PO Box 465, Subiaco
Western Australia 6904
Golden Bay Investor Report
W rpsgroup.com.au
July 2014
Warnbro
Golden Bay Overview
Golden Bay is located along the south western coastal strip of the Perth’s
metropolitan region.
This suburb is located within the City of Rockingham which was the
fifth fastest growing municipality in the Perth metropolitan area over the
last decade. Golden Bay is a 15 minute drive to the commerical hub of
Mandurah and south of the Kwinana employment centre. Perth City and
Fremantle are located a 50 minute drive from Golden Bay.
Port Kennedy
Mandurah - North
Statistical Area 2
Golden Bay
The ‘Golden Bay region’ has been based on the ABS Statistical Area 2
which includes Golden Bay, Singleton and Secret Harbour.
Mandurah
Greater Perth and Western Australia Economic Overview
The Western Australian and Perth economies underwent
significant transformation over the last few years on the back
of record investment in mining/energy and public infrastructure.
The state has one of the fastest population growth rates and one
of the lowest unemployment rates in the developed world.
In spite of dire media commentary on the effects of less mining
investment, the WA and Perth economies have been resilient and
are expected to grow strongly in the medium term.
The economy is expected to experience a minor slowdown
over the next few years but remain one of the fastest growing
economies in the country over the next four years.
The value of exports in the state increased by 8.4% in 2013 to
over $120b and is expected to increase further when large LNG
projects begin exporting over the next few years.
Perth, meanwhile, is transitioning to a more sustainable growth
path supported by dwelling and infrastructure construction.
There are currently a large number of public health and transport
projects and record residential construction underway which is
keeping a lid on unemployment.
Annual Population Growth, 2008 to 2013
3.5%
8.0%
Gross State Product, Western Australia
7.0%
3.0%
Gross State Product (p.a.)
Average Annual Population Growth
Throughout the transition from resource investment to
production, income from record exports will be a significant
offsetting factor.
2.5%
2.0%
1.5%
1.0%
0.5%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
0.0%
WA
NSW
VIC
QLD
Source: ABS Regional Population Growth Cat No. 3218.0 (2014)
AUS
2002/03 2004/05 2006/07 2008/09 2010/11 2012/13 2014/15 2016/17
Actual
Estimate
Source: ABS National Accounts Cat No. 5220.0 (2014), WA Treasury (2014)
Population and Demographics
RPS has explored the population and demographics of the Golden
Bay region. Some of the key demographic findings of the region
are as follows:
•
Population of 18,400 in 2013, up 9.4% p.a. since 2003;
•
The region is typically home to young families, with a large
proportion of school-age children. The median age of
residents is 31, compared to the national median of 37.
•
62% were born in Australia, which is lower than the Australian
average of 70%. Relatively large and growing proportions
were from England (18.5%);
The unemployment rate in the area was 4.5%, below the
Western Australian rate; and
•
Average weekly household income for residents was $1, 977
- $518 greater than the metropolitan Perth average - as the
region has a high number of families with two income earners.
The demographics indicate a predominantly “blue collar” workforce
in the region with a high proportion of skilled technicians and
trades workers and less “white collar” professionals than that
observed nationally.
Population, Singleton‐Golden Bay‐Secret Harbour, 2003‐2013
200,000
18,000
180,000
16,000
160,000
Estimated Resident Population
Estimated Resident Population
20,000
•
14,000
12,000
10,000
8,000
6,000
4,000
2,000
Projected Population, City of Rockingham, 2003‐2026
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0
2013
Source: ABS Regional Population Growth Cat No. 3218.0 (2014)
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Source: ABS Regional Population Growth (2014), WAPC WA Tomorrow (2012)
Community Facilities and Investment
Business and Economic Activity
The following outlines just a few major public and private
investments proposed for Golden Bay and the surrounding region:
Business activity is driven largely by the construction industry, over
a third of all business in the Golden Bay region are construction
related. Despite construction accounting for a large proportion
of businesses in the region, businesses in other industries, such as
professional services and financial services are steadily increasing
in the region. There are very few large employing businesses in
the region, where non-employing and small business makes up the
vast majority; though there are large employers to the south and
north of Golden Bay.
Community Investment Projects – There has been significant
community investment such as the $4.5 million redevelopment of
the nearby Secret Harbour Surf Lifesaving Club and over $7 million
enhancing Comet Bay College, the closest secondary school.
Mandurah Aquatic & Recreation Centre Redevelopment
– The $38 million redevelopment will revitalise the exiting ageing
facilities to provide a modern, integrated sporting, aquatic and
recreational facility that will meet the needs of the region’s growing
community. Works began in April 2014 and are expected to be
completed by early 2014.
Challenger Institute of Technology Campus Expansion –
Work is underway on the $6 million construction of the Challenger
Institute’s new Peel Health and Community Services Training
Centre, which is set for completion for the end of 2014. It will cater
for a host of tertiary educational needs and is located 15 minutes’
drive south of Golden Bay.
600
Number of Registered Businesses
Golden Bay Primary School – The new $13 million state-theart school facility is due for completion by the beginning of the
2015 school year.
Businesses, by Employment Level, Singleton‐Golden Bay‐Secret Harbour Region
500
400
300
200
100
0
Non‐Employing
1‐4 Employees
5+ Employees
Source: ABS Count of Australian Businesses Cat No. 8165.0 (2014)
Perth Housing Market Trends
The number of days taken to sell a home in Perth has declined 30%
to 56 days, on average, over the past two years and therefore more
existing home owners are marketing their homes for sale. This trend
is likely to continue throughout 2014.
RPS believes there are a number of strong fundamentals which will
underpin the strength of the Perth property sector over the short
and medium term such as population growth and tight new dwelling
supply.
16,000
14,000
$400,000
Sales Volume
12,000
10,000
$300,000
8,000
$200,000
6,000
4,000
$100,000
2,000
$0
0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Volume
House Price
Unit Price
Source: Landgate, RPS
Perth Vacant Land Sales Volume and Median
$300,000
5,000
4,500
$250,000
4,000
3,500
$200,000
3,000
$150,000
2,500
2,000
$100,000
Sales Volume
Low levels of established products on the market drove capital growth
as well as an increased appetite for new dwellings. Strong demand led
to an undersupply of land as vacant land stock halved over the last
18 months.
Median Price
A drop in mortgage costs has encouraged strong first home buyer
and investor activity over the last 18 months. This has led to strong
demand for properties in the sub-$600,000 category; especially
properties located near established employment centres.
18,000
$500,000
Median Price
The Perth housing market has continued to strengthen since its
2011 low and has been driven by reduced mortgage costs and strong
population growth.
Perth House and Unit Sales Volumes and Medians
$600,000
1,500
1,000
$50,000
500
$0
0
Mar‐03 Mar‐04 Mar‐05 Mar‐06 Mar‐07 Mar‐08 Mar‐09 Mar‐10 Mar‐11 Mar‐12 Mar‐13 Mar‐14
Volume
Median
Source: Landgate, RPS
Golden Bay House Sales Volumes and Medians
Golden Bay Housing Market Trends
Despite the slowing in sales volume since the stellar 2013 year, the
median house price rose by 15.1% to $412,000 through the year to
March 2014 after a marginal increase of less than 1% in 2013. The
housing stock in the suburb is dominated by detached housing, with a
very small market for units and terrace houses.
The affordability of houses and the community amenity aspects
of Golden Bay provide a desirable location for young families and
first-home owners. Investors will be also attracted to the area with
relatively strong rents and affordable house prices allowing for many
of the suburb’s housing stock to be positively geared at current
mortgage rates.
70
$500,000
$400,000
50
$300,000
40
30
$200,000
Sales Volume
Median Price
60
20
$100,000
$0
10
Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Volume
House Price
0
Volume Average (10 year)
Source: Landgate, RPS
House Sales by Price Range, Golden Bay
18
16
14
Number of Sales
The Golden Bay housing market experienced a strong 92% lift in sales
volumes over the year to March 2013, as sales activity rose across
metropolitan Perth. Over the year to March 2014, sales volume
decreased by 29.3% to 53 sales, however, are still above the 10-year
average of 50 sales.
80
$600,000
12
10
8
6
4
2
0
Less than
$250,000
$250,000 to
$350,000
Source: Landgate, RPS
$350,000 to
$450,000
$450,000 to
$550,000
$550,000 to
$650,000
More than
$650,000
PO Box 465, Subiaco
Western Australia
6904 Report
Golden
Bay Investor
W rpsgroup.com.au
July 2014
Rental Vacancy Rate
Rental Yields and Overall Returns
The rental vacancy rate for an area provides a strong indication
of the market balance for residential rental properties. Vacancy
rates across Perth have increased recently as population growth
eased and many existing renters entered the property ownership
market. Leases advertised in Perth more than doubled over the
last year and the vacancy rate has lifted above what RPS considers
a balanced market.The Golden Bay rental market has experienced
a recent decline in vacant listings and the vacancy rate is 1% below
the Perth average, indicating future strength in the investor market.
The chart below compares Golden Bay capital and rental returns
and median value to other surrounding suburbs in the southwestern coastal area. Golden Bay has experienced strong capital
growth which is reflective of affordability, low interest rates and
strong population growth – capital growth was superior to all
other surrounding suburbs. The rental yield in the area is also
strong and on par with surrounding suburbs, at around the 5%
mark.
Median Price, Capital Gain and Rental Return, Year to Mar 2014
18%
5.0%
$600,000
16%
Oversupplied Market
2.0%
Balanced Rental Market
Undersupplied Market
1.0%
Mar‐08
Total Annual Return
Vacancy Rate
3.0%
0.0%
$500,000
14%
4.0%
$400,000
12%
10%
$300,000
8%
6%
$200,000
4%
$100,000
2%
0%
Dec‐08
Sep‐09
Jun‐10
Mar‐11
Golden Bay
Dec‐11
Sep‐12
Jun‐13
Mar‐14
Perth Metro
Source: SQM (2014), RPS
Median House Price
Residential Rental Vacancy Rates
$0
Golden Bay
Capital Gain
Singleton
Secret Harbour
Rental Yield
Port Kennedy
Median Price
Source: Residex (2014), Landgate, RPS
RPS Golden Bay Suburb Outlook
The Golden Bay region has strong fundamentals which will likely lead to increased demand to live in the area and continued demand for
homes for rental and ownership.
The region is ideally located between the commercial centres of Mandurah and Rockingham which are expected to see an increase in
amenity and community vibrancy as the population of surrounding areas increase and many private projects and public infrastructure
come into fruition in the short to medium term. High levels of affordability compared to surrounding suburbs and access to new primary
and secondary schools and community amenities will rank highly amongst young families.
Golden Bay possesses the underlying fundamentals for future growth in the homebuyers market, investors will also be attracted by the
healthy rental yields and capital growth prospects.
About Economics at RPS
Contact
RPS is an international consultancy providing world-class local
solutions in energy and resources, infrastructure, environment and
urban growth. Our Economics team is well positioned to undertake
comprehensive analysis of a range of business, community and
government issues and projects. Our key areas of expertise include:
WA Head Office
Level 2, 38 Station Street
SUBIACO WA 6008
•
•
•
•
•
Urban Economics
Socio-Economics
Economic Development
Regulatory Economics
Corporate Strategy and Advice
p. +61 8 9211 1111
w. www.rpsgroup.com.au
Tim Connoley
Technical Director
Disclaimer: This profile has been prepared by RPS Australia East Ltd. Nothing in this profile represents financial advice. Data and associated analysis is current as at 1 July 2014.