trends shaping perth: boom, busts and budgets
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Brian Haratsis, Executive Chairman - MacroPlan Dimasi, explores the impacts of the Federal budget on Western Australia and outlines what new opportunities are presented from the emergence of ‘mega’ trends.TRANSCRIPT
Booms, Busts and Budgets | 16 May 2014
Trends Shaping Perth
Presented by Brian HaratsisFriday 16th May 2014
Booms, Busts and Budgets (Breathers)^
Booms, Busts and Budgets | 16 May 2014
Contents Budgets Cycles Structural Factors X Factors
Booms, Busts and Budgets | 16 May 2014
Top 6 Budget Comments… Has that got something to do with pink batts
? Will the Eagles be able to afford some new
players ? Will the stadium be finished earlier ? It wont affect my holidays in Bali or
Broome ? Does this have to happen every year ? Will Grant Thornton invite me to this gig next
year ?
Booms, Busts and Budgets | 16 May 2014
Budgets: Federal Headline Numbers
GDP: $1,567 Billion RBA Target Cash Rate: 2.5% Total Budget Spend: $415.7 bn Budget Spend per cent of GDP: 25%
Key Themes Business Sector
Infrastructure
Mining
Service Sector (Health+Education)
Booms, Busts and Budgets | 16 May 2014
WA State Budget Headline Numbers
GSP: $252,999 billion Total Budget Spend: $28,508 bn Spend as a proportion of GSP: 11.3%
Key Themes Infrastructure
Forrest Field
Stadium
Roads
Health (Fiona Stanley)
GST
Booms, Busts and Budgets | 16 May 2014
WA State Budget
Booms, Busts and Budgets | 16 May 2014
Cycles Over the last 20 years WA has experienced high
volatility in growth and development due to national and local economic cycles driving: Interest Rates Business Investment House and Land Prices Immigration Gross State Product and wealth
Booms, Busts and Budgets | 16 May 2014
High Medium and Long Term Growth Perth Population forecasts –up to 2051
Source: ABS Cat 3222.0 (2013)
Age range 2001 2011 2021 2031 2041 2051Population as at
June 30 (millions)
0-14 292,898 356,645 508,481 630,573 725,123 841,548 15-64 994,774 1,305,037 1,737,501 2,189,762 2,663,897 3,082,10565-84 148,760 208,075 313,366 429,172 541,873 705,027
85 and over 18,929 30,242 43,240 71,110 113,511 154,760Total 1,455,361 1,899,999 2,602,588 3,320,617 4,044,404 4,783,440
% of Population
0-14 20.1% 18.8% 19.5% 19.0% 17.9% 17.6%15-64 68.4% 68.7% 66.8% 65.9% 65.9% 64.4%65-84 10.2% 11.0% 12.0% 12.9% 13.4% 14.7%
85 and over 1.3% 1.6% 1.7% 2.1% 2.8% 3.2%
Booms, Busts and Budgets | 16 May 2014
1829 1854 1879 1904 1929 1954 1979 2004 20290
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
2051
Long term growth: WA Perth population growth over 250 years
Source: ABS Cat 3222.0 (2013)
OPPORTUNITY PERIOD
Booms, Busts and Budgets | 16 May 2014
Medium and Long Term Growth: Asia World population growth
Booms, Busts and Budgets | 16 May 2014
Australian GDP Growth Cyclicality
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
-1%
0%
1%
2%
3%
4%
5%
6%
GDP (LHS) GDP Growth (RHS)
Booms, Busts and Budgets | 16 May 2014
Booms, Busts and Budgets | 16 May 2014
Cyclical Growth in WA
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130
50,000
100,000
150,000
200,000
250,000
300,000
0%
1%
2%
3%
4%
5%
6%
7%
8%
GSP GSP Growth
90s AverageGrowth: 4.4%
00's Average Growth: 4.5%
10's Average Growth: 5.1%
Booms, Busts and Budgets | 16 May 2014
Extreme Cyclical volatility: WA% Growth Growth No.
Western Australia (June 2012) 3.4% 79,000
Recent Peak Growth (2012) 3.4% 79,000
Recent Low Growth (2004/05) 1.6% 32,000
Decade Low Growth (2001/02) 1.2% 22,000
Australia Current Growth (2012) 1.7% 370,000
Australia Peak Growth (2009) 2.1% 442,500
Booms, Busts and Budgets | 16 May 2014
Risk: Cyclical Population Equation Net Overseas migration to WA can shift by
over 20,000 people depending on economic circumstances
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-130
10,000
20,000
30,000
40,000
50,000
60,000
±60%
Source: ABS Cat.3412.0
Booms, Busts and Budgets | 16 May 2014
Risk: Cyclical population equation WA’s Net Interstate Migration position has
been dependant on the economic cycle
1996
-97
1997
-98
1998
-99
1999
-200
0
2000
-01
2001
-02
2002
-03
2003
-04
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2009
-10
2010
-11
2011
-12
2012
-13
-6,000
-4,000
-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
Booms, Busts and Budgets | 16 May 2014
Structural Change: Mining and Services Population Employment Ageing (Health) Resources/Asia/
Deepening in the Service Sector
Tourism
Large Business Investment ($46.75 Bn in WA from mining alone in 2013)
48% of total Australian Exports come from mining
Resources to Asia (85%)
Booms, Busts and Budgets | 16 May 2014
West Australian Capital Investment Capital Expenditure by Industry, Quarterly
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Mining Manufacturing Other
$ M
illio
ns
Booms, Busts and Budgets | 16 May 2014
Perth Employment Forecasts
Education and Training
Retail Trade
Health Care and Social A
ssis...
Professional, Scientific, Techn...
Construction
Accom
modation and Food Se...
Adm
inistrative and Support ...
Manufacturing
Transport, Postal and Ware...
Other Services
Public Adm
inistration and Sa...
Mining
Rental, Hiring and Real Estate...
Arts and Recreation Services
Wholesale Trade
Financial and Insurance Serv...
Electricity, Gas, W
ater, Waste...
Information M
edia, Telecom...
Agriculture, Forestry, Fishing
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0 17.015.5
13.9 13.7
10.9
5.85.0
4.3 4.2 4.23.2 2.6 2.2 1.9
0.7 0.7 0.6
-0.6 -0.7
Growth in Perth Employment by Industry 2012-2017 (000’s)
Booms, Busts and Budgets | 16 May 2014
Housing Sales and Prices in Perth
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140
100,000
200,000
300,000
400,000
500,000
600,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Median value Houses sold
Booms, Busts and Budgets | 16 May 2014
Land Sales and Prices in Perth
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140
50,000
100,000
150,000
200,000
250,000
300,000
350,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Median value Land sold
Booms, Busts and Budgets | 16 May 2014
Property Price Comparison, Houses Land and Units
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140
100,000
200,000
300,000
400,000
500,000
600,000
House Price Unit Price Land Price
Booms, Busts and Budgets | 16 May 2014
What this means for you ? House values compounding at 6% p.a.
Booms, Busts and Budgets | 16 May 2014
The megatrends… New City Shape / Pilbara / Northern Growth
Story Super-networks Job mobility Density of opportunity Life Expectancy Ageing in which place?
Booms, Busts and Budgets | 16 May 2014
Megatrend 1: New City Shape High Density development in Perth is just
emerging
Building Approvals in Perth, Sydney and Melbourne
Source: ABS Cat.8731.0
Inner Outer Total
Houses Semi-
detachedFlats units or apartments Houses Semi-
detachedFlats units or apartments Houses Semi-
detachedFlats units or apartments
Melbourne 6% 9% 85% 61% 24% 15% 48% 20% 32%Perth 22% 11% 67% 68% 18% 14% 64% 18% 18%Syndey 3% 3% 94% 40% 38% 22% 27% 26% 48%
Booms, Busts and Budgets | 16 May 2014
Who lives in apartments? Growth in dwelling type by family composition,
2001-2011 Couple family
with no children
Couple family with children
One parent family
Other family
TOTAL FAMILY
Lone person Group Other TOTAL
Separate house 27% 17% 18% 29% 21% 28% 30% 81% 24%Semi-detached 23% 71% -4% 5% 26% -2% 28% 72% 15%Flat, unit or apartment 128% 193% 51% 33% 114% 14% 67% 76% 49%Other dwelling -16% -32% -24% -21% -20% -19% -25% 98% -3%Total 30% 20% 15% 24% 23% 16% 33% 75% 24%
Couple family
with no children
Couple family with children
One parent family
Other family
TOTAL FAMILY
Lone person Group Other TOTAL
Separate house 28,602 28,344 8,128 1,485 66,559 18,947 3,859 8,713 98,078Semi-detached 3,562 4,490 -303 66 7,815 -741 1,136 2,003 10,213Flat, unit or apartment 7,828 3,176 1,202 262 12,468 3,580 1,794 3,174 21,016Other dwelling -140 -65 -33 -3 -241 -354 -24 512 -107Total 39,387 35,384 8,711 1,777 85,259 20,743 6,663 14,042 126,707
%
No.
Booms, Busts and Budgets | 16 May 2014
Houses versus Apartments
Outer Perth Inner Perth Greater Perth
Semi-detached Flats units or apartments Houses Semi-detached Flats units or
apartments Houses Semi-detached Flats units or apartments Houses
2002 15% 5% 81% 11% 59% 30% 14% 11% 75%2003 14% 8% 78% 8% 66% 26% 13% 15% 73%2004 15% 14% 72% 12% 63% 24% 14% 19% 67%2005 16% 5% 78% 9% 73% 19% 15% 14% 71%2006 17% 10% 73% 9% 73% 18% 16% 17% 67%2007 19% 11% 69% 8% 74% 18% 18% 19% 63%2008 19% 11% 70% 5% 86% 9% 16% 28% 56%2009 17% 6% 77% 21% 24% 55% 18% 7% 76%2010 18% 8% 74% 5% 68% 26% 16% 14% 69%2011 15% 10% 74% 9% 57% 34% 15% 14% 71%2012 17% 13% 70% 6% 75% 19% 16% 20% 65%2013 18% 14% 68% 11% 67% 22% 18% 18% 64%
Building Approvals across Perth have trended towards higher densities over the previous decade
Sour
ce: A
BS C
at.8
731.
0
Booms, Busts and Budgets | 16 May 2014
Innovation Multi Unit product and precincts Last homebuyer Health and Ageing (house for life)
Booms, Busts and Budgets | 16 May 2014
Lifestyle solutions: Examples of Mixed Use and High Density Development
QV Melbourne – Residential, Retail and office multi use development in the heart of Melbourne.
Booms, Busts and Budgets | 16 May 2014
Megatrend 3 | Super networks Domestic/ interstate/
international overlay Facility
mix/parks/offices Global “address” Only 50% of residents
in most inner suburbs of Perth are Australian-born.
Booms, Busts and Budgets | 16 May 2014
Retirement Living v Retirement Villages Only 6-8% of the market live in retirement
villages
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Perth Adelaide Brisbane Capital City Average
Sydney Melbourne
Re
tire
me
nt
Vil
lage
Pe
net
rati
on
Rat
e
Me
diu
m a
nd
Hig
h D
en
sity
Dw
ell
ing
Shar
eRetirement Village Penetration Rate vs Medium and High Density Dwelling Share,
Capital Cities
Share of Medium/High Density Dwellings Retirement Village Penetration Rate
Booms, Busts and Budgets | 16 May 2014
More people 65+ are working
5%
6%
7%
8%
9%
10%
11%
12%
Sep-
97
Feb-
98
Jul-9
8
Dec
-98
May
-99
Oct-
99
Mar
-00
Au
g-00
Jan-
01
Jun-
01
No
v-01
Ap
r-02
Sep-
02
Feb-
03
Jul-0
3
Dec
-03
May
-04
Oct-
04
Mar
-05
Au
g-05
Jan-
06
Jun-
06
No
v-06
Ap
r-07
Sep-
07
Feb-
08
Jul-0
8
Dec
-08
May
-09
Oct-
09
Mar
-10
Lab
ou
r Fo
rce
Par
tici
pati
on
Rat
e
Participation Rate in the Labour Force, People Aged 65+, Queensland
Booms, Busts and Budgets | 16 May 2014
Megatrend 4 | Job mobility: Strategic centrality outside the CBD
20% of Australia’s workforce changes jobs annually 40% of Australia’s residents change dwellings
annually For employment mobility Maximising life chances/affordability
Stirling: high CBD access Joondalup: Regional Alternative Great Eastern Highway Corridors: Resources
Booms, Busts and Budgets | 16 May 2014
New Perth Stadium
$2b project with $358m in new public transport infrastructure
Booms, Busts and Budgets | 16 May 2014
Gateway WA – Perth Airport & freight access Accommodate a doubling
of airport passengers and freight volumes
Construction commenced January 2013
Jointly funded: Federal Govt. $686.4 million
WA State Govt. $317.5 million
Completion expected by 2017
Booms, Busts and Budgets | 16 May 2014
Megatrend 5 | Density of Opportunity: Job Makers
Growth in value of inner and middle rings New service economy- CBD and strategic job
locations Growing human capital – The Job Makers
See job opportunities and the preservation of their high levels of income as their key drivers
‘Wealth Creators’ Invest in human capital, physical assets, future
household wealth and influence
Booms, Busts and Budgets | 16 May 2014
X Factors Business Confidence Deregulation Private Sector infrastructure investment – No GST
solution Integration with the eastern Seaboard services sector Deepening the services sector involvement in
resources Global education and international tourism
Booms, Busts and Budgets | 16 May 2014
Australian Economic Transition: Eastern Seaboard
Resources Construction New Service Economy
Western Australia Resource Construction
Resource Operations and Service Sector
Regional Growth
Global and national service sector integration
Booms, Busts and Budgets | 16 May 2014
Thank you.
MacroPlan Dimasi is Australia’s first choice when seeking solutions which add value to important property, planning and economic development
projects.
We welcome the opportunity to discuss with you, key market trends as they relate to your business and
sector.
Please contact Brian Haratsis or Stuart McKnight on 08 9225 7200 or [email protected] to
arrange an appointment.