Median unit price ($) Q4 2020 CBRE Research Indicator Value Q-o-Q change Y-o-Y change Indicator Value Y-o-Y change Median house price (Sept. Qtr) $730,000 +3.9% +10.6% House transfer volume (year to Sept., preliminary) 4,358 +10.4% Median house rent (Sept. Qtr) $540/week 0.0% +5.9% House approvals (year to Sept.) 1,216 +1.7% House yield, net (year to Sept.) 3.1% -0.2% -0.2% Median unit price (Sept. Qtr) $480,000 +0.4% +2.1% Unit transfer volume (year to Sept., preliminary) 3,675 +6.8% Median unit rent (Sept. Qtr) $490/week +2.1% +4.3% Unit approvals (year to Sept.) 3,483 -14.8% Unit yield, net (year to Sept.) 4.2% 0.0% -0.1% Owner occupier finance (year to Sept.) $4.4b +19.6% Total vacancy (Sept. Qtr) 0.9% -0.2% -0.3% Investor finance (year to Sept.) $1.3b +6.3% First home buyer (owner occupier, no.) (year to Sept.) 2,884 +42.8% Figure 18: Canberra Residential Vacancy and Median Rentals Source: Real Estate Institute of Australia MARKETVIEW Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE. AUSTRALIA RESIDENTIAL AUSTRALIA RESEARCH Liability limited by a scheme approved under Professional Standards Legislation.