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We advise. You decide.

- Property Advice and Valuations

- Tax Depreciation Schedules

- Research reports and other services

- Quantity Surveying

The month in

2010

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The month in review

Contents

Peace of mind for your property decisions.

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Page Topic3 Feature - “The Prestige” Blue Ribbon Property in a Moving Market

4 - 6 Herron Todd White Happenings

7 - 17 Commercial – RETAIL

18 - 34 Residential

35 Contacts

36 - 43 Rural

44 - 60 Market Indicators

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The month in review

When the original concept was brought forward by Richard Branson for Virgin Airlines, he felt that rather than the traditional classi!cations, aircraft seating should be designated “Upper Class”, “Middle Class” and “Ri"-Ra"”. Unfortunately some clever marketing type probably talked him out of what would have proved a brilliant opportunity for high pro!le libertarians to cry-fowl and conservative talkback to counter that any complaints about the plan were “political madness gone mad”. Frankly, I like to think that Sir Richard would occasionally sit in his spacecraft and muse that not going ahead with the seating plan was one of his few errors in judgment.

It’s always been the way. Whilst plenty of hard yakka is conducted by those in the cramped seats, you can’t deny that most of the trailblazing is completed by the folks at the pointy end of the aircraft. Sure, the comfy pillows and free slippers come at a cost, but it does leave plenty of time as you rack up the frequent #yer miles to consider where the world is heading, if you’re happy with the charted course and how you can change it if it’s time for a shake up.

This month, we have decided to consider those folks programming the satellite navigation in regards to money being no object. The ground breakers who can a"ord to get what they want and know how the game is played.

These property powerful quite often have the means to sit taut for extended periods waiting for the opportunity to peek above the bushes before pouncing upon what seems to be a crackerjack deal. They are the buyers and sellers who mostly don’t worry about whether interest rates are going up 0.25% or the All Ords is having a slow day because they are geared to take on the cycles and do what they #ippin’ well like. For some, it’s a case of why bother with the long queue through security and waiting to be asked to be seated in rows one to !ve – I’ll just buy my own plane and let everyone else choose between the chicken or beef.

Our HTW o$ces have taken stock this month of how high end property is playing out given both last year’s developments, and this year’s slow but steady increase in con!dence. This issue’s commercial contribution on the retail sector sees an unparalleled collection of the country’s best retail investments and how they are performing in the current climate. The results are varied and stakes are high, but despite the dire straits of ‘09, there are signs that in some areas things are getting rosy.

For those with an eye for the La-De-Da of residential, there is a tasty collection of properties within sure to turn most readers a particular shade of green. Best of all, a little insight into how the other half are viewing real estate is likely to provide an interesting perspective on how your local market as a whole is playing out post GFC.

So whatever you #avour in property, take your seat, watch the safety brie!ng, order the good cognac and enjoy a little bit of prestige as Cpt. HTW gets clearance – but don’t forget as always to call the cockpit and !nd our exactly how much turbulence lies ahead in your piece of real estate property sky.

Tally ho and chocks away!

Kieran ClairCerti!ed Practising Valuer1 MARCH 2010

kieran.clair@htw.com.au

“The Pretige”Blue Ribbon Property in a Moving Market

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The month in review

“Herron Todd White Happenings”Herron Todd White merges with Allsopps’

Herron Todd White’s Gold Coast operation has extended its reach into northern NSW after merging with leading Lismore-based valuers Allsopp and Associates.

Herron Todd White Gold Coast Director Tod Gillespie said the merger would combine the best of two worlds.

“The merger will match Allsopps’ unsurpassed local knowledge and expertise which combines with the national strength and scope of the Herron Todd White operation,’’ said Mr Gillespie.

“I really believe the merger will create stronger and more e"ective business to meet the needs of customers in northern New South Wales.”

Allsopp and Associates, which has six valuers on sta" and six support employees, is the oldest valuation !rm in northern NSW.

It services the needs of clients from Grafton in the south to Tweed Heads in the north and as far west as Kyogle. For specialised valuations and litigation tasks the services are extended to well outside those localities.

The merger lifts the number of o$ces in the Herron Todd White network to 55 throughout Australia.

Allsopp and Associates Director Owen Allsopp said the merger would have signi!cant bene!ts but it would be business as usual from the clients’ perspective.

‘‘It is important for clients to know that from their point of view, very little will be changing even though we are merging with Herron Todd White,’’ said Owen.

“I also want to make it very clear that I am staying on and will be continuing and expanding my valuation and litigation role”.

As part of the merger David Sullivan will be appointed Managing Director of the Lismore o$ce while Owen will concentrate on his growing client base.

David Sullivan is a well respected valuer in the northern NSW region, having specialised in residential and commercial markets over the past 15 years.

Owen has an excellent reputation for representing landholders during negotiations with Government Departments in relation to compulsory property acquisitions.

“The Roads and Tra$c Authority are continually looking to buy land along their planned routes for major roadways and I really enjoy representing the landholders during these negotiations,’’ Owen said.

“The bulk of the !rm’s work, however, was associated with determining valuations for mortgage providers such as banks and other !nancial institutions”

The !rm also does extensive work for Councils, the State Government and Federal Government Departments in the region.

Owen said the !rm was fortunate to have a large and loyal base of customers and he looks forward to the business continuing to grow into the future.

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The month in review

“Herron Todd White Happenings” Herron Todd White the ‘Magni!cant Seven’

Herron Todd White, Australia’s largest independent property valuation and advisory group, has secured the appointment of seven of Australia’s leading commercial property experts.

Mr Brendon Hulcombe, Chief Executive O$cer of Herron Todd White, said, “The recent appointment of seven new executives – all leaders in their !eld, cements Herron Todd White’s position as a driving force in commercial property valuation.”

“We o"er a high level of commercial valuation expertise backed by a sta" list that reads like a ‘who’s who’ of commercial property” added Mr Hulcombe.

The seven recent executive appointments at Herron Todd White are:

Michael McNamara: Well-known from his former high pro!le role with RP DATA and as General Manager of APM, Michael McNamara recently joined Herron Todd White as General Manager, Sydney/ACT/SE NSW.

Mark Skeed: Formerly a Commercial Valuation Director with Cushman and Wake!eld, Mark Skeed takes up the role of Manager of Herron Todd White’s Commercial Division - Sydney/ACT/SE NSW.

Bernie Smith: Previously a Commercial Director with Knight Frank in Valuations, Bernie Smith is now responsible for Commercial operations in Herron Todd White Tasmania and will continue some work in Melbourne.

Shayne Kirstenfeldt: Shayne Kirstenfeldt joins Herron Todd White Brisbane after forging an outstanding reputation with Westpac Institutional Bank, where he held the role of Director, Property Risk. Mr Kirstenfeldt adds considerable weight to the Brisbane Project Development team undertaking valuations of residential land subdivisions, high rise towers and small unit developments.

Michael Simson: Formerly Manager of Property Finance with the Bank of Queensland, Michael Simson brings extensive property experience to the Project Development team at Herron Todd White Brisbane.

Jim Parmeter: Previously an Associate Director with CB Richard Ellis, Jim Parmeter has joined Herron Todd White’s Sydney team, focusing his expertise on Government Portfolio valuation and advisory.

Tim Stevens: A property valuer for over 20 years, the early part of Tim Stevens’ career was spent with Barclays and St George Bank before specialising in the Australian debt and equity markets. Mr Stevens joins the Sydney team focusing on key Commercial client management.

Along with these new appointments, Brendon Ptolomey, formerly a national Director of Herron Todd White, was recently appointed to the role of Deputy Chairman of the Board after ten years with Herron Todd White Perth.

Brendon Hulcombe said, “Our recent executive appointments in the Commercial Valuation and Advisory division will provide a secure foundation for Herron Todd White to meet its growth targets for 2010”.

Herron Todd White, a private Australia property valuation and advisory organisation with 650 employees has an annual turnover in excess of $70 million, of which commercial property activities comprise over $20 million.

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The month in review

“Herron Todd White Happenings” Top Level Merger Vote of Con!dence in

Downs EconomyLeading Darling Downs property advisory and valuation practice, Herron Todd White has passed a huge vote of con!dence in the regional economy by announcing a major expansion today.

From 1 March, Herron Todd White Darling Downs will merge with leading Toowoomba based property and advisory !rm, Stantons Valuers in a deal that will cement Herron Todd White as by far the biggest player in the Downs property advisory and valuation sector. “Operating for over 20 years and under the guidance of Director Brad Neill since 2003, the Stantons Valuers operation and their network of o$ces in Toowoomba, Dalby and Warwick will substantially boost Herron Todd White’s reach into the region,” founding Herron Todd White Director Mr David Nilon said at the announcement in Toowoomba this morning.

Mr Nilon has been with Herron Todd White since it commenced operating in Toowoomba in 1985. Since then, the company has grown signi!cantly and now services a large proportion of the Darling Downs and South West Queensland with o$ces in Roma and Goondiwindi. The merger will bring the total number of o$ces to !ve including Dalby and Warwick.

“This merger is a huge vote of con!dence in the economy of the Darling Downs and where we think the property market is heading,” David said at today’s announcement.

The organisation will employ some 41 people and service all of Australia’s leading banks and lenders as well as the business and Government communities. They will also continue their support of the local community through the various sponsorships they o"er including the Endeavour Foundation through its annual rally.

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The month in review

Commercial Overview

As we have noted time and time again over the past year and a half, retail is one sector that is highly sensitive to an economy confused about which way to turn. It’s all about consumer con!dence leading on to calm tenants assured that they will maintain cash #ow. This is the formula that equals growth in the retail sector and 2009 proved a tough row to hoe for plenty of participants.

Fortunately, things are starting to look up and retails in many areas may now prove a sound prospect in the medium to long term. As with other sectors, those operators at the high end can provide a beacon of market direction. If buyers are able to access the funds for the cream of the retail crop, they will have been looking hard at the opportunities presented over the past year. As con!dence grows, plenty will be prepared to jump.

This month’s contributions shine a light on where the best retail property sits around Australia and what activity is currently underway in the sector.

Sydney

Without a doubt, the historically low interest rates and emergency stimulus packages employed throughout 2009 have cushioned the retail property sector, e"ectively avoiding the worst e"ects of the economic downturn. While some fears still remain in the market, a positive outlook (especially for super-prime locations) saw the retail property industry strengthen as investors snapped up the limited prime-grade investment opportunities available in the Sydney metropolitan market.

This commentary looks at prime retail strips and the super prime retail precinct situated around Pitt Street in the CBD.

The super-prime/high-end retail strip property sector is spread across an array of locations through Sydney. Proximity to beaches, transport and high-end retail outlets denote these areas, which are often located in some of the most “walkable” suburbs in Australia. Prime areas include the beachside locations of Campbell Pde Bondi, The Corso at Manly on the Northern Beaches and the vogue city fringe strips of Oxford St Paddington and King St Newtown. Other super-prime retail strip zones include Military Rd, Mosman, Darling St Balmain and the Double Bay precinct.

Despite the pressures on retail trade over the past 18 months, premiums paid for super-prime space have risen dramatically over the past nine months in the CBD, primarily due to the ongoing revitalisation of Pitt St Mall. Over this period super-prime rents having grown by approximately 5.5% over the year to $7,560 per sqm. Comparatively, net face rents in prime precincts fell by a slight 0.9% over the year to $2,598 per sqm.

The progressive withdrawal of some 40,000sqm from the Pitt Street Mall super-prime retail space over the past 18 months has resulted in a mass exodus of some 298 retailers from this precinct. This played a considerable role in the tightening of vacancy, as retailers began actively searching for alternate retail space. While the super-prime sector currently has nil vacancy, the vacancy within the Sydney CBD is anticipated to rise in late 2010 as the redevelopment of the Mid City Centre and stage one of West!eld Sydney completes.

With zero vacancy across the super-prime retail division, no signi!cant sales have occurred due to property being tightly held in order to take advantage of the Pitt St redevelopment.

Prime retail strips comparatively have had a rough ride, with gradually alleviated pressures thanks mainly to government stimulus. Following the challenging retail trade environment throughout 2008, opportunities in the way of rental income growth have arisen after net face rents along Sydney’s seven prime retail strips dipped by an average of 6.7% to December 2009. However, over the past 12 months HTW has seen rents in particular areas reach unprecedented levels. These examples include

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3/732 Military Rd, Mosman, achieving $1,530 per sqm, followed closely by 84-88 Campbell St, Bondi Beach, with $1,375 per sqm, and !nally 310 New South Head Road, Double Bay, obtaining a $1,100 per sqm rental.

Private investors continue to form the dominant buyer group throughout the Sydney retail property market. With institutional investors preoccupied by capital raisings and debt management, market activity from these major players has been limited. Although more than half of all retail transactions captured throughout 2009 were made by private investors, 2010 should see institutional players becoming more involved as both buyers and sellers.

Growth in retail expenditure is likely to be moderate throughout 2010 as stimulus packages taper o" and interest rates rise. With the availability of debt funding likely to remain a key issue in 2010, however yields are expected to stabilise on the back of continued low supply and stable demand, despite anticipated increases to the o$cial cash rate. The reinvigoration of Pitt St Mall will raise the calibre of Sydney CBD super-prime retail, along with the re-opening of the Mid City Centre and the !rst stage of West!eld Sydney will see sales and leasing activity in this precinct increase from present levels.

Canberra

The retail market is generally experiencing low levels of tenancy turnover in the leasing market and low volume of sales.

The Property Council of Australia has indicated that Canberra currently has close to zero space in the pipeline for construction of retail centres, which is not surprising considering the amount of retail recently constructed.

The lack of retail construction in the pipeline for the ACT means any vacancy increases will be most likely because of negative absorption as tenant demand shrinks, and not due to supply issues.

All asset classes have seen a softening of market yields, but retail property with potential for increases in pedestrian tra$c and redevelopment/expansion potential should command stronger yields.

Blue chip tenancy is still the key and good real estate will do really well in a cycle like this that might be a bit testy for the next few years.

The ACT retail market o"ers prospective purchasers better opportunities in 2010 due to vendors now realising that yields achieved in 2007 are no longer realistic.

This retail property at 122 Alinga Street, City, recently sold.

With two storeys and basement, forming part of the historical Sydney building in the heart of the Canberra CBD, the building is currently tenanted by the Pancake Parlour, Zambrero Mexican Grill, Tasuke Restaurant & Crave Night Club. It was sold in January 2010 to a local business identity for $3.1 million, re#ecting an initial yield of around 10% and a rate per sqm (GLA) of $2,611.

Central, North & West NSW

The upper retail sector in most inland regional centres is divided into two broad categories, being strip retail located in the prime high pedestrian tra$c #ow areas of the CBD and regional shopping centres, which can be centrally located or can be destination centres. The high-end retail properties are anchored around the major national department retailers. Rental rates on a rate per sqm basis are higher in the shopping centres than in the strip retail properties by approximately 20-30%.

This sector has been slightly unstable over the past 12 months, with vacancy levels rising and downward pressure on rentals. Numerous reviews that have occurred over the past year have resulted in rental levels being maintained at previous levels with no increments. In some cases rents have declined. There have been very few new entrants into the market, and as such demand is low, supply is more than adequate.

Yields for prime retail property have been under downward pressure, however the lack of sales makes an accurate determination di$cult to assess; expectations are that yields have softened by 0.5-1.0%.

Going forward, we would expect to see an increase in sales in 2010 as seller’s expectations in relation to price become more in line with what buyers are prepared to pay.Additionally buyers are also being cautious in relation to current rental levels, ensuring that they are at market levels, and will not take a hit in relation to income at market reviews.

...this sector has been slightly unstable over the past 12 months...

Prime retail property was selling in the low 7.0% yield range and lower in some cases prior to late 2009, however sales would now be in the 8.0-9.0% range. We are aware of a major retail property in Tamworth where a yield above 9.0% for a $5 million plus retail property could be achieved. This is a considerably higher yield than what would have been achieved 18 months ago in the same locality.

Prime retail space in Dubbo is concentrated in the shopping centres, particularly the Orana Mall which is located outside the CBD. The dominance of the shopping centres in Dubbo has placed downward pressure on real income growth for the previously high performing retail premises in prime Macquarie Street locations.

Development of a new shopping centre in Bathurst, which is close to fully let, has seen an increase in vacancies amongst the traditional strip shopping areas, with rental

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levels stable to falling. A number of the tenants in the new centre have struck signi!cant incentives, although at much higher face rents. The impact of the rental deals, and whether the face rents are sustainable, remains to be seen.

The Orange retail market remains strong with very few vacancies. The Metro shopping centre has recently been refurbished and is close to fully let, whilst the prime strip retail area and Orange City Centre mall are fully let.

Southern NSW & Northern Vic

ALBURY

Within the Albury-Wodonga retail market high-end retail would best describe the local shopping centres such as Myer City Centre or one of the Centros such as Centro Albury. The retail market is fairly tightly held, with no recent sale to indicate any yield trend but the market is expected to be steady with solid tenant pro!les. The most likely buyers would be either institutions or syndicates.

WAGGA

The retail market in Wagga Wagga has remained quiet for a fairly long while now and there have been few sales of retail properties, let alone high-end retail properties. General retail properties range in value from around $600,000 up to about $1 million with higher-end retail selling for above $1 million up to over $2 million, though few sales occur at this level. At present there are a number of vacancies in the main retail area with vacant space taking a little longer to lease than previously.

Melbourne

The retail market is heavily in#uenced by the tenant’s ability to pay rent and the amount of disposable income available to consumers. The GFC initially reduced con!dence in the general economy, reduced the public’s willingness to take on new consumer debt and therefore lowered retail spending. Retail turnover data between November 2009 to December 2009 shows a decline, perhaps re#ecting decreasing disposable income due to three consecutive cash rate rises by the Reserve Bank late last year.

The high-end retail market ($3-5 million plus) appears to have peaked in late 2007, with rentals over the last two years softening as turnovers fell due to the slowing economy. Yields for this high-end price bracket increased mainly in response to a reduction in the availability of bank !nance, as banks limited their exposure to property lending. Notably, yields for properties priced below $2 million were reasonably resilient.

Limited retail sales during 2009 are showing mixed results, with prime retail property still achieving near

peak of market yields. A retail property at 508 Malvern Road, Prahran, sold after auction in November 2009 for $3.6 million, showing a yield of approximately 3.88% on the passing rental of $139,700 net per annum. This rental is considered to be at or about market levels, suggesting a reinvigorated market supported by pent-up investor demand. Further in December 2009, 209-213 Elizabeth Street sold at auction for $7.01 million, re#ecting a yield of 3.35%.

In recent times we have seen the re-emergence of retail strips such as Centre Road, Bentleigh, Bay Street, Port Melbourne and Brunswick Street, Fitzroy. These areas have become more desirable to a number of national, as well as local tenants, often being seen as more a"ordable locations than many of the aforementioned prime retail strips.

...the GFC initially reduced in the general economy....

Prime retail rentals for a ground #oor retail shop average $4,000-6,000 per sqm for the Bourke Street Mall and $2,500-4,000 per sqm for Collins Street. Substantial growth in rents occurred during the 2007 !nancial year. However, a change in consumer sentiment and a slow down in retail spending growth will probably subdue rental growth over the short to medium term, even with relatively low vacancies.

Typical buyers for prime retail shops are cashed-up wealthy private investors with limited need for bank !nance. High-end retail values are likely to be steady over 2010 as investors and retailers monitor the slowly improving economic outlook and sentiment and await increased consumer spending. Nevertheless, with the threat of further declines in consumer spending given further likely rate rises, there is clearly a risk that tenancy demand may drop and yields soften, with a resultant diminution of capital values.

Regional Vic

ECHUCA

There have been three retail sales in recent times in the prime shopping strip of Hare Street Echuca. One shop, occupied by Gazman on a !ve-year lease, sold for $750,000 at 4% yield, while R & J Music on the corner of Hare and Pakenham Streets is also believed to have been sold at a sub 5% yield (price undisclosed). A retail shop on the corner of Nish and Pakenham Streets, occupied by Leading Edge Computers, was recently sold for $520,000

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at an indicative yield of just over 5%. Meanwhile, the new Aldi store in Anstruther Street is expected to be completed by mid year and Bunnings has commenced construction at the old saleyards site on Ogilivie Avenue. There is further speculation that Harvey Norman is close to securing a site to commence operations locally.

MILDURA

Despite all the concerns about the economy, the fast food industry seems to always prosper. A third McDonald’s restaurant has recently opened in Mildura, a new KFC restaurant is under construction, and there is talk of another major food franchise looking at a prime site. All three sites have one thing in common - frontage to one or more busy arterial roads. The land purchases for the !rst two sites resulted in signi!cant premiums being paid, compared to recent sales evidence.

There are negotiations for a prime vacant site in Deakin Avenue at over $1,000 per sqm underway, with the purchaser intending to construct a service station.

Recent sales of prime inner city retail and o$ce premises have shown gross yields as low as 5.4% for a two-storey building, with a secure lease to ANZ bank and frontage to Mildura’s busiest intersection. However the majority of sales of good standard retail property have shown gross yields of between 7.0-8.25%.

A modern o$ce building, subject to a potentially long-term lease to Centrelink at a current rental of $243,776 per annum plus GST and usual outgoings, is currently being marketed and will be a good test of values at the higher end of the Mildura market.

Adelaide

The retail market is in a state of uncertainty, with recent trading !gures appearing to be relatively poor across the board and, therefore, retailers will be concentrating heavily on !xed costs, including rentals, as a means of minimising overheads. This process takes some time to come into e"ect, although vacant retail space may well experience di$cultly in letting at rental rates similar to that achieved during 2008 and 2009. In short, the balance is tipping towards the tenant that is ready and willing to lease premises as there will be increased opportunities and a broader choice in the coming 12 months.

The investment market for blue chip retail has remained strong with evidence of high quality tenancies on long term leases selling at yields ranging from 6-7.5%.

These prices have been in the up to $3.5 million bracket, but beyond that the market is relatively slow.

Brisbane

The Brisbane CBD comprises approximately 175,000sqm of retail space within enclosed shopping centres and 137,500sqm of freestanding retail buildings and strata titled retail outlets. The heart of retailing in the CBD is the Queen Street Mall, which is a 500m pedestrian mall providing a concentrated span of street-front shops, and further incorporates !ve prime shopping centres and four arcades. This prime retail area is the most highly sought after retail destination in the Brisbane CBD and is the largest shopping precinct in Brisbane. As such, the Queen Street Mall precinct, which also includes the surrounding streets, attracts the highest rental rates for retail space compared to any other location within Brisbane. The net rental rates in this prime retail location currently vary between approximately $2,500 and $6,750 per sqm per annum depending on the size of the tenancy and its particular location within the Queen Street Mall.

The properties in this precinct are extremely tightly held and are still transacting for a premium in the face of the broader property market which has experienced a general softening of capital values and yields. The Brisbane CBD prime retail sub-market is seeing very keen yields of 5.50-7.50% and realising high capital values in the order of $50,000-80,000 per sqm for smaller shops fronting the Queen Street Mall and $10,000-$25,000 per sqm for larger, mixed-use buildings in the precinct. This is a result of investors’ demand for property investments that are considered to be low risk and have a secure tenant base. This is evidenced by the 4.5% vacancy rate for street-front retail tenancies within the Queen Street Mall precinct. This vacancy rate is expected to remain relatively stable.

...the heart of retailing in the CBD is the Queen Street Mall....

There have been several notable transactions in the Queen Street Mall over the past 12 months which demonstrate these keen yields. 114 Queen Street sold in May 2009 for $11 million, or $19,504 per sqm, and an initial yield of 6.75%. 120 Queen Street was purchased in December 2009 for $26 million, or $11,144 per sqm, and an initial yield of 7.10%. However, another sale was recorded that tells a di"erent storey. 180 Queen Street was snapped up in August 2009 for $22 million, or $5,999 per sqm, and an initial yield of 8.01%, showing that there is still opportunity, albeit limited, in this market for investors with the appropriate funds to secure prime retail assets below normal market parameters. It must be noted however that this property includes multiple levels of o$ce accommodation above the retail space and the yield is re#ective of the risk associated with the poor state of the commercial o$ce market. In the present economic climate, the most common purchasers of prime Brisbane CBD retail properties such as these are high net-worth individuals. The listed property trusts which were so active prior to the GFC and exited the market en masse 12-24 months ago are only just now starting to re-enter the market as con!dence in the economy grows.

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The Queen Street Mall includes a number of enclosed, multi-level shopping centres, however, there are two which stand out from the pack. These benchmark properties include the Myer Centre and Queens Plaza. The Myer Centre is the largest shopping centre in the Brisbane CBD, with a gross lettable area of 63,822sqm over six levels. It is anchored by a Myer department store which leases 31,000sqm of space and has basement parking for 1,450 vehicles. The second largest is Queens Plaza with a gross #oor area of 35,948sqm over three levels. This centre focuses on high-end retail and is anchored by David Jones, which leases 26,651sqm of space. There is basement parking for 595 vehicles.

There are currently a number of signi!cant retail additions and refurbishments underway in the Brisbane CBD, including the completion of the Q&A Centre last year; the expansion of Woolworths’ current premises within the MacArthur Central shopping centre, occupying space formerly occupied by Crazy Clarks and Millers; and work has also commenced on a $100 million refurbishment of the Wintergarden shopping centre.

The general outlook for the Brisbane CBD prime retail property market is positive. The anticipated solid growth in retail turnover for 2010, coupled with an increase in e"ective rents (initially in form of a reduction in incentives), should see values in this sub-market increase. It should be noted that the growth in retail turnover will most likely be lower than that realised in 2009 as a result of the Government retracting its monetary stimulus into the population and the Reserve Bank of Australia increasing interest rates. Nonetheless, the Queen Street Mall is considered to be the most successful mall in Australia and will continue to record strong turnover growth, somewhat at the expense of secondary retail assets which are likely to continue to under perform.

Gold Coast & Tweed Coast

GOLD COAST

When people think of blue ribbon retail on the Gold Coast, the !rst thing that probably comes to mind is the Surfers Paradise glitter strip, or the ultra-trendy Tedder Avenue at Main Beach.

Central Surfers Paradise is typically stereotyped as being littered with souvenir and T-shirt shops. However, unprecedented development over the past 10 years has elevated its status to a legitimate retail destination that achieves some of the highest rental rates in Australia.

The regentri!cation of this area began with the construction of Chevron Renaissance and refurbishment of the Paradise Centre. The upgrading of the Surfers Paradise Boulevard streetscape also acted as a catalyst, improving the links between the already established retail strips along Cavill Avenue and Elkhorn Avenue. Soon to be completed developments, such as Soul and Hilton, will help cement Surfers Paradise’s reputation as a boutique retail destination.

Retail properties within Surfers Paradise are typically tightly held and achieve yield levels that are noticeably !rmer in comparison to typical commercial property throughout the Gold Coast.

However, this area is not, by any means, immune to market downturns. Recent sales of properties such as the McDonald’s building at 1 Cavill Avenue, the Priceline building at 3200 Surfers Paradise Boulevard and Louis Vuitton in Elkhorn Avenue, have re#ected yield levels ranging from 6.5-7.5%. In the peak of the market, it was not unusual for properties to be transacted at levels sub 6.5% or even down to 5.39%, as was the case with 1 Cavill Avenue in 2003.

For a long time, Tedder Avenue has been viewed as the Gold Coast’s premier destination for boutique retail, cafes and restaurants. Historically, businesses have thrived on the a%uent population surrounding Main Beach. Consequently, vacancy rates have been maintained at a comparatively low level due to the limited supply of retail opportunities within this strip. There have been reports, however, that retailers have been badly a"ected by the recent downturn in the economy and are crying out that rents have become una"ordable. Nevertheless though, we are yet to see any evidence which indicates the rental market in this area is falling.

...in the peak of the market, it was not unusual for properties to be transacted at levels sub 6.5%....

On the other hand, property values do appear to have taken a few hits.

In recent years, buyers were bidding aggressively to secure real estate within this tightly held precinct. This market was somewhat devoid of evidence for many years, however, we are aware of one buyer that accepted yield levels below 4.0% in order to secure a majority holding in a strata complex.

How times have changed!

Buyers now appear to be much more cautious in their purchase decisions, and are very critical of properties that have a new tenant who have not yet “proven themselves”. Such a case was evident at a recent Ray White auction, in which a strata titled unit on Tedder Avenue was o"ered for sale and did not attract a single bid.

It is not all bad news though. The property next door at 27 Tedder Avenue was also taken to auction on the same day and drew a degree of buyer interest. It did not sell under the hammer, however went into further negotiations at

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an initial yield of around 5.5%, indicating that investors are still willing to accept notably !rmer yield levels for this prime retail location. Interestingly, and not surprisingly, we have heard on the grapevine that this property was under contract for a substantially higher !gure some two years ago.

Whilst not yet in the same league as Tedder Avenue, Surf Parade at Broadbeach is a bustling destination for cafes, restaurants and retailers alike. This area has gone from strength to strength over the past !ve years, which is particularly evident on any given Friday or Saturday night. Rental rates in this area are somewhat akin to Tedder Avenue, however, the precinct still su"ers from a degree of tenant turnover and sporadic vacancies, which is recognised by the market through softer yield and value levels.

Other strong retail areas are the beachside commercial nodes at James Street, Burleigh Heads, and Gri$th Street, Coolangatta. Burleigh Heads, in particular, is a tightly-held pocket of strip retail development that typically comprises older style, one- or two-level buildings, on a 405sqm parcel of land.

Back in 2000–2002, these properties typically sold for $750,000-$1 million each. By 2004, they had crept up to around $1.5-2 million, and in 2006 a few sales cracked the $3 million mark.

Rental rates within James Street have continued to rise steadily, and now typically fall within the range of $600-800 per sqm. The most recent sales occurred in 2008 at investment yields within the range of 5.0-5.5% and value levels of $2.5-3 million, which indicates that value levels in this area have been more or less maintained.

Going forward, the Gold Coast’s blue ribbon retail precincts will always be underpinned by strong land values due to their proximity to the beach. Areas such as Tedder Avenue and Burleigh Heads have limited threat of additional supply coming online, adding to the security of these investments in the longer term.

Conversely, supply additions are considered to be the main threat for retail holdings within Surfers Paradise and Broadbeach, with #uctuations in the international and domestic tourism markets always present. Nevertheless, it is expected that all of these precincts will consistently outperform the remainder of the Gold Coast commercial market, due to the simple fact that beachfront retail holdings are a trophy for any investor.

TWEED HEADS

Lismore retail market appears to have experienced a reasonably signi!cant drop in retail rents over the past 12 months. As an example, the old Rockmans shop in a prime Main Street position was leased for $92,000pa, but is now vacant and listed with local agent for $60,000pa with limited interest. This scenario of decreasing rents has been repeated in some market review lease negotiations between landlord and tenant. .

...traditionally the Byron retail market survives on the peak tourist season...

Ballina retail market has been traditionally well held. While there has been some evidence of increased vacant space, landlords have still been able to achieve steady to slightly stronger rents.

Byron Bay retail market continues to experience steady demand. Retail spaces in prime locations have seen increases in rents. Secondary locations are seeing some vacancies and some downward pressure on rents. Local retailers are reporting a fall in turnover, as there are a number of national brand outlets increasing competition and forcing down prices traditionally achieved by the Byron Bay retailers.

Traditionally Byron retail market survives on the peak tourist season. The reported fall in turnover may see further vacancies over winter. However, Byron Bay has a continual in#ow of would-be retailers who take up vacant space and buy existing businesses to “buy a job”. This has generally seen rents hold or increase, even in poorer economic times and secondary locations.

Traditional investment yields have generally increased by 1.0-2.0% over the past two years.

Lismore now closer to 9.0%, while Byron Bay which previously showed yields at or below 5.0% now 6.0-7.0%, and Ballina is 7.0-8.0%

Sunshine Coast

Blue ribbon retail property on the Sunshine Coast is probably less about a price point and more about the old real estate adage, “location, location, location”.

The two areas that dominate retail discussion on the Sunshine Coast are Hastings Street, Noosa Heads, and the Esplanade, Mooloolaba. Both of these strips are dominated by strata titled properties that range in value from lows of $300,000 for arcade-style stratas, up to more than $3 million for larger streetfront stratas.

There have been few sales over the past 12 months in the Hastings Street precinct, however sales that have occurred generally indicate that yield levels have softened slightly and are now in a range from about 6.0% for prime space, up to 8.0% for secondary areas. This is a softening of approximately 100-150 basis points from the market peak.

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We have noted an increase in the level of supply on the market, with a mixture of well located and arcade-style stratas available. We have also noted a number of properties available to lease, however actual vacancies are yet to occur. Basically, a number of tenants have indicated that they will not be taking up options in the next 12 months and the agents are advertising these properties well in advance. This location may note an increase in vacancy as tenants struggle with the traditionally expensive space.

The Mooloolaba Esplanade market has also noted an increasing level of sales after a developer o"ering a number of stratas to the market during 2009. Two stratas have settled around the $1.8 million mark, with yields being around the 6.5-7.0% mark with long-term leases in place. More sales are imminent with discussions underway with purchasers.

Vacancy rates have also increased in this area, however there have been recent lettings to a number of vacant areas. There is a signi!cant reluctance by tenants to take up options at rentals above previous levels due to a slowing in general trade.

As it happens, Council has recently completed footpath upgrades to both locations, with new landscaping and outdoor public dining facilities available. This has improved pedestrian #ow, however tenant’s trade su"ered during this period.

Looking forward, it is likely that rental levels will stabilise, and in some cases drop away, if vacancy levels increase. Some local tenants may also be drawn from these locations to emerging retail precincts, such as Coolum Beach, with lower rental levels in comparison.

Southern Queensland

TOOWOOMBA

Prime retail tenancies in Toowoomba have historically been located within the CBD strip of Ruthven and Margaret Streets. This was the preferred location of most of the national retail chains and tenure was tightly held with very few vacancies.

This changed with the construction of modern shopping centres within the CBD, !rst with Village Fair in 1989 and then with Grand Central in 1996. Grand Central is a major regional shopping centre anchored by Myers, Coles and Target and has 145 specialty stores, a food court and cinemas. Upon the construction of the new centres, the big national retailers relocated out of the older CBD strip to the newer facilities. Grand Central is now considered the top retail location in the city and, consequently, achieves premium rental rates.

The older retail strip in Margaret and Ruthven Streets has become a secondary retail location, with a reduction in rental levels and quality of tenants. The secondary retail nature of the CBD strip is exasperated by the older nature of the buildings, which in most cases are di$cult to upgrade due to the limits in achievable rental in the location.

In times of economic downturn the traditional convenience retailers are often not signi!cantly impacted. The retailers most impacted when discretionary income is reduced are the high-end specialties. The exposure by smaller investors to this type of tenant is now reduced due to the movement of tenants to Grand Central.

In general, the Toowoomba economy appears to have weathered the GFC without signi!cant impact. Local specialty retailers did reportedly su"er a decline in turnover initially, but the long-term impact appears to have been minimal.

Central Queensland

ROCKHAMPTON

The retail market in Rockhampton is traditionally tightly held and there have been very few sales within the retail sector to enable us to properly gauge market sentiment. The most recent sale is a strip retail complex on Musgrave Street anchored by national food franchises and a couple of local tenants. The sale shows an analysed yield of approximately 9.3%.

There have also been sales of aged buildings within this precinct, and throughout di"erent areas of Rockhampton, purchased for eventual refurbishment/redevelopment. Accordingly, these sales show varying returns depending on quality and vacancy levels. An example is a sale in Allenstown of an aged, multi-tenanted building. The property was sold by an owner occupier who occupied 60% of the building which was vacant at the time of sale. The sale re#ects an overall yield of approximately 8.9% and achieved rents of approximately $150 per sqm.

...the Musgrave Street commercial precinct is also at similar rental levels...

Retail vacancies throughout the city are still relatively low and a few new leases have been entered into in the East Street Mall Precinct at gross rates of approximately

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$200–250 per annum. The Musgrave Street commercial precinct is also at similar rental levels. Local agents report that they are still receiving good buyer and tenant enquiries across all commercial sectors. They report that some incentives have been necessary in the retail market. However, incentives across the board are still minimal.

BUNDABERG

The main retail action in Bundaberg has been the marketing and sale of the Ryan Group Assets by Receivers and Managers.

Two properties have sold in the $3.4-4.3 million range. These have indicated yields well above traditional !gures in the 9.75-10.25% range. These are well located and good quality assets. One of the main factors behind the higher yield rates are considered to be the price range. There is a limited volume of purchasers who can meet the lending criteria in this price range. The perceived strength of the tenants and remaining lease terms were also considerations. Both sold in the order of $1,000 per sqm of lettable area, and one of the properties included a substantial area of spare land. The sale price indicates a signi!cant discount on the added value of the spare land as part of an investment property, when compared to commercial site sales.

Against these two sales was the purchase by Bunnings as the lessee of the Bunnings Retail Warehouse at $9.5 million, re#ecting a yield rate in the order of 8.25% and $1,398 per sqm of lettable area.

A group of retail shops/furniture warehouse was under contract in late 2009 at approximately $3 million, re#ecting a yield of 8.4% and $2,168 per sqm of lettable area, however the sale did not proceed.

...these are well located and good quality assets...

The last prior sale of a high-end retail property in Bundaberg was in October 2008 at $2.75 million. It was a four-tenant property built in the early 1990s. It sold at a yield rate of 8.5% and $3,362 per sqm of lettable area.

HERVEY BAY

The high-end retail market in Hervey Bay is still growing. This style of property is relatively tightly held and receives good interest once listed.

The proposed retail/commercial components of proposed buildings along the Esplanade will be predominantly targeted at the tourist market. A majority of the existing buildings are dated and generally identi!ed as redevelopment sites. The continuation of the slow residential unit market is, however, holding back any construction along this area.

Prime retail is predominantly focused around the CBD, Boat Harbour Drive, Pialba Place and Centro Shopping Centres. The recent announcement of the expansion to Centro may increase letting pressure as landlords attempt to stop tenants relocating and incentives may become more prevalent over the next two years.

Premises with nationally branded tenants generally attract up to a 0.75% yield premium, compared to other investment property. The most recent sale was a stand alone O$ceworks building in 2009 for $6.7 million or 7.4% net return, and another is currently listed for sale at a reported 7.5% return receiving good interest.

MACKAY

The Mackay CBD and frame provides the largest aggregation of retail and commercial facilities in Mackay, at around 110,000sqm of space. The two main shopping centres - Canelands and Mount Pleasant - together provide an additional 60,500sqm and suburban shopping/convenience centres provide approximately 18,920sqm.

Retail space has been fairly consistent at these levels over the past decade, but the proposed $210 million expansion of Canelands, to commence in April 2010 to incorporate an additional 25,000sqm of space including a Myer department store, and three new suburban convenience centres planned for construction over the next year will expand retail space, and increase letting pressure.

Retail property is tightly held, with no reported sales over the past quarter. Investors are interested in CBD opportunities but, at present, there are no notable listings of retail properties. Generally, the Mackay retail sector has come through the GFC with few battle scars.

Further regional expansion of the resources industry and a return to pro!t for the sugar industry augers well for retailers over the coming year, but the opening up of further space from 2010 could result in a di"erent story.

GLADSTONE

High-end retail in the Gladstone market mainly consists of retail properties located within the Gladstone CBD ranging between $275-350 per sqm. Other high-end retail properties can be found in areas outside the CBD in new suburban strip retail centres and larger bulky good centres, starting at approx $300 per sqm. The sales market for retail in Gladstone has been quiet over the previous 12 months, with agents reporting an increase in enquiry and a steady level of new lease negotiations. Prospective tenants and purchasers are displaying a cautious approach to the retail market; this can be attributed to the global economic recovery and uncertainty in quantum of the proposed industrial expansion touted for Gladstone.

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Cairns

The Cairns retail market had been strengthening slowly, but steadily for a number of years. However, while this trend started fading out at the start of 2008 and continued to fade during 2009, we now perceive the Cairns retail market to be at or near the bottom of the cycle. It must be also said that retail property sales in Cairns are extremely sporadic, and there have been no retail properties of signi!cance changing hands for some time. Most sales involving retail property have been of mixed use retail/o$ce buildings or tenant buyouts of single premises.

Despite the economic downturn presumably leading to a reduction in consumer and tourism spending, vacancy levels in the prime retail sector have remained stable, with high exposure CBD space near fully occupied. However some increase in vacancies in lesser exposure locations and/or on the CBD fringe has been noticed. Rents as a general rule have been static, showing ranges of $600-1,500 per sqm per annum for prime CBD space, and $1,000-2,500 per sqm per annum in key tourist precincts such as the Cairns Esplanade.

Yields for commercial properties in general in Cairns have eased back by about 10% from the record low levels observed at the start of 2008. Though true retail sales are rare in the Cairns market, we believe yields for retail premises have been steady in the 7.5-8.5% range, compared to the 6.75-7.25% range that prevailed at the start of 2008.

Townsville

With the current commercial market in Townsville best described as volatile, the retail sector continues to forge ahead with new developments.

Townsville City has been projected by PIFU to have the largest growth outside of south-east Queensland in the 25 years to 2031, increasing its population by 105,000.

With this growth forecast, together with Townsville’s broad based economy weathering the GFC relatively well, 2010 is shaping to be an exciting year in the retail market.

Townsville’s three major shopping centres have, or will this year, undergone major expansions, with Willows Shoppingtown completing its 13,000sqm expansion in October last year and Castletown currently undertaking its 11,000sqm expansion.

By far the biggest retail coup however, was the announcement that Stockland would undertake its $180 million expansion this year to incorporate a 12,000sqm Myer store over two levels. Myer has been committed to Townsville for a number of years, however with the impact of the GFC Stockland put its 2008 expansion plans on hold.

Throughout 2009 suburban retail shopping complexes continued to be constructed. These complexes o"er quality tenancy mixes, with a number of currently on the market providing good income streams and opportunities for investors, especially with interest rates remaining low.

This trend in suburban construction is likely to continue into 2010 with two new IGA Supermarkets and associated retail neighbourhood centres to be built.

Another sign of the increasing con!dence within the region is the announcement of a new 13,000sqm bulky retail outlet to be constructed at Fair!eld Waters to accommodate a new Bunnings hardware store.

...these complexes o"er quality tenancy mixes....

Over the past 15-20 years Townsville prime retail space has been located within the three major shopping centres. 2010 however, will provide a new facelift for the city heart with the current pedestrian mall being opened up to tra$c. A new $200 million six -level retail complex has also been earmarked for the CBD, however a commencement date has not yet been set. This retail centre will provide another dimension to the Townsville retail market.

This strong level of new development in the retail market of Townsville also signals con!dence of tenants, with pre-commitments on a number of these new developments required before they will commence.

Increasing business con!dence, coupled with the stability of the local economy, has ensured that new retail development for 2010 will continue to expand. New fashion outlets will open in Townsville as the population grows and consumer expectations for retail in our regional centres also grows.

Darwin

Darwin has one retail property that is a benchmark not only at the local scale, but nationwide. That property, visited by more than twice the population of Darwin every week , with over 50,000sqm of retailing space, 1,700sqm of o$ces and 2,400 car parking spaces, is Casuarina Square. It is owned by GPT. Most of GPT’s

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property portfolio of more than 60 properties has been valued over the last two years, and of those, only !ve other properties nationwide enjoy yields equal to or !rmer than Casuarina Square. Those with softer yields include several of Australia’s best known properties. This centre has been a great performer for decades.

Potential rival retail developers in Darwin would, therefore, be well advised to regard it as a Transylvanian Count wearing a black high-collared cape and sporting protruding canine teeth, vacuuming up retail demand for miles around, and even sucking the lifeblood from Darwin’s CBD retail, over 13km away. That is, despite the Territory’s statistics being the best of any in retail trade and low unemployment, when putting their necks on the line with Darwin retail development, they should be very, very careful.

Over the years, other Darwin retailers have rebelled against this destiny as the undead, and some even succeeded, for a while. Only a select few have indeed found sustainable market niches, thanks to getting everything right, especially by !nding major anchor tenants. But high-end retailers have had to look at Casuarina Square !rst, and – apart from the Smith Street mall for the more tourist-related retailers – see other areas as being somehow lesser for their purposes.

...those with softer yields include several of Australia’s best know properties...

While Casuarina Square dominates the northern suburbs, apartment construction dominates the CBD, and expansion to the south dominates the suburban sprawl. So there are pushes emerging against the pull, and a major part of Darwin’s retailing future could be in the hands of yet-to-be developed centres.

There are plans for many such afoot, from several at the CBD and nearby to serve the new apartment dwellers, to a major proposal at Coolalinga to serve the newly-developing suburbs south of Palmerston, and even the proposed new city at Weddell. But when it comes to high-end retail, look to putting them near the high-end incomes and the high property values. As such, the CBD has more and more going for it. Darwin CBD’s $7 million MY008 revitalisation project is under way, and in February the media referred to both a major development possibility on a large open car park site there, and the possibility of Myer coming to Darwin. Its editorial called the Myer news “bittersweet”, insofar as it was great if Myer would come to Darwin, but better still if it came to the CBD and not, as is rumoured, Casuarina Square.

Wait for the fat lady. There is good reason to believe that the Myer people who decide such things would be of a similar high calibre to those who chose the Casuarina Square site so long ago. As such, and with the above-mentioned new demographic realities, that does not necessarily imply that they would make the same decision now as was made back then. While the CBD may be down for the count, it may not yet be out.

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Perth

Prime retail property exists across all categories of retail properties, which include CBD, regional, sub-regional, neighbourhood and bulky goods. There is no hard and fast de!nition of what constitutes a prime retail property, although generally they can be segregated from non-prime retail by attributes such as price, location, quality of tenancies, WALE, size of catchment, and various physical attributes, such as modernity, tenancy mix, level of amenity and ease of access, to name a few.

The highest priced retail transaction in the Perth CBD for 2009 is sale of the David Jones department store, which is located at 622 Hay Street, Perth. It sold for $114.5 million and settled in November 2009 at a passing yield of 7.75%, to the Singapore listed Starhill Global REIT. The property was sold by Centro Property Group, which has been under signi!cant pressure in the wake of the GFC.

The most recent sale of a prime regional shopping centre is the $256.5 million sale of a 50% stake in the West!eld Whitford Shopping Centre by Dexus Property Group to its a$liate, Singapore’s Government Investment Corporation, at a claimed passing yield of 6.95%. However, the sale is subject to approval by the Foreign Investments Review Board and if allowed, settlement is due at the end of March. This sale represents the !rst regional shopping centre sale since the 25% stake in Karrinyup Shopping Centre sold and !nalised in January 2008.

A recent sub-regional shopping centre sale occurred in September 2009, with expected settlement due March 2010. The Kwinana Hub Shopping Centre had a sale price of $25 million at a passing yield of 10.26%. The shopping centre has reasonable average rental growth built into its leases and the sale includes 7,000sqm of surplus land o"ering further development potential.

Lifestyle Ocean Keys represents a 2007 built (GLA approximately 14,000sqm) fully leased bulky goods centre, comprising 19 tenancies, including Good Guys, Super Cheap Auto, Bedshed and Beacon Lighting, sold in September 2009 for $27.5 million at a passing yield of 9.68%, with a WALE of marginally under 5.5 years.

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There have also been a few other sales ranging in price from $1.7-11.6 million, with passing yields ranging from 6.9-10%. In 2009 there were 36 retail property sales in the state, totalling approximately $310 million. Overall sales in the upper end of the retail market have had little trouble achieving sales and turnovers are only really being restricted by supply. Generally properties in this section of the market are tightly held, with good national tenants on long-term leases incorporating reviews allowing for good growth to ensure maintenance of capital values. The buyers have been predominantly private syndicates and overseas institutional buyers who are generally cashed up. Generally the sales do not represent distressed sales, however, with debt markets being so constrained, some owners are looking to reduce their debt balances.

The main constraint in this sector is Perth’s restrictive trading hour policy, which is an issue that frequently appears in our local media. Although, sales turnover !gures for the state remain buoyant so consumers appear to be not really a"ected. The threat to this sector is that the tight lending conditions are a"ecting the smaller tenancies who !nd it di$cult to obtain borrowing for establishment and/or expansion. Recently, Stockland’s Matthew Quinn explained the company’s new role as !nancier for its tenants and for new tenants in an interview. Even though the amounts have not been great, the company recognises the importance of this contribution in terms of maintaining quality and range within its shopping centres.

...generally properties in this section of the market are tightly held...

As indicated in previous issues over recent years, the state’s economy has experienced unprecedented growth due to the expansion of mining activities, which were only brie#y challenged following the onset of the GFC. The WA economy continues to show good fundamentals, on the back of China’s high growth and demand for the state’s resources. Through the worst of the crisis unemployment in the state remained relatively low and owners of prime retail property had su$cient reserves, or at least were able to secure alternative forms of funding to see them through. Certainly retail property values did decline overall as yields improved, and this phase appears to have stabilised. The state’s optimistic short- to medium-term economic capital growths are tipped to remain #at as uncertainties in the !nancial sector remain high, bank lending will most likely remain constrained and rising interest rates will continue to dampen business and consumer outlook. Rising interest rates may also impact on sentiment, as increasing costs may curb consumer’s spending appetite, especially given the relatively high gearing of most residential mortgages.

South Western WA

The Woolworths site in central Busselton recently sold for $1.61 million. The site included a 2,833sqm supermarket occupied by Woolworths until 2027. There is a total of 4,137sqm of net lettable area on the site including café and Woolworths Liquor store. The site has three street frontages and adequate parking. The sale was in conjunction with the adjoining service station site, which is also occupied by Woolworths.

This sale follows on from a previous shopping centre sale in Busselton for $14.1 million in August 2008 which had Coles as its major tenant.

On a smaller scale, a retail shop in the main street of Margaret River sold for $1.375 million. This is a retail shop with a net lettable area of approximately 214sqm and has a current rent of $73,000 showing a yield of 5.3%.

Demand in the commercial market in the region can be summarised as steady with the number of enquiries increasing, however only a few are leading to !nished transactions.

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The month in review

The high end residential market has historically proved a litmus test for overall con!dence. Whilst the sector is made up of many people, there are plenty at these heady heights operating beyond the e"ects of minor interest rate rises. These fortunate souls are able to a"ord pretty much whatever they like for their dream property. As such, the sector can often take a sit and wait mentality or a bullish run at opportunities without having to beg the !nancier for every last dollar.

This month, the HTW o$ces have provided some engaging information on where the prestige market is heading in their patch. Some are seeing a real resurgence in this sector which bodes well for the overall con!dence of all real estate operators and the economy.

For a bit of water cooler discussion, a few of the contributors have also taken time to describe some of the extraordinary property our valuers get to see on an almost daily basis around the nation – a little insight for many on what it means when money is no object.

Sydney

The Sydney prestige market, although weakened throughout the duration of the GFC, saw only limited forced selling occurring, which was well below anticipated market expectations, though the market has seen many “silent listings” not advertised to the greater market.

The prestige market, though dynamic in geographic location, usually sees the $3 million mark as a minimum entry point, with higher-end prestige properties over the $10 million price level. The then “super prestige market” sees properties well in excess of $20 million.

Demand in all sectors of the prestige market remained weak throughout the past two years, though there were some cashed-up purchasers who made well-played/

speculative purchases in the $3-$10million price range with the super top-end of the market held stable due to a genuine lack of supply.

All sectors of the prestige market are currently showing positive signs of resurgence and increased stability/demand. Scores of media commentary regarding the pick up in the !nancial services sector has seen an array of bankers, investment advisors and traders lead the way in top-end purchases, as these sectors kick on post GFC and executive bonuses are again paid.

There still remains very limited activity at the super premium end of the market, with the most recent sale being that of Le Manoir in Bellevue Hill to Lachlan Murdoch for $23 million.

When analysing the prestige, market Herron Todd White research has seen remarkable !gures with regards to capital depreciation and demand in certain high-end suburbs. In the eastern suburbs, Vaucluse took quite a considerable hit over the course of the GFC, along with Mosman in the lower north shore and Palm Beach on the northern beaches. As markets appear to re-equalise again, there seems to be increased activity with some good gains yet to be made.

...all sectors of the prestige market are showing positive signs of resurgence....

Whilst some opportune speculative purchases were made at the lowest point over the GFC, it is generally considered the bottom of the market has now passed as prices pull back from their spiraling trend. Herron Todd White research indicates that while prices have bounced back, they are still generally considered below or at 2007 prices in most areas.

With prices rebounding amidst stronger prospects of economic growth, the cream of the crop across the north shore will see both Palm Beach and Mosman strengthen, after seeing the market signi!cantly weaken throughout the course of the GFC. At one stage throughout the crisis, up to three times the number of properties were o"ered for sale with eventual selling prices up to 20-30% below previous levels and expectations.

Residential Overview

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Within the Eastern Suburbs, many a%uent suburbs including Point Piper and Darling Point have seen a price stabilisation due to a genuine lack of stock, while beach suburbs such as Taramara and Bronte have comparatively showed some weakening. Demand-driven purchases are now beginning to rebound due to incremental growth in demand and, again, a lack of stock.

Based on these assumptions we can see that from late 2008 to mid 2009 there were de!nite indications that the market was weakening. While many buyers did try to make speculative purchases to take advantage of those forced to sell, this did not occur in many areas, with vendors holding stock tightly, awaiting signs of growing con!dence and stabilisation.

We can comfortably state the bottom of the market has well and truly passed, with steady increases in the number of prestige listings and a general feel that market levels are still below their previous peaks, with plenty of steam remaining in the buyer’s market.

With those forced to sell during the height of the GFC, price levels continued to plummet, none more notable than the Mosman property once owned by the head of Lehman Brothers Australia. The elevated 1456sqm property boasted extensive harbour views to the heads, !ve bedrooms, nine bathrooms and a four-car garage. With a reported value of $18 million mid 2008, the property was liquidated in June 2009 at $10.2 million, a remarkable 43% nominal drop.

With all the doom and gloom once associated with the prestige market there still remains standout opportunities, particularly in the prestige unit sector. With many high-end vendors unable to sell their properties in order to trade down to prestige top-end apartments, a large weakening in the market occurred as demand dried up and supply increased. Purchasers in the high-end unit market will need to search for stable price points in order to ensure they snap up a well-priced bargain.

Finally, on a lighter note, while overall building costs are high throughout this sector, most construction is reasonably pragmatic with a view to quality rather than personalised over-capitalised opulence. Perhaps a six-car garage turntable for a three-level apartment with its own Roman bath and imported French Oak #oors would prove a nice purchase in the current market! Or perhaps imported stone paneling walls with custom-!t prayer rooms would !t the bill. With top building rates running up to $8,500 per sqm plus, one would have to have an admiration for extravagance! Or perhaps a $240,000 garage in Brighton Boulevard, North Bondi would better suit the budget? Aston Martin’s do need secure parking these days!

Wollongong

The prestige market in the Illawarra has been quite slow over the past two years, but signs are appearing that the worst may be over. It seems most prestige home owners opted to hang on to their properties and weather the 2009 !nancial crisis. Prestige in the Illawarra starts at approximately $900,000. Prestige suburbs in the

northern suburbs all lie on the coast, squeezed between the escarpment, and start at Bulli in the south through to Thirroul, Austinmer, Coledale, Wombarra and Coalcli" to Stanwell Park. These suburbs are more like historical coastal villages rather than suburbs, and are highly sought-after addresses. We are starting to see higher sales volumes and better prices in these suburbs, indicating a recovery. Many properties have sold in the past 12 months in the prestige bracket

In the suburb of Bulli, there is a new and exclusive pocket by the coast called Sandon Point. In January last year, a 683sqm vacant block with 180 degrees coastal views was sold for $1.15 million. Covenants on blocks of land in Sandon Point ensure that only houses of the highest quality are built, with combinations of building materials on facades and no ‘project’ home structures. Sandon Point will be strengthened with the recent approval of a $22 million Stockland project to create a 181-lot residential subdivision within Sandon Point. The project has a long lead in time by all accounts and the sales will be spread over stages.

...undoubtedly, the most exclusive address in Wollongong is Cli" Road....

The suburb of Mangerton is probably the only real prestige standard residential suburb towards the centre of Wollongong, and only in selected streets. Although Mangerton is not on the coast it o"ers district views, a leafy outlook, larger blocks and a close proximity to the CBD. Mangerton is considered “old money”, consisting of some grand residences that have been passed on from generation to generation.

Just to the north of the CBD, in an area popularly known as North Wollongong, higher prices are achieved, generally for units, due to the location near the beach and cafes.

There has been an over-supply of prestige units in Wollongong for some time, but it now looks like the market is getting tighter, although selling periods are still lengthy. Undoubtedly, the most exclusive address in Wollongong is Cli" Road, stretching from North Wollongong south to the harbour, and on along a cli" overlooking the ocean. Three-bedroom, two-bathroom upper-level units on Cli" Road with views to the beach and harbour can sell for over $1 million, but they are tightly held and there are few sales. The “Blue Mile”, a pedestrian walk-way on Cli" Road starting at the harbour through to North Beach, has undergone some major upgrading with Federal Government assistance, making Cli" Road even more desirable, and taking the tired look away from an important part of the city.

To the south of Wollongong, one of the most prestigious localities is the Kiama area. It is favoured for its magni!cent ocean views, the famous blow hole, beaches and the river

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at Minnamurra. Kiama has a historical town centre which has been mostly retained by strict town planning controls and attracts many tourists.

Properties on the headland in Kiama Heights are highly sought after, but tightly held. The highest sale seen for some time is at 2 Gwinganna Avenue, Kiama. This is a !ve-bedroom, three-bathroom dwelling on an 854sqm block, which sold last September for $2.05 million. The property has expansive 180 degrees coastal views and last sold in 2004 for $1.87 million. Recently several other million-dollar properties have changed hands in the area from Minnamurra to Gerroa. As is usual for the Illawarra, the regional property market shows signs of recovery when the northern suburbs and Kiama markets start to move at the upper end.

When it comes to over-the-top prestige properties, our valuers have come across many opulent dwellings which may be over-capitalised in the current market. Generally they are in the better areas described above, but in some cases they are in newer suburbs, where cost is not going to equal value all the time. At present it is still the case that the market will punish properties that sit above the norm.

Canberra

Due to the fact that the Canberra property market for the most part held strong during the GFC, the e"ects of a local economic downturn have not extensively been witnessed upon the prestige sector of the market. Whilst sales may have slowed down in this period, there was no downturn as such.

Properties within close proximity of each other are often miles apart in price, largely due to the relative size of Canberra itself. As a result, prestige properties are found in isolated pockets, particularly in the more established suburbs surrounding the city centre such as Forrest, Red Hill, Reid and Yarralumla, all of which were established in the 1920s.

Age and unique speci!cations are the main factors that contribute to the prestigious properties, due to the rarity of well-built houses on large parcels in close proximity to the city.

One key factor that has allowed Canberra to ascertain a relatively high level of prestige properties is the demand for embassies in the locale. However, transactions in this market are expectedly limited, not only due to the prestige property market being much more thinly traded in general, but also due to the fact that these embassies have been tailored to suit the respective countries that occupy them.

The market last year still showed a signi!cant number of high sales within the prestige market, with a number of $2 million plus sales, including a $3.9 million sale in May 2009 in Forrest and a $4 million dollar sale in O’Malley for the Saudi Arabian embassy. Although the O’Malley sale is considered well above the market value, it is still re#ective of the steady position of the Canberra market in 2009.

Central, North & West NSWDUBBO

Demand and sale prices for high cost properties (above $400,000) in Dubbo has increased over the past six months, however most properties are still experiencing extended selling periods. In January 2010 Dubbo recorded its highest ever residential sale, with a property in Handara Close selling for $920,000. The property is situated in Delroy Park Estate and comprises six bedrooms, two bathrooms, three-car garage, large inground pool and spa and 365sqm of living. The dwelling is regarded as one of the most prestigious properties in Dubbo due to its location, size and quality !tout. It sold via private treaty after a marketing period of 3-6 months. The highest recorded sale prior to this was for a property in Pine Knoll Drive, which sold for $755,000 in October 2004.

The most sought-after locations for high cost properties in Dubbo are generally Delroy Park and Grangewood Estate, both of which have allotments with golf course frontage. In coming years Kintyre Estate, located on the edge of town with city views, is likely to prove popular, with a number of prestige residences recently built or under construction in this area.

...prestige price points in the region are around $500,000 for in town residential properties....

Within the Bathurst/Orange areas the prestige market has, in general, been quite stagnant in recent months and has experienced reduced volumes. However, this is starting to show signs of slight recovery, with sales volumes and enquiry levels increasing, as reported by local agents.

Prestige price points in the region are around $500,000 for in-town residential properties and above $600,000 for rural residential areas on the fringe. Within Bathurst, the prestige rural residential localities/developments are located at Wentworth Estate and White Rock, with both tending to demand a slight premium, compared with alternate rural residential localities.

South of Orange, areas surrounding Mt Canobolas tend to hold higher land values due to proximity to Cadia gold mine and the picturesque nature of the area.

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Newcastle

Prestige residential houses in the Newcastle City Council region are generally priced from $2 million, with the highest recorded sale in the past !ve years fetching $7 million in February 2008 for a house located in the premier suburb of The Hill. Since January 2005 28 $2 million plus house sales have been recorded,in Merewether, The Hill and Bar Beach.

The above numbers clearly show that the prestige houses are generally located in one of three suburbs, with all of these suburbs boasting coast frontage. The prestige properties will feature proximity to popular surf beaches, elevated beach, ocean, harbour and possibly city views, and proximity to the CBD and popular restaurants. There were a signi!cant number of sales recorded for both 2007 and 2008, however as the residential middle- and upper-end markets slowed in 2009 there were only three recorded house sales of $2 million plus.

Prestige residential apartments within Newcastle are generally priced from $1.75 million, with the highest recorded sale from the past !ve years being $2. million in October 2006 for an apartment located in a harbourfront complex Breakwater Apartments. Since January 2005 30 $1.75 million plus apartment sales were recorded.

Prestige residential apartments are all located within either Newcastle or Newcastle East and feature CBD locality, proximity to popular surf beaches, elevated beach, ocean and harbour views, large size and high quality !tout. Sale volumes continued to !rm throughout 2009, however this is more a result of the continuing supply of new apartments being released to the market. This market can show a premium being paid for the latest apartments that may not continue in the medium term if/when newer apartments are released.

What 2010 holds for the prestige residential market is a vexing question, however we would suggest that buyers will be about looking for property that is well located

.

NSW Central Coast

The mix of real estate on the NSW Central Coast is somewhat diverse, with #uctuations between the coastline strip, older and newer residential estates, high density areas to outerlying rural areas.

Last year will be remembered on the Central Coast as the “Year of the First Homebuyer”, with segments outside the !rst homebuyer range seeing little activity. The second and subsequent home buyer markets, along with the investor markets really did take a back seat, as did the prestige real estate markets.

The prestige real estate market is a segment which has almost always gone about its business in a quiet way. Even more elusive is the blue ribbon property market. Depending on one’s view, this level of property can either be located anywhere on the coastline or waterfront area, or the equally beautiful rural/residential areas.

The price point for these properties starts at the $3.5 million mark on the southern end of the coast and $2.5 million on the northern end. Real estate agents report that in the current market, the level of enquiry is good, with their main challenge being the lack of available properties suitable to the prospective buyers. It has been found that buyers in this segment of the market are patient and prepared to wait extended periods to !nd a home or apartment that meets their requirements. Once found though, negotiations are usually discreet, for those entering into discussions tend to avoid getting too much attention. But once started, negotiations are quickly !nalised with the quantum paid for the property being a secondary issue.

The main coast and waterfront suburbs which hold prestige properties include Pearl Beach, MacMasters Beach, Avoca Beach, North Avoca, Saratoga, Point Frederick, Terrigal, Wamberal, Blue Bay and Toowoon Bay. The rural/residential equivalents include Matcham, Holgate, Avoca Beach, Picketts Valley, Somersby, Yarramalong and Dooralong.

...last year will be remembered on the Central Coast as the “Year of the First Homebuyer”....

A few examples of blue ribbon sales over the past year include a four-bedroom property wit direct frontage to Brisbane Water at 57 Village Road, Saratoga, for $4.65 million It was last traded in March 2005 for $4.2 million. A record price was set when beachfront property at 48 Coral Crescent, Pearl Beach, sold for $5.8 million after previously being sold in 1996 for $730,000. A penthouse apartment within The Lighthouse complex which occupies a headland position at 6/15 Cli" Avenue, Avoca Beach, sold for $4m.

When talking about blue ribbon property, it is not unusual to hear of some unique feature, however, the Central Coast seems fairly sedate when it comes to the bizarre, strange and quirky. Some examples found over time include a fully-equipped stable complex with veterinary

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facilities and covered dressage arenas, a seriously equipped hidden panic room, with an equally seriously equipped cellar with back-to-base monitoring, the odd helipad, private chapels and a private skate park.

NSW Mid North Coast

There is a small quantity of residential property selling above $1 million along the mid north coast of New South Wales, with the prestige market throughout generally starting at around $750,000. The old adage “Location, Location, Location” holds true and most prestige property is likely to have a good proximity to water (ocean, canal, river etc).

The most exclusive property market is at Paci!c Palms and Seal Rocks, where premium values are paid for good proximity to beach. Over the past !ve years, land values alone for direct beachfront property hovered around $2.25 million, with the highest house price achieved being $3.5 million in April 2008. Nearby non-beachfront houses generally need to be of a modern, substantial size and have a high quality !tout to be classi!ed as prestige.

Following a two-year lull in sales activity, there have been three recent $1.45 million plus sales at Paci!c Palms in November 2009, including a non-direct beachfront house at Boomerang Beach selling for $2.5 million, which suggests this premium market has only weakened mildly in recent years following regained purchaser con!dence in the economy. This market sector is also unique in its low percentage of owner occupiers, being mostly investment driven from holiday-derived income or the dream ‘weekender’ holiday house. Outside of this area, most of the mid north coast region’s prestige property is owner occupied.

In nearby Smiths Lake and Coomba Bay, recent prices for residences having good lake frontage generally peak at $750k, elsewhere in the Great Lakes region premium property prices likewise gravitate to water. The upper-end market in Forster/Tuncurry peaks around $1.05 million for coastal houses with panoramic ocean views or an urban aspect, $735,000 for canal frontage property and $950,000 for substantial quality houses on periphery acreage. Sales activity for premium high-rise units ($750,000+) have declined in recent years through over supply and weaker demand, particularly from investors.

...over the past !ve years, land values alone for direct beachfront property hovered around $2.25 million...

For the Greater Taree region, premium prices are usually paid for a position upon the Manning River, and this is evident in six recent riverfront sales spanning from $645,000 in Wingham, to a market high of $950,000 in Pampoolah for 31 hectares. Such sales further con!rm a renewed economic con!dence and no signi!cant decline in premium property prices. Outside of riverfront property, the premium residential market generally comprises good size modern dwellings on acreage ($550,000 to $700,000) for which demand has noticeably weakened, possibly a result of tightened borrowing following concerns over

future interest rate rises.

In Port Macquarie to the north, the highest recent sale was a $1.65 million riverfront dwelling in December 2009, though sales of this type are infrequent. Canal front property has recent highs in the mid $900,000’s and $1.1 million has been achieved for a house overlooking Lighthouse Beach. Sales activity for premium high-rise units ($800,000+) has declined in recent years through over supply and weaker demand from both owner occupiers and investors, however there was a recent penthouse sale at $1.3 million opposite Town Beach. Mansion-style dwellings located in the Hastings region’s semi-rural areas, such as Kings Creek and Sancrox, remain volatile to over-capitalisation following weakened demand from purchasers for non-prime locations.

In general, those vendors of prestige property who are able to wait out extensive listing campaigns - sometimes up to two years - are able to achieve good sale prices, particularly for prime located land with !nite supply, such as beachfront or riverfront. Forced sales of prestige property, such as a $1.525 million near beachfront duplex at Boomerang Beach in November 2009 or a $650,000 substantially size house at Kings Creek, have shown that discounts in of 10-20% may be required to achieve a sale. This is the main caution for prestige property along the mid north coast at present.

Southern NSW & Northern Vic

ALBURY

High-end properties are purchased for owner-occupier purposes in our region, and any residential properties with a value of $500,000 or more are categorised as prestige properties. Properties in these markets represent a lifestyle choice and tend not to yield high returns in comparison to other property investments.

The GFC and national economic downturn appear to have minimal negative a"ect on the prestige house market in the Albury/Wodonga region. Market evidence shows that prices for prestige and executive-style houses remained steady throughout 2009. There is little evidence of decreasing values.

However, most local agents reported that the consumer con!dence has improved, but not enough. Prestige quality homes in some areas are showing the e"ects of over capitalisation, with many of these dwellings

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realising purchase prices lower than owner and agent expectations.

The prestige market should continue to improve, as strong economic growth and falling unemployment, along with Albury City Council investing in the city by upgrading infrastructure and parklands etc. This is giving purchasers con!dence to buy premium homes. One of the local agents stated, “No doubt, prestige properties continue to be highly sought after in our region. I would love to reserve more stocks, because once you’ve got the stock, there are buyers there.”

This interesting prestige property at 15 Brewer Drive, Wodonga, sold for $980,000

The magni!cent property in Wodonga on a 3,869sqm block is the perfect haven for families who are looking for plenty of space for kids and pets to romp or swim in the pool. Mum and Dad can keep an eye on things while relaxing under the patio. The home features !ve bedrooms, three bathrooms and a four-car attached garage. Site improvements include in-ground pool and extensive paved areas. The property enjoys good north-easterly views.

WAGGA

The prestige price point within Wagga Wagga is the over 600,000 mark. There are higher valued properties of over $1 million, but these usually includes acreages, such as a working farm.

Over the past 18 months this market has su"ered the most in Wagga. We have seen little activity and price levels stay virtually dormant. The majority of Wagga’s prestige properties are located within either Lake Albert or the old part of Central Wagga. Lake Albert is famous for its view across the lake, while central is the oldest part of Wagga, with its period homes and tree-lined streets, as well as its close proximity to the CBD and racecourse. Developing suburb Tatton is just starting to realise sales prices around this threshold.

The market has generally been stagnant due to the large gulf between vendor’s expectations and what purchasers are prepared to pay. As this price point is lower than in capital cities the mortgage pressure on vendors is far less. So what we’ve been seeing is a stalemate between vendors and purchasers, with vendors prepared to wait until markets improve.

The best example of a prestige property sale in Wagga is at 38 Trail Street, Wagga Wagga (Central) for $850,000 in December 2009. This property was a detached, circa 1900, single-storey, rendered, !ve-bedroom, two-bathroom, prestige house, with corrugated metal roof and study. Ancillary improvements include an inground pool. The property set on 1,505sqm has very good internal and external condition and excellent presentation. This property fetched a very good price and indicated that prestige property market in Wagga could be on the move. However, due to the small size of this market there aren’t any obvious opportunities available.

...the prestige price point within Wagga Wagga is over the $600,000 mark....

The most over-indulgent feature within a prestige property in Wagga we’ve come across is a fully-tiered movie cinema, complete with full screen and surround sound for the complete movie experience.

LEETON

This market does not have too many blue ribbon properties in the price range of $1-5 million. The prestige range for the area is $800,000 to $1 million, however these types of properties very rarely sell. Sales for these types of properties occur every 1-3 years.

The main market in Gri$th is in the middle,, where homes sell from $250,000-400,000. There have been a reasonable amount of sales over the past three months. The main market in the Leeton/Narrandera is the lower- to middle-end, where homes range in price from $150,000-260,000. There have been limited sales in this area over the past three months.

Melbourne

Incorporating the municipalities of Maroondah (Ringwood/Croydon area) and Yarra Ranges (Lilydale and surrounding Yarra Valley and Dandenong Ranges rural fringe areas), prestige here normally means $1 million plus, and more often than not comes in the form of small acreages, sometimes with equestrian associated improvements. These are called lifestyle properties.

Maroondah has provided only one $1 million plus sale so far in 2010, at 204 Jumping Creek Road, Wonga Park. This !ve-bedroom, eight-room dwelling on 4.9 hectares of land sold for $2 million in January. Wonga Park is known as a prestige rural/residential township, with three land sales so far this year - two around the 600sqm area for $355,000 and $385,000 and a 6,000sqm block for $482,000, which was only a 30% increase in price for 10

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times as much land. Apart from the $2 million sale, only three other improved sales have been reported, ranging from $540,000 to $674,000 for three- or four-bedroom dwellings on land of 570–2,000sqm.

Statistics can produce some very strange results, particularly with low volumes of sales, but the median price for Wonga Park so far in 2010 is $540,000. This shows a 35% drop from the $830,000 median for the second half of 2009, but this can be attributed mainly to the normal density/low density/small acreage mix in the sales changing, rather than an actual drop in values.

Longer term trends for Wonga Park show that the median price increased 134% during the !rst half of the 1990s and only 20% during the second half of the decade, which included the global !nancial crisis.

Yarra Ranges has provide four $1 million plus sales so far in 2010, ranging from $1.05 million to $1.67 million. All came with substantial houses on 1-8 hectares of land in the rural townships of Woori Yallock, Seville, Mount Evelyn and Narre Warren East,

The volume of sales in this sector has been quite low so far this year and should be described as thinly traded..Past factors a"ecting this sector have been business con!dence, interest rates and unemployment. The Victorian bush!res are still fresh in Victorian’s minds and will probably continue to have a dampening a"ect on particularly small acreage property in rustic areas on Melboune’s outer fringe, even in areas not a"ected by the recent bush!res, such as Eltham, Warranyte and Wonga Park.

Data sourced from the REIV/Realestateview database

...past factors a"ecting the sector have been business con!dence, interest rates and unemployment....

Regional Vic

ECHUCA

Once the GFC hit and liquidity became an issue, people were less prepared to indulge in higher-end property until they knew what the extent of the fallout might be. Consequently, properties in the very top bracket of the local market proved di$cult to move. Twelve months on, and high quality property is once again attracting buyers, in particular, those with a central location or in close proximity to the Murray River.

The market for property of this nature remains only thinly traded, with limited demand and supply, and is better established in Echuca rather than Moama. Several sales of three-bedroom townhouse type accommodation have been achieved in the $550,000 bracket for Echuca, while there appears to be a threshold of $400,000 for similar developments in Moama. Several properties in Moama pitched at higher levels have failed to attract buyers to this point.

Rural residential properties appeal to a di"erent sector of the market, and we have seen several solid sales of between $700,000 to $1.3 million for properties on an acre or two in close proximity, or on, the Murray River. Price is dependent on the setback from the river and quality of the improvements. Like with most regions, the attributes of location, quality of !tout and extent of ancillary improvements are all important, while well maintained and presented older properties, boasting a history and heritage, have been favoured above more modern prestige dwellings.

GIPPSLAND

Latrobe Region

The Latrobe market is considered to be very stable at this juncture, with properties on the market for a short period of 14-28 days in Traralgon. The lower end of the market is continuing to show a very strong performance. \ Buyer enquiry is very strong, with agents advising a shortage of stock and demand outstripping supply.

East Gippsland Region

The lower end of the market continues to be strong with good volumes of sales. The higher end of the market is showing a static performance, but also showing an increase in sales. There has been a good volume of vacant land sales, and properties below the $250,000 price range have seen an increase of approximately 10% over the previous 12-month period.

Overall for both regions, the general market shows no indication of slowing with the reduction in the First Home Owners Boost.

MILDURA

Prestige residential property in Mildura is almost solely property fronting the magni!cent Murray River, predominantly on the New South Wales side of the river, due to it being higher land, not because of the state, and within 10km of the heart of Mildura. The NSW town of Gol Gol, 7km east of Mildura, is the region’s ‘Toorak’ and has the two premium riverfront subdivisions referred to as Carramar Drive and Riverbend Estate. Riverfront properties in these estates have a land value of around $900,000 and most developed properties are in the $1.5-

$3 million price range.

Generally $1 million is the price point for prestige in the region and the highest sale price for a house has been $2.9 million for a Carramar Drive riverfront property in 2007.

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The prestige market has been very slow and two properties in the $1.2-$1.6 million price range have been on the market for over nine months and met with limited interest. With the depressed horticultural outlook in the region, it is likely that the prestige market will remain slow for some time, until a greater degree of con!dence emerges.

Evidence suggests a drop in value in the prestige sector since the peak of late 2007 of around 15% and no improvement in recent times has been evident.

Adelaide

The prestige residential market has held up relatively well during the latter part of 2009 and early 2010. Whilst purchasers are still remaining somewhat hesitant in making buying decisions, ultimately prices for higher-end properties of good quality have held !rm. The market that has fallen away in recent times has been the upper-end properties that have some perceived fault. Buyers in this high-end market tend to be more discerning in their purchasing decision and if there is some fault, defect or negative issue surrounding the property then the set price is more di$cult to achieve.

Prestige property tends to relate to properties in excess of $1.5 million, with the market ceiling at the present time being around $4 million. There are properties of a greater worth than this amount in the market, however they do not sell very often. The cream of the crop in terms of higher-priced properties appears to be the inner southern suburbs, with a couple of properties in Unley Park selling very well in recent times for prices around $3.3 million to $3.5 million.

...the market that has fallen away in recent times has been the upper-end properties that have had some perceived fault...

The general feeling within the prestige residential market is that it has fared surprisingly well through 2009, and it remains to be seen if prices hold during 2010. Our feeling is the good quality properties will hold their value, while the second-tier prestige properties may su"er to some extent due to a decline in demand.

Brisbane

The Brisbane prestige sector is taking its cue from the great global military forces at present – Shock and Awe. On the face of it, it’s di$cult to make sense of how those with the dollars are viewing the prestige sector in the great South East, but dig a little deeper and the logic begins to form.

Case in point – there appear to be plenty of $5M+ buyers in our city but just not enough stock. One near city agent has been ringing his hands with a couple of big dollar

buyers just chomping at the bit to get into some serious Brisbane prestige but, unfortunately for this deal maker, there just isn’t enough super high price stock to sate their appetite – (I’d just like to say at this point if they’re willing to lower their expectations just a little, I may have a nice little 3 bedder in Paddington that I could be convinced to part with for $4.9M cash!...). We understand that in the past, those buyers with a lot of available dollars have become frustrated with our city’s more conservative high end construction nature and taken their money to areas such as the Gold Coast where they really know how to glam up the top end.

By our count there have been about six sales in the past six months for more than $7M, which is startlingly strong for our city.

The driver seems to be that operators in this bracket – the truly wealthy – haven’t been the hardest hit by the general economic slowdown. Most owners have been willing to hold onto their homes and wait out the doom and gloom, and those that do sell probably have some need to. Notably, buyers in this bracket are often also immune to economic woes and are willing to pay the price when the appropriate property comes along.

It is also obvious that these buyers want land. The bigger the block, the better – it provides plenty of privacy and ensures there is room for the family to run around. It’s been rumoured one recent buyer from out of town was amazed that, if you can !nd them, the ability to buy large parcels with beautiful homes within 5 km of the GPO for

under $12M seems like a steal.

Some notable recent sales in Brissie include:

“Glenworth” - 34 Howard St, Paddington – sold for $10,350,000. A 6053 sqm parcel in one of the most city’s most sought after streets. The property has a restored 1890’s heritage listed property which includes six bedrooms, four bathrooms, gymnasium, pool, tennis court and a croquet !eld – only possible after the previous owner parted with a tidy sum to buy out a neighbour.

22 Sandford St, St Lucia – $7,750,000. This location includes some of the most desirable real estate in Brisbane and river frontage accounts for the suburb’s premium positions. Whilst not a large block at 885sqm, this property has views down two reaches of the river and takes in the CBD skyline. The home provides 430sqm of living and accommodates three bedrooms, study, four bathrooms, home theatre and cellar. The property has a !ve-car garage and also includes a private pontoon at which to moor you tinnie.

The #ipside to all of this is the $3M - $5M market, which seems to have become a hard sell. Our valuers have

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reported a number of riverfront homes in traditionally desirable areas such as Chelmer hitting the market with barely a ripple from buyers. We are even aware of the recent sale of a riverfront three level contemporary home on 600 sqm in the city suburb of West End for a mere $2.5M… an extraordinarily good buy for a very, very well located residence. This market does have a number of sellers who were over extended and now need to get out or face trouble.

...the only danger with the high-end attached houses is the ability for resales to stay strong....

In the unit market, few pundits could look past the successful debut of the Aquila in New Farm, a Tom Dooley project which has recorded an eye-popping result for our town. Ten units on ten levels (that’s right, by complex algebra that equates to one unit per #oor) that have been progressively selling since earth was turned onsite. At the time of the building’s release in November 2009 only a few remained available for purchase and as at the time of publication we understand there is only one left on the market. Price? Starting at $5,100,000 and peaking at $6,600,000 for the penthouse, each unit has a living area of about 320sqm, outdoor area of 100 sqm, media room, C-bus automation and a !nish that is about as good as it gets. Whilst the location and the city views will have played a major hand, there will be some avid Tom Dooley followers who have purchased on the developer’s reputation for going all out on projects.

The only danger with the high-end attached houses is the ability for resales to stay strong. The Riperian tower broke local records when it sold most of its units o" the plan for between $1.5M and $2.5M in 2005, only to then surprise again when resales started cracking $3M+. Of late, however, the heady honeymoon has cooled. At last count, nine of the units were back on the market, with two of those being listed by pretty keen vendors. Resales in this landmark project may be worth watching.

The upshot appears to be that Brisbane has been a little conservative in its construction #air at the high end but there are those who are looking to lead the charge to change and may well handsomely pro!t from their foresight.

Gold Coast & Tweed Coast

GOLD COAST

Whether it be known as prestige or luxury, properties of this ilk in the Gold Coast region are many and varied in both price range and location. Our property market over $2,000,000 includes lifestyle hobby farms with sprawling homesteads, whole #oor highrise apartments and penthouses, canal/waterfront suburban houses and those on absolute beachfront.

To summarise, the prestige residential real estate market is not what it used to be but is de!nitely on its way back. Leading the charge is the waterfront market with the majority of sales occurring within Sovereign Islands, Sanctuary Cove and Surfers Paradise.

Volume of sales in 2009 was approximately 50% of that during the boom of 2007 and 77% of the sales volume achieved during 2008.

Besides the slide in the volume of sales, prices softened across various sectors. The strongest performing location over the past 12 months was Sovereign Islands with 26 sales over $2,000,000.

The highest sale within the past 12 months was 72 The Sovereign Mile, which sold in November for $9,000,000 and comprises a seven bedroom, eight bathroom house built over three levels with a twelve-car basement, total #oor area of 1,834 sqm. The property is situated on 1,475 sqm, west facing to the canal.

52 The Soverien Mile.

Submarine dorr to basement cellar to protect cases of grange from !ood.

Turntable (ala Batman and Robin) in basement carpark to enable easy exit.

The Gold Coast beachfront market is possibly monitored too closely in the national press due to the prices achieved and identities prepared to pay them. The past 12 months has been a period of consolidation, with a

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number of sales at the hands of receivers and prices well below those achieved previously. However, these sales appear to have found an equilibrium and we consider this market to have bottomed.

The most recent sale on Hedges Avenue, Mermaid Beach is an old, two-storey, 1960’s !bro house on 405 sqm with 10 metre frontage for $4,500,000. Another property along Albatross Avenue has achieved $6,500,000. The Palm Beach beachfront has experienced volatility in prices due to recent storm erosion, however, a current sale at $2,800,000 suggests con!dence has returned to this section of our coastline.

Whilst not exactly beachfront, Currumbin Hill generally attracts strong enquiry due to the larger allotments and view corridors. 14 James Street sold at auction last week for $8,200,000 which sets a price record for the southern end of the Gold Coast. The property comprises a !ve level, !ve bedroom, six bathroom house with four-car accommodation, two swimming pools and a total #oor area over 1,622 sqm. The property has 360 degree views including the Burleigh headland and Coolangatta skylines and land area total of 1,949 sqm.

Taking into account the sales activity in the beginning of 2010 it appears that consumer con!dence is beginning to return to this market sector and we consider the prices have stabilised. There is some sentiment that prices will improve within the next 12-24 months and that now is a time of opportunity. The Gold Coast prestige market is closely linked to volatility of the stock market and performance of Sydney prestige markets as well as the Gold Coast development industry. There is no doubt that 2010 is going to be an interesting year closely monitored by many people and that those having the fortitude to make a step now could be well rewarded.

Unique features

As cost becomes less of a factor in construction budgets, owners wanting something di"erent are including features such as: salt water marine aquariums (up to $50,000), Glass commercial lifts ($150,000), turntables on garage #oors, or even submarine doors to protect their valuable ‘Grange Hermitage’ from #ood.

TWEED HEADS

The market for prestige properties within Northern NSW was a"ected by the GFC and reduced market con!dence throughout the majority of the 2009 calendar year. Demand slowed and values softened throughout 2008 and into mid 2009. However, increased buyer enquiry and market activity have occurred in this sector of the market during the latter period of 2009 and into the early stages of 2010, creating greater stability in the marketplace. A good example of stability within the unit sector of the

prestige market is a resale of a duplex unit in Lighthouse Road, Byron Bay. The unit was purchased near the peak of the market in May 2007 for $1.84 million and resold in November 2009 for $2 million.

The prestige market within regions of Northern NSW generally relates to properties priced at $1-$1.5 million. Suburbs which generally include prestige residential properties include Ballina, East Ballina, Lennox Head, Brunswick Heads and Ocean Shores/New Brighton. However, prestige properties within Byron Bay and its surrounding localities, including Su"olk Park and Broken Head, generally relate to properties priced above $2 million and extends to $7 million or above. The prestige property market within Northern NSW also includes rural residential properties situated within the hills west of Byron Bay, such as Ewingsdale, Coopers Shoot, St Helena, Possum Creek, Coorabell, Bangalow, Myocum and Federal, and rural localities surrounding Mullumbimby, Alstonville and Ballina/Lennox Head.

There has been increased activity (both sales and enquiry) noted within the $1-$1.75 million price brackets from October 2009 to the present time, with sales occurring in both the standard residential and rural residential markets. However, the market for properties priced above $1.75 million generally becomes slower and is a"ected by a reduced buyer market. Leading agents are also reporting that it is still di$cult to obtain any form of commitment from potential buyers if asking prices are not considered to be realistic. There is also resistance within the lower priced prestige market, up to $2.5 million, due to a combination of tightened lending markets and contracts being conditional upon the sale of existing property, which are generally also situated within the prestige market.

...there is also resistance within the lower priced prestige market...

Byron Bay is the most consistent area in which prestige properties are traded. Within Byron Bay is the exclusive Wategoes Beach precinct which comprises a total of approximately 90 properties, 15 of which are situated along the beachside Marine Parade. This precinct is situated below the Cape Byron Lighthouse and the majority of properties have a north aspect over the beach, ocean, Julian Rocks and Mountain Ranges to the north-west. Since the mid 1990s, Wategos Beach has continued to establish itself as a prestigious enclave. There has been one con!rmed sale occur along Marine Parade for $5.5 million. Due to limited stock available for properties within Wategoes Beach, premiums have historically been paid for available product. An improving market and renewed con!dence may see premiums return to the marketplace within Wategoes Beach.

There have been several sales of prestige rural residential properties above $4 million since October 2009 within the hills of Byron Bay. These sales include a property at Myocum for $4.15 million. This property comprises 30.5 hectares of generally cleared land with distant ocean glimpses and views to Cape Byron. Then property comprises a !ve-bedroom, four- bathroom pavilion-style dwelling with extensive ancillary improvements. A further sale includes a property at Goonengerry, near Federal, for $7 million. This property comprises 33.92 hectares of moderately undulating land which falls to the

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rear boundary and river frontage. with dual residences – one new and an older Federation-style. The property also includes extensive good quality ancillary improvements.

Sunshine Coast

The prestige residential property market on the Sunshine Coast is still considered to be properties that are $1 million and above, however in the last cycle these properties have become more common. What typically sets these properties aside from the norm are that they are by nature discretionary, and are more of a want, rather than a need. Subsequently, in the last downturn the prestige market on the Sunshine Coast has been the hardest hit.

One of the best-known coastal regions in Australia is the Noosa area on the northern Sunshine Coast. A substantial number of homes within this prestige market are being used as holiday homes. When the market turned the !rst thing to go was the holiday home. Subsequently, we have a number of examples where values have fallen dramatically.

46 Masthead Quay

An example of this is a property in Masthead Quay, Noosaville. This property is an architect designed, four- bedroom, three-bathroom dwelling with 33m of canal frontage. The property was previously sold in April 2004 for $3.05 million and was sold in May 2009 for $2.3 million. This indicates a decline of approximately 25%.

The central and southern Sunshine Coast prestige markets have also been a"ected, however it would appear to be to a lesser extent as there is a higher ratio of owner occupiers within these localities. Subsequently these owners have been able to hold on through the stormy weathers, however owners who have had to sell have shown some decreases of up to 20%.

...one of the best-known coastal regions in Australia is the Noosa area on the northern Sunshine Coast....

It would appear that over recent months the prestige market appears to have stabilised somewhat, as the number of home owners that have been forced to sell have already done so. Therefore we are left with vendors that appear to be able to hold on under the current circumstances, however only time will tell.

Interestingly, there have been a couple of strong sales in the $5 million plus market within the central Sunshine

Coast. A house in Millgrove Place at Buderim was sold in June 2009 for $6.5 million, a record in the area.

Also a house on Minyama Island, Minyama, sold in November 2009 for $5.7 million which is also a strong sale. These sales are both to local owner-occupiers and goes to show that there is still buyer interest for properties within this upper price sector.

As any agent will tell you, achieving a sale in the current climate is still di$cult. Bringing vendors, who are after the highest price for their property in a slow market, and buyers, who are only interested in getting a perceived bargain, together is still fraught with some pain.

Southern Queensland

TOOWOOMBA

The prestige property market in Toowoomba is primarily con!ned to the eastern escarpment and environs and usually has positive attributes such as a range view, large lot size, desirable street address and quality home with a street presence.

The price point which separates the prestige market from the balance of the market is considered to be generally around $800,000. Prestige properties, however, comprise a small percentage of overall sales in Toowoomba, with 23 recorded sales in 2008 and 16 sales in 2009. Other areas which have recorded some sales in excess of $800,000 are in Blue Mountain Heights to the north of Toowoomba, and Cotswold Hills which is a suburb on the western outskirts of the city.

Good interest is currently being shown in this market, with a property recently going to contract for over $800,000 after 50 parties had inspected it within a short time frame. Two recent sales which demonstrate that Toowoomba has a sound prestige market are in Tourist Road and Mayes Street. The Mayes Street property sold for $2.8 million and the Tourist Road property, which features range views, is under contract for an undisclosed price, but in excess of $2 million. This property had been listed for some time with an asking price in the high $2 million bracket. A property in Burraway Court, which is located on the south east side of the city and features a large home, tennis court and panoramic range views, sold recently for $1.25 million. A large home in Curzon Street sold for $880,000 in December 2002 and resold in May 2009 for $1.25 million. This sale demonstrates the underlying strength of this market segment.

An interesting feature of the Toowoomba prestige market is the number of new house constructions with build costs in excess of $1.5 million. An example is in Campbell Street where an existing property was purchased for $1.25 million with the intention of demolishing the existing house and constructing a new prestige dwelling on the site. Other large home constructions are in progress in Kara View Drive and McStay Street, locations both o"ering panoramic views.

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The prestige property market in Toowoomba at present is considered sound, with good interest being shown in properties that can meet buyer’s expectations.

IPSWICH

The prestige property market in Ipswich is limited to the Brookwater golf course estate in the Greater Spring!eld area. Property values in this sector range between $700,000 to more than $1 million. This sector, like most higher-end markets in the country, has experienced an easing in values over the past 18 months.

There’s an increasing number of mortgagee sales occurring in this estate, which in most cases has represented a loss of up to 10-15% on the initial purchase price. Some properties have been on the market for periods of up to 12-18 months and have been greatly reduced to achieve a sale. This inherently comes down to the high cost to construct a prestige property in this location, with most “build” contracts being upward of $600,000. The di"erence between the cost to build and sale prices being achieved in the current market is between $100,000 and $200,000. This mostly applies to the prestige properties with golf course frontage, while properties without golf course frontage are still holding their value.

...there’s an increasing number of mortgagee sales occuring in this estate....

Central Queensland

ROCKHAMPTON

Prestige property in Rockhampton is mainly located on the upper eastern slopes of the Athelstane Range, where homes include large Queenslanders, many which have been extensively renovated and provide city views. Other prestige property can be found along the #ood-free banks of the Fitzroy River. It is only in relatively recent times that sales have broken the million-dollar barrier. We saw a record sale towards the end of 2009 set a new benchmark of $1.4 million. This was one of four sales over the $1 million mark at that time. Previously sales over $700,000 were considered the cream of the crop. This section of the market is still thinly traded but has survived the GFC well. The prospect for the future remains bright, on the back of established industries and growth in the mining industry.

Similarly on the Capricorn Coast, prestige property is thinly traded, and focused on geographic features, rather than particular suburbs. Beachfront property, elevated homes with good views and, more recently, a select number of penthouse units, make up this market. Again, the million-dollar market is something of a threshold, although houses have sold to $2.4 million over the past 18 months. Slow but steady demand, an optimistic coal mining sector, low vacancy rates and strong employment will allow the prestige market to gain more momentum.

BUNDABERG

The Bundaberg prestige residential market is mostly focused on Esplanade or waterfront property in Bargara. O"-the-plan sales in a new prestige apartment development on Miller Street, Bargara, have been in the $1.15-$1.35 million range. In two instances, a purchaser has combined two units to be redesigned as a four bedroom and media room apartment with a purchase price in the order of $2.6 million.

Older houses on Woongarra Scenic Drive have sold in the order of $900,000. A penthouse apartment in a !ve-year-old complex on the Esplanade sold recently for $880,000.

The prestige market is generally slow, however sales have been occurring for the right product at the right price.

HERVEY BAY

The prestige Residential Market on the Fraser Coast comprises Esplanade front properties, rural residential properties, renovated ‘Queenslanders’, modern architect-designed dwellings and penthouse units.

Generally homes above $700,000 on the Esplanade are considered to fall into the prestige market, and those above $600,000 for non-Esplanade properties. Strong marketing campaigns are required for both sectors, however those non-Esplanade front properties are competing with homes that have a view and are located opposite the beach, so may require a reduced sale price in order to attract buyers.

Although located on the Esplanade, some of the dwellings listed in the prestige price range would not be considered prestige homes. Their location, views and size of land make them potential redevelopment or renovation sites though. The market in this price range seems to be steady for the region, with agents and owner-occupiers con!dent the market will again go ahead. An example of this con!dence in the current market is the recent sale of a house and #ats located on the Esplanade which had been relisted for sale approximately $200,000 above its previous sale price in October last year.

Fittings and !xtures in houses in the prestige market include pools and entertainment areas, added bathrooms and bedrooms, which lift prices, rather than luxury items such as lifts and home automation. There are a few standout properties trying to attract prestige buyers with inclusions such as sensor taps, imported tiles, security systems and high quality !ttings and !xtures.

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There isn’t the demand for prestige homes to be produced on a large scale in this region, like there is in areas such as the Gold and Sunshine coasts. Generally homes are built for owner occupiers, with few available at any one time to create oversupply issues.

The upcoming mortgagee sale of 21 units in the Peppers Resort complex includes !ve penthouse units. With little sales evidence over the past 12 months, the market will be eagerly awaiting these results as they will most likely set new benchmark levels

MACKAY

The prestige market in Mackay had been pretty stable prior to the e"ects of the GFC. The unprecedented prosperity of the mining boom helped push the Mackay market to strong growth, including the prestige sector. The downturn in the mining sector coinciding with the !nancial crisis throughout late 2008/early 2009 took its toll, especially on the prestige sector in the Mackay Region. Prestige properties in the region are generally considered those above $750,000, however agents were reporting very little demand for properties listed above $600,000. Values in the top end market fell up to 20% in some areas.

...billions of dollars in new mining projects in this region has con!dence levels on the rise....

It has become evident that the New Year has brought a new sense of optimism to this market sector. The economy in the Mackay region is heavily reliant on the fortunes of the Bowen Basin coal industry, situated to the west of Mackay. Billions of dollars in new mining projects in this region has con!dence levels on the rise. Agents are reporting increased interest in the prestige market, across both coastal and city areas. A local agent has reported !ve properties under contract at sales between $750,000 to $1.025 million within the last month.

GLADSTONE

Generally, the prestige property market in Gladstone starts at approximately $650,000-$700,000 for Tannum Sands and Boyne Island. These prestige markets were very quiet over the !rst two quarters of 2009, with only a handful of sales, however sales activity has picked up in the latter months of 2009, albeit at a level reduced from the original list price. Over the past 12 months there have been only two sales over $1 million. The two sale properties were located in the Catalina Heights estate of South Gladstone, o"ering good water views and high quality dwellings in a modern estate.

In most cases a property will display two of the following attributes in a prestige property in Gladstone: large, new high quality dwelling, situated in a rare location or in a prime position in a new estate and o"ers a view over a rural setting or has water views.

Properties which have views that avoid the overwhelming presence of an industrial development in Gladstone would o"er something valuable. Furthermore, beachfront properties in Tannum Sands and Boyne Island o"er a valuable feature.

Cairns

The prestige housing sector is hard to de!ne in Cairns, but would generally be accepted as $1 million plus. This market would cover houses along the beachfront of the Northern Beaches, plus a smattering of homes in other parts of the city, particularly in the more elevated areas of suburbs such as Edge Hill, Whit!eld, Mooroobool, Earlville and Bayview Heights. However. many of the beachfront houses valued at $1 million or more are not necessarily prestige houses as such, but they are executive-style houses that happen to be positioned in a prestige location with high underlying land values.

Houses in the $1 million plus category are thinly traded, with most entrants into the sector tending to custom build, rather than purchasing an established home. There were only 28 house sales in Cairns priced at $1 million or more during 2008, and this reduced to approximately 15 sales during 2009. Though hard to quantify due to the low number of sales, prices for prestige houses have reduced over the last 12-18 months in line with the general Cairns market movement.

The Cairns prestige apartment sector consists of a number of penthouse units in recent developments in the CBD, Palm Cove and Trinity Beach. There have been 18 reported sales of $1 million plus apartments in Cairns since the start of 2008, of which 14 have been developer sales, and the remainder resales.

An example of a recent sale is a modern high quality 13th #oor four-bedroom, three-bathroom penthouse unit in the Cairns CBD with 233sqm of living area and 89sqm of balconies, which sold in December 2009 for $1.7 million. The property had been previously purchased at the height of the market in April 2007 for $2.4 million.

Around the Cairns region there are small pockets of prestige housing located in Port Douglas, especially on Wharf St/Flagsta" Hill, and some in Mission Beach.

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Townsville

Stability and con!dence are the buzzwords for the residential market in 2010.

The median house price in Townsville plateaued throughout much of 2008 and the !rst part of 2009, as a result of stronger market activity within the lower end of the market.

During the later part of 2009 however, the median house priced started to rise, surpassing the previous peak of $373,000 in November 2007, to record a new record high of $376,000.

This increase in median sale price has been compositionally driven, with more activity in the mid to upper end of the market bringing up the average. The prestige market entry point is around the $550,000 mark and, as can be seen from the graph below, the volume of sales in this price bracket has increased throughout 2009.

There are two tiers of prestige property within the Townsville residential market - those priced between $550,000 and $750,000, representing the executive suburban homes, and those priced over $750,000, representing the premium prestige lake/river front properties up to the cream of the crop, being the inner city product o"ering elevated views.

This higher-end prestige market represents a relatively thin sector, with the current level of supply and demand in equilibrium somewhat. It is very much an emotional market, with purchasers willing to shop around for the best !t product. The main attributes of the cream of the crop residential houses in Townsville are location, size of house and views o"ered.

Value levels in this market have softened from the highs of 2007, with bargains available for the cashed-up buyer.

Tasmania

HOBART

The prestige market in Hobart is a relatively small..

Since the Global Financial Crisis (GFC) hit the prestige residential market has been extremely slow, with agents reporting tough times. Many properties that were transacted in the past couple of years saw a reduction in value and extended selling periods were commonplace. However, agents are now reporting that there is more interest in the top end of the market.

The prestige market in Hobart is considered to be for properties priced over $1 million. However, it could be argued that there are prestige properties in the fringe locations priced over $850,000. The suburbs considered to house most of this price bracket are Battery Point, Sandy Bay and the Hobart CBD. Suburbs surrounding the CBD - such as Glebe, North Hobart, West Hobart and South Hobart - all house prestige properties, particularly those which display heritage or character qualities.

There are also pockets of prestige property located on the eastern shore of Hobart, namely along Victoria Esplanade at Bellerive. These properties enjoy esplanade frontage and generally uninterrupted views over the Derwent River.

...many of the properties that were transacted in the past couple of years saw a reduction in value and extended selling periods were common place ....

The market is on a slow recovery. Auction clearance rates are only 40% in Hobart at present. Since the GFC, there has been perceived bargain hunting within the top-end property market. Many people have been forced to sell their higher-end stock for whatever they could get. There have been a few examples within the above listed suburbs where a house has been bought for around $1 million in 2007 only to hit the market and sell for 10% less in 2009. However, agents are now reporting that there is de!nite interest in the prestige market, with one inner city agent having three properties go to contract in the past two weeks for more $1 million each. These properties have all been on the market for in excess of six months.

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With more con!dence back in the market and improved consumer sentiment, those fortunate enough to be able to purchase in this price category are returning to look for opportunities that may exist. Buyers aren’t rushing in, but there are de!nite signs that the market is on the recovery and improve.

LAUNCESTON

Launceston’s premium market kicks in at about $600,000, with 25 sales at or above this level in 2009..

Through the !nancial crisis of 2009 our market withstood many of the pricing shocks experienced elsewhere in the country. We had two sales above the magic $1 million level, compared to four during 2008. The top price achieved was $1.38 million for a multi-level 1880 home on a 1440sqm site in York Street. In 2008 the top price was $1.35 million for a 1900 centrally located dwelling on a 1209sqm site in Lord Street. Interestingly, there were eight sales above $800,000 in 2009, compared to nine during 2008; a re#ection on the stable nature of the market.

At present we have around 20 properties on the market above $800,000 of which 13 are priced at $1 million or above. These !gures exclude the 14 apartments available within the old hospital building redevelopment which is currently nearing completion. This complex has an apartment available for $3.5 million which, if achieved, would certainly set a benchmark for the city.

During 2009 we saw completion of some prestige quality dwellings. Of particular interest was a substantial horseshoe-shaped home built around a courtyard and swimming pool with river views at Dilston. Building costs for these better quality prestige homes can approach $3,500 per sqm.

Moving forward through 2010, once the election is out of the way in March, we are expecting a steady as it goes market, with no great surprises on the up or down sides.

Darwin

De!ning prestige property in a maturing market such as Darwin is di$cult, due to upwardly shifting parameters in acceptable price ranges and the di"ering life cycle stages of prestige locations. Local prestige market benchmarks, such as $1 million for detached dwellings, have experienced a signi!cant reduction in purchasing power in some modern and developing locations. However, a rough guideline for Darwin prestige property could still be considered around $1-3.5 million for detached dwellings and around $800,000-$2 million for the unit market.

...the outer rural residential prestige market continues to be bolstered...

Whilst the economic downturn has undoubtedly impacted on large sectors of the prestige property market in the eastern states, any slowdown in detached prestige properties in Darwin has been negligible. However, sales

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growth of inner-city prestige units does appear to have slowed in Darwin.

Recent inner-city prestige developments have experienced lower rates of o"-the-plan sales, resulting in a large amount of completed top-end stock on the market. Whilst there is insu$cient evidence to suggest that this increased level of stock has adversely impacted on sale prices, there has been comparatively stagnant growth and increasingly volatile sale prices achieved. The inclusion of ‘cash back’ deals on some prestige units have recently begun to emerge, indicating developer frustration at stagnant values and prohibiting transparency in sale prices. Both of these factors serve to distort the market, making it more di$cult to interpret. This represents a risk for investors, due to potentially distorted/in#ated sales !gures on some prestige units used as a sales tool by vendors. Furthermore, the amount of remaining prestige unit stock in the market will prevent any signi!cant growth in this sector in the short to medium term.

Reasonable demand for mid-range units (considered mid-$500,000-$800,000) has continued, although some of the new stock provided has been recon!gured into one- and two-bedroom units. This may indicate an e"ort to di"erentiate from the existing stock of prestige priced three-bedroom units, but mainly to address the a"ordability factor for Darwin’s young ‘professional couple’ demographic. The sustained demand for new stock in this con!guration and price range can be exhibited by the successful presale campaign in The Avenue complex (the second stage of the original Hastings Over Mindil development in Parap).

The market for detached prestige properties continues to experience growth in both the established and developing prestige suburbs. Demand for the inner prestige suburbs of Cullen Bay, Larrakeyah, Fannie Bay and the seaside suburb of Nightcli" remains strong, driven by lack of availability and comparatively large allotments. Similarly, the tightly held rural residential prestige suburb of Knuckeys Lagoon, which o"ers large allotments (typically two hectares plus) and dwellings to match, appears to have weathered any potential downturn.

The outer rural residential prestige market continues to be bolstered by rising values in surrounding mid-range suburb land prices, notably subdivisions in Herbert and Humpty Doo. New transport infrastructure and the Coolalinga shopping centre development are expected to underpin growth in established prestige rural residential property prices around the Howard Springs area in the short to medium term. Meanwhile, several large parcels of outer rural land are set to be auctioned o", due to non-payment of rates amid ownership confusion stretching back over the last century. Whilst certainly not prestige

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land, it does represent a unique opportunity for owner-occupiers and budding developers alike, with sites ranging from 4000sqm to 129 hectares.

The developing northern suburb of Lyons has continued to experience growth, with a noticeable increase in the number of sales nudging close to, or achieving, the $1 million mark. There have been three settled sales above $1 million and a further three in the $900,000-$1 million range since June 2009. The masterplan suburb of Lyons is a good example of the Darwin market maturing. Properties achieving the $1 million mark prior to 2007 were generally characterised by unimpeded water views, stellar location and/or exceptional design features. The suburb of Lyons has neither of the former two components, however, due to increasing costs of construction, diminishing land stock within Lyons, strict building covenants (such as green rating requirements) and the size of dwellings, the standard cost of house plus land within this subdivision is rapidly approaching the prestige benchmark. The question is, does this transform Lyons into a prestige suburb, or indicate the market’s acceptance of a new price point for recently released metropolitan masterplan stock?

Meanwhile, the modern prestige waterside suburb of Bayview has maintained consistent growth as it becomes more established, through less building sites and more maturing trees and gardens, and actively competes with the old money suburbs of Larrakeyah and Fannie Bay for high sales. There were seven settled sales of $1 million or over in Bayview during the second half of last year alone.

Despite the continued growth of the prestige market sector, the middle market is still considered the sector capable of maximum pound-for-pound sustainable growth. Darwin did not appear to experience any tangible value depression in the prestige market during the recent economic turmoil. However, investment in the prestige unit market is currently considered to o"er insu$cient opportunity for capital appreciation relative to its current risk pro!le, linked to a potential oversupply situation. Whilst the detached dwelling prestige market is indicating continued steady growth, it seems unlikely that participants across Darwin’s prestige sector will be able to realise the elevated short-term gains potentially available on recovering interstate property in the face of renewed !nancial con!dence.

Perth

The Perth premium property market can be summed up pretty easily at the moment. For $57.5 million you could have purchased a riverfront mansion on 8700sqm of prime land in Mosman Park. Unfortunately for those with a larger cheque book than most, the property has been snapped up by a Western Australian mining magnate. If the price seems exorbitant, keep in mind that the land alone probably made up most of the purchase price, let alone the three dwellings, tennis courts, cinema, jetty etc that sweetened the deal.

The sale of Angela Bennett’s mansion was an injection of adrenalin to the WA property market and created a sense of con!dence in the battered premium sector. An example is 18a Fraser Road in the riverside suburb of Applecross, which sold for more than $7 million within the !rst weeks of marketing.

These sales tell an interesting tale, although Perth’s premium property market is generally more a"ordable, with prices generally starting at $1.5-$2 million and stretching along the coastline from Coogee to Mindarie and around the banks of the Swan River.

Whilst the media is happy to broadcast that Perth’s median house price is back at peak levels, this has largely been caused by trade-up buyers in the $600,000-$1.5million range and a decrease in !rst home buyer activity. Generally speaking, values in the premium property market remain below peak levels.

...the sale of Angela Bennett’s mansion was an injection of adrenalin to the WA property market....

Sales activity has increased in most of the traditional blue chip suburbs such as Cottesloe, City Beach, South Perth and Applecross, although stock levels remain reasonable through Dalkeith and Claremont.

It seems that many opportunities remain for the astute buyer, whether it be targeting properties that have been advertised for extended periods and are now over exposed, or accepting that auctions are a way of life and being bold enough to bid.

Buyer sentiment is extremely varied – either the next boom is imminent or the real GFC is about to happen. Predicting market movement in the next few months is tricky, to say the least. The majority of buyers remain cautiously optimistic, and, hopefully, fortune favours the brave. And let’s not forget, little old Perth has now achieved the highest residential sale in Australia, and yet a larger, more ostentatious dwelling is currently under construction and the cost alone easily surpasses this record sale.

South Western WA

“They’re back” is the comment that springs to mind when we look at the top end of the market in the South West. From one end of the region to the other, these most desirable of properties have dragged themselves out of the sales doldrums, where they resided since the GFC crashed in on the margin call set.

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One point of note is that the region o"ers very di"erent price points in what is considered prestige. If we look at Bunbury, where a solid 1980’s (if somewhat dated) dwelling o"ering 180 degree ocean views sold recently for $800,000, we can see that any property over $1 million is top draw material. When we compare that to Eagle Bay, near Dunsborough, where properties reaching $5 million dollars are not considered extraordinary, then the extremes become obvious.

Agents are reporting prestige property sales in all these localities, which wasn’t the case up until six months ago. The majority of sales prior to that time resulted from !nancial distress, and at almost (relatively) giveaway prices. Prices had fallen by 30 to 40%.

Currently, we are seeing properties being sold after having been on the market for 18 months to two years (due to the vendor not being prepared to drop their price). These properties are selling at prices similar to the levels seen just prior to the GFC. Evidence suggests that there hasn’t been movement past those levels, but the market has recovered the lost ground. Vendors are also returning to the market after holding o" listing during the slump.

One marketing point built into an upmarket beachside holiday rental property, was the inclusion of two master suites. The theory was that these types of properties were often hired by two families to defray costs, but one couple always got the worse bedroom, so the solution was two equivalent master suites. That way at least Mum and Dad are happy and the kids can !ght it out from there.

All in all, the market for prestige properties could be described as balanced, with the traditional blue ribbon suburbs remaining in favour and experiencing steady numbers of sales at reasonable prices. In reality, a balanced market is a description that could be applied right across the spectrum. The middle market is dominated by clients moving up the scale and the bottom of the market is now supported by investors, while the !rst home buyers are less active since the reduction of the government boost.

In our opinion, having this balanced market can only be a good position for the industry, and long may it continue.

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Abu Dhabi, UAE +971 02 4173581 admin.abudhabi@htwmena.comAdelaide, SA 08 8231 6818 admin.sa@htw.com.auAlbury/Wodonga, NSW/VIC 02 6041 1333 admin.albury@htw.com.au Bairnsdale, VIC 03 5152 6909 admin.bairnsdale@htw.com.auBathurst, NSW 02 6334 4650 admin.regionalnsw@htw.com.au Brisbane Commercial, QLD 07 3002 0900 bris.admin@htw.com.au Brisbane Residential O$ces, QLD 07 3353 7500 brisbaneresidential@htw.com.au Brisbane – Rural Queensland, QLD 0417 753 446 kerry.herron@htw.com.auBunbury, WA 08 9791 6204 admin.bunbury@htw.com.auBundaberg/Wide Bay, QLD 07 4154 3355 admin.bundaberg@htw.com.au Busselton, WA 08 9754 2982 admin.busselton@htw.com.auCairns, QLD 07 4057 0200 admin.cairns@htw.com.au Canberra, ACT 02 6273 9888 admin.canberra@htw.com.au Darwin, NT 08 8941 4833 admin.darwin@htw.com.au Deniliquin, NSW 03 5881 4947 admin.deniliquin@htw.com.auDubbo, NSW 02 6884 2999 admin.regionalnsw@htw.com.au Echuca, NSW 03 5480 2601 admin.echuca@htw.com.auEmerald, QLD 07 4980 7738 admin.emerald@htw.com.au Gladstone, QLD 07 4972 3833 admin.gladstone@htw.com.au Gold Coast, QLD 07 5584 1600 admin.gc@htw.com.au Goondiwindi, QLD 07 4671 5300 admin.goondiwindi@htw.com.au Gosford, NSW 1300 489 825 admin.gosford@htw.com.au Gri$th, NSW 02 6964 4222 admin.gri$th@htw.com.auHervey Bay, QLD 07 4124 0047 admin.bundaberg@htw.com.auHobart, TAS 03 6244 6795 admin.hobart@htw.com.auHorsham, VIC 03 5382 6541 admin.horsham@htw.com.auIpswich, QLD 07 3282 9522 admin.ipswich@htw.com.au Launceston, TAS 03 6334 4997 admin.launceston@htw.com.auLeeton, NSW 02 6953 8007 admin.leeton@htw.com.auMackay, QLD 07 4957 7348 admin.mackay@htw.com.au Melbourne, VIC 03 9642 2000 admin.melbourne@htw.com.au Mildura, VIC 03 5021 0455 admin.mildura@htw.com.auMudgee, NSW 02 6372 7733 admin.regionalnsw@htw.com.au Newcastle, NSW 02 4929 3800 admin.newcastle@htw.com.auNorwest, NSW 02 8882 7100 admin.norwest@htw.com.auPerth, WA 08 9388 9288 admin.perth@htw.com.au Port Macquarie, NSW 1300 489 825 admin.portmacquarie@htw.com.auRockhampton, QLD 07 4927 4655 admin.rockhampton@htw.com.au Roma, QLD 07 4622 6200 admin.roma@htw.com.au Sale, VIC 03 5143 1880 admin.sale@htw.com.auSunshine Coast (Mooloolaba), QLD 07 5444 7277 admin.ssc@htw.com.au Swan Hill, VIC 03 5032 1620 admin.swanhill@htw.com.auSydney, NSW 02 9221 8911 admin.sydney@htw.com.au Tamworth, NSW 02 6766 9898 admin.regionalnsw@htw.com.au Toowoomba, QLD 07 4639 7600 admin.toowoomba@htw.com.au Townsville, QLD 07 4724 2000 admin.townsville@htw.com.au Tralagon, VIC 03 5176 4300 admin.tralagon@htw.com.auTweed Heads, NSW 07 5523 2211 admin.nc@htw.com.au Wagga Wagga, NSW 02 6921 9303 admin.wagga@htw.com.auWhitsunday, QLD 07 4948 2157 admin.mackay@htw.com.auWollongong, NSW 02 4221 0205 admin.wollongong@htw.com.auYoung, NSW 02 6382 5921 admin.regionalnsw@htw.com.au

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Contacts

The information contained in this report is provided in good faith and has been derived from sources believed to be reliable and accurate. However, the report is not intended to be comprehensive or render advice and neither Herron Todd White nor any persons involved in the preparation of this report, accepts any form of liability for its contents.

This report is Copyright, and cannot be reproduced without written permission of Herron Todd White.© Herron Todd White Copyright 2009

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CENTRAL NORTH & WEST NSW

WESTERN PLAINS DUBBO

The major force in the marketplace at present is the level of funding and the di$culty in gaining funding, with serviceability becoming a higher priority than loan value ratios. Purchasers have agreed to a particular price only to have !nance unavailable or not approved.

Irrigation water in the Macquarie and Lachlan Valley would be considered in a state of #ux, with the government o$cially able to still purchase water to lower the pressure on the Murray-Darling Basin, however it would appear that there is little to no purchasing taking place at present. Government purchasing in the water market has put a #oor across most valleys, most noticeably the Macquarie and Lachlan Valleys. Without this government intervention markets would be set by other growers and investors. Should the current situation continue, some softening of values in both the Macquarie and Lachlan River systems is expected.

Should the Government retire from the market, Macquarie water values would be in the vicinity of $1,000 per megalitre, rather than $1,200-1,250. Without the Givernment purchasing, Lachlan River water would be approximately $500 per megalitre, rather than the current $600-700 per megalitre.

New benchmark value levels are expected to be set for dryland cultivation in the Walgett District this year, with values of $1,980 per ha ($800 per acre).

CENTRAL TABLELANDS ORANGE/MUDGEE/BATHURST

Recent widespread rain has signi!cantly improved the rural outlook over the past six weeks. The majority of the tablelands is experiencing its best season for a number of years with a full soil moisture pro!le. The ground is becoming wet, allowing for run o" into catchment dams.

February is a fun month for the Herron Todd White Rural team: breakfasts with like-minded industry members in Brisbane (24th), Sydney (25th) and our inaugural breakfast in Melbourne on the 26th. For those of you who could not attend this year we look forward to working together and keeping in touch ready for next year.

This month’s input from across the country provides a broad range of interesting reading. It certainly is good news to hear that areas of south-eastern New South Wales and north-eastern Victoria have received some rain and life is moving on again. David Shuter’s (Albury) input this month addresses the theme of the impact on climate change on property markets. David does mention the talk of southerners wondering if they should be moving north. From up here in North Queensland, David we thank you for your marketing!!

This month Peter Lee-Steere (Bunbury) seeks to provide an overview of the various agricultural land uses and markets of Western Australia. Peter mentions that on some agricultural land close to urban areas, orchards and vineyards are being removed as the purchasers view them as impediments! This certainly raises questions as to the availability of supply of fresh fruit to the state markets.

The Central Queensland input from Will McLay reports that store cattle markets have lifted on the back of the positive start to the season. Will also reports the sale of ‘Wilford’ to the west of Emerald.

In North Queensland the emergence of competition for cattle for the live export market against local processors is looking to set the scene for stronger cattle prices than experienced in the past 12 months. Ideally a strengthening in the cattle market may lead to an increase in property sale volumes and values.

Roger Hill Ph: (07) 4724 20001 March 2010

Rural – Market Directions

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Sales volumes remain low and demand is limited. Long-term positive seasonal conditions will need to be experienced before this translates in value increases.

GOONDIWINDI

Recent trips to the west have revealed a hidden oasis. Bu"el is nearly shoulder height, rivers #owing, crops busting out of the ground and bugs hitting the windscreen, which is hard to believe after such a dry spell. There are areas that still missed out, however, con!dence is up in the main.

There are a few transactions in the process of being exchanged and the market is starting to move. It is still only a fraction of what was occurring in the mid 2000s. Values have held reasonably well for good quality properties, however they have not gone unscathed, with some evidence of softening values.

...the structural force is primarily the need to feed people, livestock and provide energy....

Without doubt, one of the largest issues we will be facing over the next 10-15 years will be succession planning.

Corporate agriculture in the last few years has seen a surge of interest, and this is attributed to the belief that the fundamentals in agriculture are sound. Deutsche Bank recently released a report (December 2009) in which it discusses the belief that the structural forces that drove prices higher in 2007-2008 are still in place, though temporarily overwhelmed by the GFC and a world record harvest. The structural force is primarily the need to feed people, livestock and provide energy, for example biofeuls. We have also supported this view as while the traditional demand on agriculture has been food and !bre, energy has been added to the demand equation.

Deutsche Bank outline “Ten Reasons To Go Long Agriculture”, these are:

1. Population growth;

2. Income growth;

3. Land and water constraints;

4. Climate change;

5. Concentration of agricultural exports;

6. Biofuels;

7. Valuation (of agricultural commodities relative to hard commodities);

8. Inventories;

9. Diversi!cation;

10. Government action and stockpiling.

The agricultural industry has been meeting the challenge of feeding the world for decades, despite soothsayers predicting that it would be not able to for much longer because its ability to increase productivity must reach its limits and famines around the world occur as a result of food shortages. Going forward, the ability agriculture has shown to increase productivity is likely to be less favourable as a consequence of a combination of some of the above points. The main drivers to demand is not likely to be population growth, but the change on food

consumption habits as a result of income growth in the economic growth centres of countries such as China and India. As average household income increases, it has been shown that subsistence diets based on grains, substitutes this for higher protein such as various meat sources. This places more pressure on agriculture to meet demand, as the conversion ratio of grain to meat can vary from 2-7kg of grain for 1kg of meat.

There are a growing number of nations around the world that cannot meet the food requirements for their populations. Many of these sovereign entities are taking the opportunity to strategically invest in agricultural assets to help ensure that they have the ability to meet the demand for food in their own countries.

The constraints on land and water are physical resource based. There is less land and with climate change, many nations have placed restrictions on land use change - our own government included. In the past, as it became viable to develop land for agriculture this was one of the main options. Water shortages are being experienced all around the world and in our major irrigation and water use area, the Murray Darling Basin, we have seen the evidence of over allocation and the demand for water exceeding the sustainable level of resource extractions. Government reform has seen the volume of water available for consumptive use decline as the needs of the environment are allowed for. Water has been given a value and in this, is the tool for which water use e$ciency options can be priced against for assessing the feasibility of such work.

Global stocks to use ratios are still at relatively low levels and below historical averages. This is despite the world record harvest experienced in 2009. Many poorer nations are battling the food shortages and price spikes and the a"ordability of the food for their least well o". The GFC, the record harvest, and the improved a"ordability in food is likely to be highly volatile as normal seasons produce normal size crops and consumption exceeds production.

The outlook for farm commodity prices in the short term is generally soft, however price outlooks from late 2010 into 2011 should strengthen on the back of increased demand and lower stock levels. Despite the change in the structural price forces, there is likely to be high volatility in markets with more extreme highs and lows. Overall, the consensus is for higher average agricultural commodity prices going forward.

The market for irrigated farms has been supported mostly by new investment, predominantly from the institutional sector. There have been a few new private investors, however without these new investors the market may well have been very badly a"ected. There have been very few

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sales in the past 12 months, with the PrimeAg acquisition at Emerald being the only notable sale in 2009. This can be attributed to the poor water availability across most irrigation regions in eastern Australia and the subsequent lack of marketing as potential sellers await better selling conditions.

The very public sale process of the Cubbie Group, which has not yet resulted in a sale, has brought a lot of attention to this segment, however many of these potential buyers are only looking to pick up a bargain from the sale of a distressed asset. There are some who are looking to genuinely buy good quality assets, who have a good track history and potential to perform. These are also likely to be around for the longer term. They do, however, also have a lot of options to consider as there are a lot of irrigation properties presently on the market that were not available 3-5 years ago. This has resulted mainly from the decision of many operators to retire from the industry and succession planning issues make it easier to sell, than to hold and distribute between interested family members.

2010 should turn out to be an interesting year, whatever happens.

Contact:Robin Gardiner Ph: (02) 6766 9898

SOUTHERN NSW

ALBURY

Most areas of southern NSW and north-eastern Victoria have been experiencing typical summer weather patterns, with some areas experiencing summer storms which bring their own problems such as lightening strikes, and long periods of fairly hot weather. Some areas have received drenching rains of over 100mm, and other areas have experienced minimal rain. In this area there is typically an autumn break in mid to late March, and it is predominately an autumn/winter/spring rainfall area. Receiving the autumn break too early in the year can cause its own problems, such as weed infestations and stock health problems, and without the follow-up rain there can be pasture and crop striking then dying due to lack of moisture. That may then involve re-sowing crops or pasture a second time.

The areas a"ected by !res to the north and north-east of Albury have received good rainfalls, and are now on the road to recovery. Extensive fencing has been replaced, sheds and houses are being built/rebuilt, and it is starting to green up a bit. There has been enough rain to at least crust the soil to stop topsoil blowing away quite as easily.

Now to turn to the topic of climate change. In southern NSW and north-eastern Victoria perceptions and thoughts concerning climate change and its a"ects on the rural property sector are very mixed. No doubt this is the case in most areas; we have both extremes, where some are in total denial, to the other extreme where some feel residents are all doomed and should be moving to northern Australia to grow food and !bre. However, there is certainly growing acceptance that climate change is happening. People are starting to consider their futures in this area, and they are starting to think about some long-term alternatives. General feedback from real estate agents is that many potential buyers are thinking and talking about climate change, and trying to !nd out as much as they can so that they purchase in areas that are likely to be positively a"ected by climate change.

This is particularly so in irrigated areas where there have been zero or very low general security water allocations. Without irrigation water being available farmers are struggling to make ends meet and, in many cases, they have been saved from the clutches of their lenders by selling their water to the Government or non-rural water investment companies. Many irrigation farmers who have not received water for three or four years, or received very little water, are starting to accept that low water allocations may be the norm and not the exception, and that they may not have a future on a farm where the viability of that farm is reliant on reasonably high annual water allocations being available.

...non-land owning investment companies are now investing in water....

It is interesting to note, at this stage at least, that all these thoughts have not had any perceptible negative impact on rural property values. Property values have been #atlining in most non-irrigation areas, and there are still properties selling at prices that were being achieved in the heady days of 2006/2007. In irrigation areas, when water is sold separately from the land, the addition of the two components shows reasonably steady values. There are some exceptions of course, and there are very few irrigation properties selling due to very weak demand in some areas.

Water values have also been steady, and are underpinned by the Government buyback of water. Prior to the Government buyback commencing, annual water sales were around $100 million. If the Government is to adhere to its target, it needs to buy $300 million of water per annum - all without a"ecting prices. Is it possible to treble the demand for anything without seeing signi!cant price hikes? In addition, non-land owning water investment companies are now investing in water, with one investment company already holding well in excess of $100 million of mainly high security water assets in the Murray Darling basin.

These water assets are generally sold on an annual basis and the investments are showing good returns. It is likely that with the Government buyback and other non-land owning investment companies entering the market, that prices will increase for water - particularly high security water - in the short to medium term. Prices will also depend on the retention, or otherwise, of the water cap, which prevents large amounts of water being removed

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from irrigation areas.

General acceptance of climate change - even by many skeptics - has been gradual and painful. People are talking a lot about the extremes in southern NSW. January 2009 was on average the hottest on record and January 2010 was on average hotter than January 2009, so set a new record. Is this going to continue each year? There have been many localised violent wind storms that have caused a lot of damage, and it appears the areas is having more days and longer periods of temperatures above 40 degrees.Above all, there has been well below average rainfall in most areas of southern NSW and north-eastern Victoria for the past nine years. This factor above all else is adding weight to the climate change believers - or is it just another 50-year weather cycle?

Only time will tell!

WAGGA WAGGA

The area surrounding Wagga Wagga has received a good amount of rain over the past few weeks, which has lifted the spirits around the area. The amount of rain received has helped both grazing and cropping farmers. Some cropping farmers are getting ready to sow early crops on the back of the rain, while the rain has helped grazing farmers replenish some water levels and help to get some summer feed. The rural property market has remained quiet, with few transactions, though when transactions do occur the prices paid can still be surprisingly good, which shows that in some areas the market is holding !rm.

LEETON

There is very little happening in the rural property market throughout the region at present. Rainfall ranging from 20-200mm has fallen in parts during February, scattered across the area. This rain has done little to buoy the #agging rural market. Listings continue to increase with little buyer interest. Unfortunately this will continue to be the state of play in the short to medium term, with many producers currently in the process of re!nancing for the upcoming winter season.

Contact:David Shuter Ph: (02) 6041 1333

Regional Vic

MURRAY RIVERINA

The rising market through 2002 and 2009 has been very unusual given the poor seasonal conditions, especially over the past four years.

SEASON ALLOCATION

2002/2003 8%

2003/2004 45%

2004/2005 42%

2005/2006 56%

2006/2007 0%

2007/2008 0%

2008/2009 9%

2009/2010 23%

* Allocations for the Murray Irrigation Limited district in the southern Riverina district of south-west New South Wales.

The volume of sales has declined signi!cantly, but typically those sales that have occurred are at pre-drought levels of value. Strong grain prices over recent years have seen the demand for farmland remain reasonable. However, grain prices declined signi!cantly for 2009 and, combined with a fourth drought in a row, there could well be a downward correction in the near future.

...more and more properties are being sold this way....

To a large degree, the value of farms in the area has been propped up by the Federal/State Government water buybacks and the Federal Government interest rate subsidies.

A recent phenomenon in the market has been irrigation holdings sold “dry”. More and more properties are being sold this way, especially with the zero allocations, and purchasers with little chance of generating any income from the “water” component of the property. Thus, by splitting the water from the property, vendors can quite often achieve a superior sale price compared to selling as an irrigation holding.

Agents are reporting very little enquiry from buyers, but are !elding a large volume of calls from sellers.

Contact:John Henderson Ph: (03) 5881 4947

MILDURA/SUNRAYSIA

Table grape growers in the Mildura area were counting their blessings in recent weeks when heavy rainfall virtually by passed the area by and has left the fruit unscathed. Picking continues with the premium variety of Crimson Seedless now being harvested, with reasonable yields reported and good prices achieved.

Following the detection of a female fruit #y in early January

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in Mildura, a second male #y was recently discovered. This has led the Australian Quarantine Authority to extend the restrictions on the movement of fruit from within the exclusion zone for a further seven weeks, which, while not preventing sale of fruit, does require cold disinfestation treatment prior to export of table grapes to some countries and added paperwork.

There remains little joy in the wine grape industry. This year it is expected that production in the Sunraysia area will be well below 300,000 tonnes, which will be lowest harvest since 1999, and well down on the peak in 2005 of 442,000 tonnes. Chardonnay yields have been down by approximately 33%, and similar poor yields are expected from the harvest of other varieties. The poor yields are at least partly attributable to reduced inputs by most growers in response to the current depressed prices.

Following on from this is the report that in excess of 10,000 megalitres of irrigation water has been traded out of the district in the past 12 months, as growers seek to reduce debt levels. It is very evident when you #y into or drive around the Mildura area, that a large number of irrigation properties - mostly wine grape holdings - have been abandoned.

Another casualty of the wine industry slump is the recent advertising for sale of the historic Chateau Mildura Winery. The winery has undergone signi!cant restoration and upgrading in recent years, however the costs of this upgrade, coupled with the signi!cant downturn in the industry, forced the current owners to sell up. History records that William and Benjamin Cha"ey established the winery after an invitation to come to Australia by Alfred Deakin to set up the irrigation colonies of Mildura and Renmark. This 122-year-old Cha"ey winery is one of only !ve Victorian wineries that have more than 100 years of continuous production, and it is hopeful that it will remain in local ownership.

On a more positive note was the announcement in early February of Silex Systems Ltd purchasing Solar Systems, which went into receivership, with Silex indicating it will continue with construction of Australia’s largest solar power station just south of Mildura in a $429 million project. The project has State and Federal Government backing and, when completed, will produce enough power for 45,000 homes. Silex aim to launch a pilot plant in 2011 as a pre-curser to the full-scale operations a year or two later.

A review of the annual report of Select Harvests Limited reveals its intention to purchase a large almond orchard at Lake Powell, 15kms south east of Robinvale, for $25 million. The property is planted with 650ha of 4-6 year-old

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almonds and also includes a 6,622 megalitre water share (10.19Mgl/ha). This equates to an overall $38,460 per ha, including the bene!t of the balance land and structures. It appears a good deal to Select Harvests, as it has developed and subsequently managed the property on behalf of the vendor and will now purchase a productive property at a favourable price.

Harvesting of almonds in the area has commenced and is tipped to be a signi!cant improvement on last year. The Almond Board of Australia has forecast a 25% increase in production for 2010, with an expected 46,100 tonnes of almonds produced. It is also interesting to note that less than 20% of all Australian almond plantings have reached full maturity, with 70% of the trees planted since 2004. It is forecast that Australia will surpass Spain as the number two producing country by 2015.

The dryland/grazing sector has seen little activity, excepting the sale of the Western Division pastoral holding of the 18,265ha Warwick Station for $1.04 million. The station can be considered remote at 140 kms north west of Mildura, does not have rural power and has only modest improvements. The sale shows an improved sheep area value of approximately $200 per DSE.

The prime lamb market has started the year well, with record prices achieved at the past two recent Ouyen lamb markets. Values topped $166 per lamb at the latest sale. Also boosting this sector is the jump in cattle prices and the 10% spike in the wool market, with the AWEX Eastern Market Indicator is now well above 900c/kg clean.

Much of the Western Division of NSW has enjoyed well above average rainfall in the past two months and, combined with improving commodity prices, this should contribute to greater con!dence levels.

Contact:Shane Noonan Ph: (03) 5021 0455

FAR NORTH QLD

Banana prices continue to be volatile making specialist marketing and supply agreements, market timing and farm location increasingly important in securing pro!table market prices. Growers are increasingly trying to outdo each other and looking for that marketing edge which will attract premium prices for their fruit. Consumers continue to demand high quality blemish-free fruit and those growers who can provide that are reaping the rewards. Although average prices are reasonably low, market range is wide, re#ecting the premium for quality fruit.

...cyclical downturns in prices and returns from overproduction are frequent...

A recent !nancial analysis of a Cassowary Coast farm revealed a net income of over $15,000 per hectare for the six-month period from July to December 2009. This farm was situated near the coast in a reasonably elevated location and did not experience cold weather, allowing

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the bananas to maintain a deep yellow to golden skin colour which is in demand from banana agents and consumers alike, giving it the ability to attract a premium

price.

A recent purchase of a $2 million riverfront grazing farm near Innisfail for conversion for bananas is seen as a vote of con!dence in the industry, particularly as the buyer was a high-pro!le banana agent with many farms and packing facilities in the north. This purchase would tend to indicate that the threat of imports during 2009 seems to have subsided, with growers more con!dent in Biosecurity Australia enforcing strict quarantine measures.

The following is a summary of market trends and costs in recent years and again con!rms the need to be one of the producers that can attract a premium over the average

market.

The production costs for Cavendish bananas under normal conditions in north Queensland are typically estimated at about $17 per 13kg carton, consisting of about $11 per carton in on-farm costs and $6 per carton for transport, ripening and marketing. These amounts include all variable costs of production relating to growing and marketing costs and outside labour. The total cost of production inclusive of !xed costs such as equipment, interest and grower labour will be higher again.

Prices for Cavendish bananas vary widely in any one year, and from year to year because of variations in the supply volume. Cyclical downturns in prices and returns from overproduction are frequent. For this reason the year-to-year pro!tability of banana growing is extremely variable. In any one year, there can be extended periods when the returns do not cover the cost of production, and other times when the price may be returning high levels of pro!t.

...prices for Cavendish bananas vary widely in any one year....

The average weekly volume of north Queensland bananas consigned to southern markets per month from October 2005 through to the present. Consignments over the last two years have averaged just under 400,000 cartons per week, similar to the levels that existed immediately prior to the cyclone in 2006.

Wholesale market prices received for Cavendish bananas per 13kg carton are charted above in Figure 1. Price history over the period is exempli!ed by the Brisbane market averages which showed:

• Average prices mostly in the $12-16 range per carton from January 2004 through to July 2005.

• An upwards burst in prices from August to October 2005, during which average prices touched $25 a carton,

• A reversion of prices to the $10-14 range from November 2005 to March 2006,

• The start of a dramatic price increase following the cyclone, with the Brisbane market average price reaching almost $140 per carton in July 2006,

• A reversion of prices to around the $20 per carton mark

in early 2007 as post-cyclone banana plantings hit the market,

• A bounce-back of prices to over $50 per carton in July 2007 as production levels abated from their initial post-cyclone concentration, and

• Subsequent reversion to a typical average price of $15-20 per carton during the period from October 2007 to the present, though with higher than normal variability over the last 18 months.

Contact:Danny Glasson Ph: (07) 4057 0200

NORTHERN QLD

In January 2010 North Queensland started with a very patchy wet season. There have been some great rainfalls this January and February. You don’t want to stand still too long, the Bu"el will grow up the leg of your jeans!

On a more serious note, the North Queensland property market saw 169 sales since 2005. The market has grown exponentially over that time The blue line is an exponential overlay showing a factor of about 1.5 times including capex during that period. The purple line shows that with the absence of the more expensive Downs country type sales, the composition of the 2009 market saw lower land rates. This is purely compositional as there was an absence of more expensive land types transacting.

The sale volumes for 2009 saw the change in market sentiment arise from a series of factors. Particular sentiments were that stations were getting expensive for their earnings pro!le, lower con!dence existed in the capital markets and the weaker cattle market in general.

There are some positive in#uences arising that may fuel an increase in volumes - and maybe values - in the next 18 months to two years. The main one is an increased demand factor from the live export industry in north Queensland with record numbers of cattle being shipped out of Townsville in 2009. This looks set to continue. A major exporter has reportedly leased a site to erect a large live export yard facility in Townsville. This commitment is promising for creating competition through an increase in livestock marketing options.

In the balance, if there was a North Queensland grazing property clock, we consider the property cycle to be

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around the 6 o’clock mark - around the bottom. As the anxiety reduces from a couple of anxious balance sheet positions, we look forward to reporting the start of the recovery phase.

Contact:Roger Hill Ph: (07) 4724 2000

CENTRAL QLD

Good rains have been received across the area in the start to 2010, particularly in the Central Highlands with some areas recording falls of over 15 inches (375mm). Rainfall closer to the coast has been as much as 25 inches (500mm) around Yeppoon and northward. This recent rain event should inspire some con!dence back to the market, with further predictions of rain in the short term.

Sentiment remains stable, however future direction will be largely governed by the !nance sector which may look for opportunities to tidy up some aspects of its loan book. In any case, the key fundamentals of seasonal conditions and lending rates should provide the conditions for competition, particularly against better quality blocks.

...listings have generally been scarce, however this is likely to change...

Store cattle markets across the area have lifted, underpinned by restockers running on the con!dence of the current seasonal situation after the heavy falls in January and February.

Market activity starting the 2010 year has been sound after several big sales in the Clermont and Dysart districts at the conclusion of last year.

“Wilford”, located 90km west of Emerald, sold this month at auction for $2.5 million to a north-western grazier. The property comprises 2,587ha (6,392 acres) of mixed brigalow scrub with forest in#uences. The sale re#ects realistic value for a grower block at around $960 per hectare, or almost $400 per acre.

Listings have generally been scarce, however this is likely to change as vendors take the opportunity to o"er property in a better then average season.

Contact:Greg Williams Ph: (07) 4957 7348Will McLay Ph: (07) 4927 4655

NORTHERN TERRITORY

The long awaited !nal report of the Northern Australia Land and Water Taskforce has been released. It has been widely reported that it found, as expected, northern Australia will not become the world’s next great food bowl. There are limited areas with suitable soil types, and limited areas with adequate water resources; the areas of intersection of these features is even smaller.

But this does not mean that agriculture has no future in the north. The report identi!es that there are about 600 gigalitres of groundwater available across northern Australia, which could increase the irrigable land area by up to 40,000ha.

The report identi!es, correctly we believe, that a “mosaic” style of agriculture would represent the most appropriate use of these resources, that is small scale and widely distributed. Such opportunities exist across the region, however, the Wiso/Georgina resource, extending from Mataranka to Mt Isa, and the smaller Daly River area are particularly noted in the report.

In addition, there is the option of surface water storage, although this is constrained by the high seasonality of rainfall, high evaporation, the unsuitability of the terrain, costs of construction and current Government policy. Nevertheless, projects such as Stage 2 in the Ord will provide some scope for expansion of irrigated agriculture. An additional 800ha of agricultural lots will be released in 2011.

Much will need to change to facilitate the development of the mosaic-style agriculture envisaged by the report, especially in the provision of necessary infrastructure and

suitable land tenure.

Of course, the real estate property markets will have a big say in whether these projects will be feasible or whether the status quo will be maintained. Demand for irrigatable land is limited at present, however, on the positive side there does not appear to have been any noticeable fall in values. A good example is the Northern Territory cashew farm which has fairly signi!cant groundwater resources but which remains unsold.

Contact:Frank Peacocke Ph: (08) 8941 4833

South Western WA

Western Australia can be broadly divided into three main agricultural areas, being the south-west, wheatbelt and pastoral districts. With things being quiet on the agricultural front in WA at present, we have provided a very brief overview of the forces in the rural WA market from the south west and wheatbelt. Future discussion will follow on WA pastoral.

43

The month in review

South West

The south west of the state and along the coastal strip to the north of Perth includes the more intensive agriculture due to availability of water, higher annual rainfall and conducive soil types.

The area has the most diversity seeing dairying, viticulture, horticulture, plantation timber and forestry industries established. As this area moves further from the coast but still in relatively high rainfall districts, the well-established industries include sheep breeding for !ne wool, meat and cattle grazing and cereal cropping. The area also includes intensive piggeries and poultry farms as it is close to the markets and labor supply.

Prevalent throughout this area is the lifestyle market, with properties in some districts in excess of 300 hectares having no apparent commercial viability being sold at consistent prices and catering for this market. Reasons behind this include the proximity to the Perth metropolitan area, generally within three hours drive, and the amount of industry also within a one-hour drive, involving local shift or #y-in #y-out workers with rosters that give purchasers the ability to commute only occasionally and have a long period of time on their property between shifts.

The result has seen little to no #uctuation in prevailing values through the GFC. Although there has been a reduced turnover of properties and longer sale periods, values upon sale have been reasonably consistent for some time. The downside from an agricultural point of view is the prices paid for lifestyle exceed those a farmer could pay and hope to generate a reasonable return from working the land.

We have the situation where orchards and vineyards are being removed as they are considered an impediment to sale, so a vendor can attract a higher price or, alternatively, advertise that the vendor will remove any orchard etc if required. The longer-term impact on fruit and vegetable supplies in the state is yet to be measured, however the time cannot be far o" when there will be a noticeable reduction in supply with corresponding increased costs at a retail level. This could have a cyclical e"ect, making such land viable again or the state will have to rely more on imports from new areas such as the Ord River.

Wheatbelt

From Ajana, north of Geraldton and about 500km north of Perth, diagonally to Condingup, east of Esperance and about 850km south east of Perth, is the wheatbelt, comprising more traditional agriculture of mixed grazing and cereal cropping.

RURA

L

Compared to other parts of Australia, WA’s wheatbelt has a relatively uniform rainfall pattern and soil types, with rainfall decreasing as you head further away from the coast. Accordingly larger areas of land are needed to generate returns, with the result that lower prices per hectare are paid for larger tracts of inland properties than for smaller coastal properties that can generate similar returns. Due to the size of the overall land mass, a poor season in the northern wheatbelt can often be o"set by a bumper season near the south east with the central and western wheatbelt areas having greater consistency.

Property values are predominantly tied to the seasons and a combination of low turnover of properties and lower rates per hectare are noted in regions having longer-term below average seasons, compared to those having seasonal #uctuations but longer-term consistency with stable yields. A further factor in this market is economic viability with, it seems, ever increasing input costs not being met with better returns, resulting in market activity seeing a trend towards existing farmers purchasing neighbouring properties to obtain better economies of scale, or institutional investors purchasing properties to diversify a property portfolio.

Contact:

Peter Lee-SteertPh: (08) 9791 6204

44

The month in review

MAR

KET

IND

ICAT

ORS

Comparative Property Market Indicators - March 2010

Comparative Analysis of Capital City Property Markets

To discuss the applicability of the Capital City indicators to individual properties or situations, contact your local Herron Todd White o$ce:

Sydney (02) 9221 8911Melbourne (03) 9642 2000Brisbane Commercial (07) 3002 0900Brisbane Residential (07) 3353 7500Adelaide (08) 8231 6818Perth (08) 9388 9288Hobart (03) 6244 6795Darwin (08) 8941 4833Canberra (02) 6273 9888

Comparative Analysis of New South Wales/ACT Property Markets

To discuss the applicability of the NSW/ACT indicators to individual proper-ties or situations, contact your local Herron Todd White o$ce:

Albury (02) 6041 1333Bathurst (02) 6334 4650Canberra/Queanbeyan (02) 6273 9888Dubbo (02) 6884 2999Gosford 1300 489 825Gri$th (02) 6964 4222Leeton (02) 6953 8007Mudgee (02) 6372 7733Newcastle/Central Coast (02) 4929 3800Norwest (02) 8882 7100Sydney (02) 9221 8911Port Macquarie 1300 489 825Tamworth (02) 6766 9898Tweed Coast (02) 5523 2211Wagga Wagga (02) 6921 9303Wollongong (02) 4221 0205Young (02) 6382 5921

Comparative Analysis of Victorian/Tasmanian Markets

To discuss the applicability of the Victorian/Tasmanian indicators to individual properties or situations, contact your local Herron Todd White o$ce:

Gippsland (Sale/Traralgon/Bairnsdale) (03) 5143 1880/ 03 5176 4300/ (03) 5152 6909Horsham (03) 5382 6541Melbourne (03) 9642 2000Murray Mallee (Swan Hill) (03) 5032 1620Murray Outback (Mildura) (03) 5021 0455Murray Riverina (Echuca/Deniliquin) (03) 5480 2601/ (03) 5881 4947Wodonga (02) 6041 1333Hobart (03) 6244 6795Launceston (03) 6334 4997

The following pages present a generalised overview of the state of property markets in Capital City, New South Wales/ACT, Victoria/Tasmania, Queensland, South Australia/Northern Territory/Western Australia & MENA locations using !nancing risk-rating scales. They are not a guide to individual property assessments.

For further information contact Rick Carr, Research Director, Herron Todd White, on (07) 4057 0200, or by email on rick.carr@htw.com.au

45

The month in review

MAR

KET

IND

ICAT

ORS

Comparative Analysis of Queensland Property Markets

To discuss the applicability of the Queensland indicators to individual properties or situations, contact your local Herron Todd White o$ce:

Brisbane Commercial (07) 3002 0900Brisbane Residential (07) 3353 7500Bundaberg/Wide Bay (07) 4154 3355Cairns (07) 4057 0200Emerald (07) 4980 7738Gladstone (07) 4972 3833Gold Coast (07) 5584 1600Hervey Bay (07) 4124 0047Ipswich (07) 3282 9522Mackay (07) 4957 7348Rockhampton (07) 4927 4655Sunshine Coast (Mooloolaba) (07) 5444 7277Toowoomba (07) 4639 7600Townsville (07) 4724 2000Whitsunday (07) 4948 2157

Comparative Property Market Indicators - March 2010

Herron Todd White acknowledges the assistance of Countrywide Valuers (Bendigo), Roger Cussen Property Specialist (Warrnambool) in compiling these pages.

Comparative Analysis of South Australia/Northern Territory/Western Australian Property Markets

To discuss the applicability of the South Australian/Northern Territory and Western Australian indicators to individual properties or situations, contact your local Herron Todd White o$ce:

Adelaide (08) 8231 6818South West WA (Bunbury/Busselton) (08) 9791 6204/ (08) 9754 2982Perth (08) 9388 9288Darwin (08) 8941 4833

The following pages present a generalised overview of the state of property markets in Capital City, New South Wales/ACT, Victoria/Tasmania, Queensland, South Australia/Northern Territory/Western Australia & MENA locations using !nancing risk-rating scales. They are not a guide to individual property assessments.

For further information contact Rick Carr, Research Director, Herron Todd White, on (07) 4057 0200, or by email on rick.carr@htw.com.au

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

Capital City Property Market Indicators as at February 2010 – Houses

46

Capital City Property Market Indicators as at February 2010 – Houses Factor Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra

Rental Vacancy Situation Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market Shortage of available property relative to demand

Balanced market Shortage of available property relative to demand

Severe shortage of available property relative to demand

Balanced market

Rental Vacancy Trend Steady Tightening Steady Tightening Steady Steady Tightening Tightening

Demand for New Houses Fair Fair Fair Fair Fair Fair Very strong Fair

Trend in New House Construction Steady Steady Steady Steady Steady Declining Steady Increasing

Volume of House Sales Increasing Steady - Declining Increasing Steady Steady Declining Steady Steady

Stage of Property Cycle Rising market Rising market Start of recovery Peak of market Rising market Declining market Rising market Rising market

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Occasionally Occasionally Occasionally Occasionally Occasionally Almost never Occasionally Almost never

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Sydney

Melbourn

e

Brisban

e

AdelaidePert

hHob

art

Darwin

Canberr

a

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Sydney

Melbourne

Brisbane

Ade laidePerth

Hobart

Darwin

Canberra

Declining M arket

Peak o f M arket

Rising M arket

Bo ttom o f M arket

Start of Recovery

Demand for New Houses

0

1

2

3

4

5

6

Sydney

Melbourne

Brisbane

Ade laidePerth

Hobart

Darwin

Canberra

Very So ft

Soft

Fair

Strong

Very Strong

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

Capital City Property Market Indicators as at February 2010 – Units

47

Capital City Property Market Indicators as at February 2010 – Units Factor Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra

Rental Vacancy Situation Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market Shortage of available property relative to demand

Balanced market Shortage of available property relative to demand

Shortage of available property relative to demand

Shortage of available property relative to demand

Rental Vacancy Trend Steady Tightening Steady Tightening Steady Steady Tightening Tightening

Demand for New Units Fair Fair Fair Fair Fair Fair Strong Fair

Trend in New Unit Construction Steady Steady Steady Steady Declining Steady Steady Increasing

Volume of Unit Sales Increasing Steady - Declining Increasing Steady Steady Increasing Steady Steady

Stage of Property Cycle Rising market Rising market Start of recovery Peak of market Rising market Declining market Rising market Rising market

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Frequently Occasionally Occasionally Occasionally Occasionally Almost never Occasionally Almost never

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Sydne

y

Melbou

rne

Brisba

ne

Adelaid

ePert

hHob

art

Darwin

Canbe

rra

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Sydney

Melbourn

e

Brisban

e

Adelaide Perth

Hobart

Darwin

Canbe

rra

Declining M arket

Peak of M arket

Rising M arket

Bottom of M arket

Start o f Recovery

Demand for New Units

0

1

2

3

4

5

6

Sydney

Melbourne

Brisbane

Ade laidePerth

Hobart

Darwin

Canberra

Very Soft

Soft

Fair

Strong

Very Strong

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

1

Capital City Property Market Indicators as at February 2010 – Retail

48

Capital City Property Market Indicators as at February 2010 – Retail Factor Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra

Rental Vacancy Situation Over-supply of available property relative to demand

Balanced market Balanced market Balanced market Balanced market Balanced market Shortage of available property relative to demand

Balanced market - Over-supply of available property relative to demand

Rental Vacancy Trend Steady Steady Steady Steady Steady Steady Steady Steady - Increasing

Rental Rate Trend Stable Stable Stable Stable Stable Stable Increasing Stable

Volume of Property Sales Steady Steady - Declining Increasing Steady Increasing Steady Steady Steady

Stage of Property Cycle Bottom of market Rising market - Peak of market

Start of recovery Peak of market Bottom of market Peak of market Rising market Peak of market

Local Economic Situation Flat Flat Flat Flat Steady growth Flat Steady growth Flat

Value Difference between Quality Properties with National Tenants, and Comparable Properties with Local Tenants

Significant - Large Nil - Small Significant Small Significant Small Significant Large

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Sydney

Melbourne

Brisba

ne

Adelaide

Perth

Hobart

Darwin

Canberr

a

Increasing Sharply

IncreasingSteady

TighteningTightening

Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Sydney

Melbourne

Brisbane

AdelaidePerth

Hobart

Darwin

Canberra

Declining M arket

Peak o f M arket

Rising M arket

Bottom of

M arket

Start of Recovery

Local Economic Situation

0

1

2

3

4

5

6

Sydney

Melbourne

Brisbane

AdelaidePerth

Hobart

Darwin

Canberra

Severe Contraction

Contraction

Flat

Steady Growth

High Growth

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

New South Wales Property Market Indicators as at February 2010 – Houses

49

New South Wales Property Market Indicators as at February 2010 – Houses

Factor Albury BathurstCan-berra/ Q’beyan

Central Coast Dubbo Griffith Mudge

e New-castle Orange Sydney Tam-

worth Tweed Coast

Wagga Wagga

Wollon-gong

Rental Vacancy Situation Balanced market

Severe shortage of available property relative to demand

Balanced market

Balanced market

Shortage of available property relative to demand

Balanced market

Severe shortage of available property relative to demand

Shortage of available property relative to demand

Shortage of available property relative to demand

Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market

Shortage of available property relative to demand

Shortage of available property relative to demand

Rental Vacancy Trend Steady Tightening sharply

Tightening Steady Tightening Tightening Tightening sharply

Tightening Tightening Steady Tightening Steady Tightening Tightening

Demand for New Houses Fair - Strong

Fair Fair Fair Fair Fair Strong Soft Fair Fair Fair Fair Fair - Strong

Fair

Trend in New House Construction Steady - Increasing

Increasing Increasing Steady Declining Steady Steady Declining - Steady

Increasing Steady Steady Increasing Steady Steady

Volume of House Sales Steady Increasing Steady Steady Steady Increasing Steady Steady Steady Increasing Steady - Declining

Steady Steady Increasing

Stage of Property Cycle Rising market

Start of recovery

Rising market

Bottom of market - Rising market

Rising market

Bottom of market

Rising market

Start of recovery

Bottom of market

Rising market

Peak of market

Bottom of market

Peak of market

Start of recovery

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Almost never

Almost never

Almost never

Occasion-ally

Occasion-ally

Occasionally Almost never

Almost never

Occasion-ally

Occasion-ally

Occasion-ally

Occasion-ally

Occasion-ally

Occasion-ally

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Albury

Bathurst

C'berra/ Q

'beyan

Centra

l Coast

DubboGriff

ith

Mudgee

Newca

stleOran

ge

Sydney

Tamworth

Tweed Coast

WaggaWagga

Illawarra

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Albury

Bathurst

C'berra/ Q'beya

n

Central C

oastDubbo

Griffith

Mudgee

NewcastleOrange

Sydney

Tamworth

Tweed Coast

Wagga Wagga

Illawarra

Declining M arket

Peak of M arket

Rising M arket

Bottom of M arket

Start o f Recovery

Demand for New Houses

0

1

2

3

4

5

6

Albury

Bathurst

C'berra/ Q

'beyan

Central C

oastDubbo

Griffith

Mudgee

NewcastleOrange

Sydney

Tamworth

Tweed Coast

Wagga Wagga

Illawarra

Very Soft

Soft

Fair

Strong

Very Strong

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

New South Wales Property Market Indicators as at February 2010 – Units

50

New South Wales Property Market Indicators as at February 2010 – Units

Factor Albury BathurstCan-berra/ Q’beyan

Central Coast Dubbo Griffith Mudgee New-

castle Orange Sydney Tam-worth

Tweed Coast

Wagga Wagga

Wollon-gong

Rental Vacancy Situation Balanced market

Severe shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market

Shortage of available property relative to demand

Balanced market

Severe shortage of available property relative to demand

Balanced market

Severe shortage of available property relative to demand

Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market

Shortage of available property relative to demand

Shortage of available property relative to demand

Rental Vacancy Trend Steady Tightening sharply

Tightening Steady Tightening Steady Tightening sharply

Tightening - Steady

Tightening sharply

Steady Tightening Steady Tightening

Tightening

Demand for New Units Fair - Strong

Fair Fair Fair Fair Fair Strong Very soft Fair Fair Fair Fair Fair Fair

Trend in New Unit Construction Steady - Increasing

Steady Increasing Declining Declining Declining Steady Steady Steady Steady Steady Increasing Steady Declining - Steady

Volume of Unit Sales Steady Increasing Steady Steady Steady Steady Steady Declining Increasing Increasing Steady - Declining

Steady Declining Increasing

Stage of Property Cycle Rising market

Start of recovery

Rising market

Bottom of market

Rising market

Bottom of market

Rising market

Bottom of market

Start of recovery

Rising market

Peak of market

Bottom of market

Declining market

Start of recovery

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Almost never

Almost never

Almost never

Occasion-ally

Occasion-ally

Occasion-ally

Almost never

Almost never

Almost never

Frequently Occasion-ally

Occasion-ally

Occasionally

Occasion-ally

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Albury

Bathurs

t

C'berra

/ Q'be

yan

Centra

l Coa

st

Dubbo

Griffith

Mudgee

Newca

stle

Orange

Sydne

y

Tamwort

h

Tweed C

oast

Wagga W

agga

Illawarr

a

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Albury

Bathurst

C'berra/ Q

'beyan

Central C

oast

DubboGriff

ith

Mudgee

Newcastle

Orange

Sydney

Tamworth

Tweed Coast

Wagga Wagga

Illawarra

Declining M arket

Peak of M arket

Rising M arket

Bottom of M arket

Start o f Recovery

Demand for New Units

0

1

2

3

4

5

6

Albury

Bathurst

C'berra/ Q

'beyan

Central C

oast

DubboGriff

ith

Mudgee

Newcastle

Orange

Sydney

Tamworth

Tweed Coast

Wagga Wagga

Illawarra

Very Soft

Soft

Fair

Strong

Very Strong

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

New South Wales Property Market Indicators as at February 2010 – Retail

51

New South Wales Property Market Indicators as at February 2010 – Office

Factor Albury BathurstCan-berra/ Q’beyan

Central Coast Dubbo Griffith Mudgee New-

castle Orange Sydney Tam-worth

Tweed Coast

Wagga Wagga

Wollon-gong

Rental Vacancy Situation Balanced market

Over-supply of available property relative to demand

Balanced market - Over-supply of available property relative to demand

Over-supply of available property relative to demand

Balanced market

Over-supply of available property relative to demand

Balanced market

Over-supply of available property relative to demand

Balanced market

Over-supply of available property relative to demand

Balanced market

Balanced market - Over-supply of available property relative to demand

Balanced market -

Over-supply of available

property relative to

demand

Over-supply of available property relative to demand

Rental Vacancy Trend Steady Increasing Steady - Increasing

Steady Steady Increasing Steady Steady Steady Steady Steady Increasing Steady - Increasing

Steady

Rental Rate Trend Stable Declining Stable Stable Declining Declining Stable Stable Declining Stable Declining Declining - Stable

Stable Stable

Volume of Property Sales Declining Declining Steady Steady Steady Steady Steady Steady Steady Steady Steady Declining Steady - Declining

Steady

Stage of Property Cycle Bottom of market

Declining market

Peak of market

Declining market

Declining market

Declining market

Start of recovery

Declining market

Declining market

Bottom of market

Declining market

Bottom of market

Declining market

Bottom of market

Local Economic Situation Contraction Flat Flat Flat Flat Flat Flat Flat Flat Flat Flat Flat Flat Flat

Value Difference between Quality Properties with National Tenants, and Comparable Properties with Local Tenants

Significant Significant Large Small Significant Large Significant

Small Significant Significant - Large

Significant Small - Significant

Significant Significant - Large

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Stage of Property Cycle

0

1

2

3

4

5

6

Albury

Bathurst

C'berra/Q'beyan

Central C

oastDubbo

Griffith

Mudgee

NewcastleOrange

Sydney

Tamworth

Tweed Coast

Wagga Wagga

Illawarra

Declining M arket

Peak o f M arket

Rising M arket

Bottom o f M arket

Start o f Recovery

Local Economic Situation

0

1

2

3

4

5

6

Albury

Bathurst

C'berra/Q'beyan

Central C

oastDubbo

Griffith

Mudgee

NewcastleOrange

Sydney

Tamworth

Tweed Coast

Wagga Wagga

Illawarra

Severe Contractiont

Contraction

Flat

Steady Growth

High Growth

Rental Vacancy Trend

0

1

2

3

4

5

6

Albury

Bathurst

C'berra/Q'beyan

Central C

oast

DubboGriff

ith

Mudgee

Newcastle

Orange

Sydney

Tamworth

Tweed Coast

Wagga Wagga

Illawarra

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

The month in review

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

Victoria/Tasmania Property Market Indicators as at February 2010 – Houses

52

Victorian and Tasmanian Property Market Indicators as at February 2010 – Houses

Factor Bendigo Echuca Gippsland Melbourne Mildura Wangaratta Warrnam-bool

Wodonga Burnie -Devonport Hobart Launceston

Rental Vacancy Situation Balanced market

Balanced market

Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market

Balanced market

Shortage of available property relative to demand - Balanced market

Balanced market

Shortage of available property relative to demand

Shortage of available property relative to demand

Shortage of available property relative to demand

Rental Vacancy Trend Steady Tightening Tightening Tightening Tightening Steady Tightening Steady Steady Steady Steady

Demand for New Houses Fair Fair Strong Fair Fair Fair - Strong Fair - Strong Fair - Strong Fair Fair Fair

Trend in New House Construction Steady Steady Increasing Steady Steady Steady - Increasing

Steady Steady - Increasing

Declining Declining Declining

Volume of House Sales Steady Steady Increasing Steady - Declining

Steady Steady Steady Steady Declining Declining Declining

Stage of Property Cycle Start of recovery

Peak of market Bottom of market

Rising market Start of recovery

Rising market Rising market Rising market Declining market

Declining market

Declining market

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Almost never Occasionally Occasionally Occasionally Occasionally Almost never Almost never Almost never Almost never Almost never Almost never

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-ratin g

Rental Vacancy Trend

0

1

2

3

4

5

6

Bendig

o

Echuc

a

Gippsla

nd

Melbou

rne

Mildura

Wangara

tta

Warrnam

bool

Wodong

a

Burnie-

Devonpo

rt

Hobart

Laun

cesto

n

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Bendig

o

Echuc

a

Gippsla

nd

Melbou

rne

Mildura

Wangara

tta

Warrnam

bool

Wodong

a

Burnie-

Devonp

ort

Hobart

Laun

cesto

n

Declining M arket

Peak o f M arket

Rising M arket

Bottom o f M arket

Start of Recovery

Demand for New Houses

0

1

2

3

4

5

6

Bendig

o

Echuc

a

Gippsla

nd

Melbou

rne

Mildura

Wangara

tta

Warrnam

bool

Wodong

a

Burnie-

Devonp

ort

Hobart

Laun

cesto

n

Very Soft

Soft

Fair

Strong

Very Strong

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

Victoria/Tasmania Property Market Indicators as at February 2010 – Units

53

Victorian and Tasmanian Property Market Indicators as at February 2010 – Units

Factor Bendigo Echuca Gippsland Melbourne Mildura Wangaratta Warrnam-bool

Wodonga Burnie -Devon-port Hobart Laun-

ceston Rental Vacancy Situation Balanced

market Balanced market

Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market

Balanced market

Shortage of available property relative to demand - Balanced market

Balanced market

Shortage of available property relative to demand

Shortage of available property relative to demand

Shortage of available property relative to demand

Rental Vacancy Trend Steady Steady Tightening Tightening Tightening Steady Tightening Steady Steady Steady Steady

Demand for New Units Strong Fair Strong Fair Fair Fair - Strong Fair - Strong Fair - Strong Fair Fair Fair

Trend in New Unit Construction Increasing Steady Increasing Steady Steady Steady - Increasing

Steady Steady - Increasing

Steady Steady Steady

Volume of Unit Sales Steady Steady Increasing Steady - Declining

Steady Steady Steady Steady Increasing Increasing Increasing

Stage of Property Cycle Start of recovery

Peak of market

Rising market Rising market Start of recovery

Rising market Rising market Rising market Declining market

Declining market

Declining market

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Almost never Occasionally Occasionally Occasionally Occasionally Almost never Almost never Almost never Almost never Almost never Almost never

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Bendig

o

Echuc

a

Gippsla

nd

Melbou

rne

Mildura

Wangara

tta

Warrnam

bool

Wodong

a

Burnie-

Devonp

ort

Hobart

Laun

cesto

n

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Bendig

o

Echuc

a

Gippsla

nd

Melbou

rne

Mildura

Wangara

tta

Warrnam

bool

Wodong

a

Burnie-

Devonpo

rt

Hobart

Laun

cesto

n

Declining M arket

Peak of M arket

Rising M arket

Bottom of M arket

Start of Recovery

Demand for New Units

0

1

2

3

4

5

6

Bendig

o

Echuc

a

Gippsla

nd

Melbou

rne

Mildura

Wangara

tta

Warrnam

bool

Wodong

a

Burnie-Devon

port

Hobart

Laun

ceston

Very Soft

Soft

Fair

Strong

Very Strong

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

Victoria/Tasmania Property Market Indicators as at February 2010 – Retail

54

Victorian and Tasmanian Property Market Indicators as at February 2010 – Retail

Factor Bendigo Echuca Gippsland Melbourne Mildura Wangaratta Warrnam-bool

Wodonga Burnie -Devon-port Hobart Laun-

ceston Rental Vacancy Situation Balanced

market Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market

Over-supply of available property relative to demand

Balanced market

Balanced market

Balanced market

Balanced market

Balanced market

Balanced market

Rental Vacancy Trend Steady Tightening Tightening - Steady

Steady Steady Steady Steady Steady Steady Steady Steady

Rental Rate Trend Stable Increasing Stable Stable Stable Stable Stable Stable Stable Stable Stable

Volume of Property Sales Declining Increasing Declining Steady - Declining

Steady Declining Steady - Declining

Declining Steady Steady Steady

Stage of Property Cycle Bottom of market

Rising market Start of recovery

Rising market - Peak of market

Bottom of market

Bottom of market

Bottom of market

Bottom of market

Peak of market

Peak of market

Peak of market

Local Economic Situation Flat Steady growth Flat Flat Flat Contraction Steady growth Contraction Flat Flat Flat

Value Difference between Quality Properties with National Tenants, and Comparable Properties with Local Tenants

Significant Significant Small Nil - Small Small Significant Small Significant Small Small Small

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Bendigo

Echuca

Gippsland

Melbourne

Mildura

Wangaratta

Warrnambool

Wodonga

Burnie-Devonport

Hobart

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Bendigo

Echuca

Gippsland

Melbourne

Mildura

Wangaratta

Warrnambo

ol

Wodonga

Burnie-Devonport

Hobart

Declining M arket

Peak o f M arket

Rising M arket

Bottom of M arket

Start o f Recovery

Local Economic Situation

0

1

2

3

4

5

6

Bendigo

Echuca

Gippsland

Melbourne

Mildura

Wangaratta

Warrnambool

Wodonga

Burnie-DevonportHobart

Severe Contraction

Contraction

Flat

Steady Growth

High Growth

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

Queensland Property Market Indicators as at February 2010 – Houses

55

Queensland Property Market Indicators as at February 2010 – Houses

Factor Cairns Towns-ville

Whit-sunday Mackay Rock-

hampton Emerald Glad–stone

Bunda-berg

Hervey Bay

Sun-shine Coast

Brisbane Gold Coast Ipswich Too-

woombaRental Vacancy Situation Balanced

market Balanced market

Balanced market

Balanced market - Over-supply of available property relative to demand

Balanced market

Balanced market

Balanced market

Balanced market

Balanced market - Over-supply of available property relative to demand

Balanced market

Balanced market

Balanced market

Balanced market

Shortage of available property relative to demand

Rental Vacancy Trend Tightening Steady Steady Steady - Increasing

Steady Tightening Steady Steady Steady Steady Steady Steady Tightening Tightening sharply

Demand for New Houses Fair Fair Fair Fair Fair Strong Soft Soft - Fair Fair Soft Fair Fair Soft Fair

Trend in New House Construction

Declining Steady Steady Declining Steady Increasing Declining Declining - Steady

Declining - Steady

Declining Steady Increasing Declining Steady

Volume of House Sales Steady Steady Steady Declining Declining Steady Steady Steady Increasing - Steady

Declining Increasing Declining Declining Increasing

Stage of Property Cycle Bottom of market

Start of recovery

Start of recovery

Peak of market

Bottom of market

Rising market

Bottom of market

Bottom of market

Start of recovery

Bottom of market

Start of recovery

Start of recovery

Bottom of market

Rising market

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Occasion-ally

Occasion-ally

Almost never

Almost never

Occasion-ally

Occasion-ally

Almost never

Occasion-ally

Occasion-ally

Occasion-ally

Occasion-ally

Frequently Frequently Occasion-ally

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Cairns

Townsville

Whitsund

ay

Mackay

Rockham

pton

Emerald

Gladstone

Bunda

berg

Hervey Bay

Sunshine Coast

Brisban

e

Gold Coast

Ipswich

Toowoo

mba

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Cairns

Townsv il le

Wh itsundayMackay

Rockham ptonEmerald

Gladstone

Bundaberg

Hervey Bay

Sun shine Coast

Brisbane

Gold Coast

Ipswich

Toowoomba

Declining M arket

Peak of M arket

Rising M arket

Bottom of M arket

Start o f Recovery

Demand for New Houses

0

1

2

3

4

5

6

Cairns

Townsv ille

Wh itsundayMackay

Rockham ptonEm erald

G ladstone

Bundaberg

Hervey Bay

Sunshine CoastBrisbane

Gold CoastIpswich

Toowoomba

Very SoftSoft

Fair

Strong

Very Strong

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

Queensland Property Market Indicators as at February 2010 – Units

56

Queensland Property Market Indicators as at February 2010 – Units

Factor Cairns Towns-ville

Whit-sunday Mackay Rock-

hampton Emerald Glad-stone

Bunda-berg

Hervey Bay

Sun-shine Coast

Brisbane Gold Coast Ipswich Too-

woombaRental Vacancy Situation Balanced

market - Over-supply of available property relative to demand

Over-supply of available property relative to demand

Balanced market

Balanced market

Shortage of available property relative to demand

Balanced market

Balanced market

Balanced market

Balanced market - Over-supply of available property relative to demand

Balanced market

Balanced market

Over-supply of available property relative to demand

Balanced market

Shortage of available property relative to demand

Rental Vacancy Trend Tightening Steady Steady Steady Steady Tightening Steady Steady Steady Steady Steady Steady Steady Tightening sharply

Demand for New Units Soft Soft Fair Fair Fair Strong Soft Soft - Fair Very soft Soft Fair Soft Soft Strong

Trend in New Unit Construction

Declining Declining Steady Steady Steady Increasing Declining Declining - Steady

Declining significantly

Declining Steady Declining Declining Steady

Volume of Unit Sales Steady Steady Steady Declining Steady Steady Steady Steady Declining - Declining significantly

Declining Increasing Declining Declining Increasing

Stage of Property Cycle Bottom of market

Start of recovery

Start of recovery

Peak of market

Bottom of market

Rising market

Bottom of market

Bottom of market

Declining market

Bottom of market

Start of recovery

Rising market

Bottom of market

Rising market

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Occasion-ally

Occasion-ally

Almost never

Almost never

Almost never

Occasion-ally

Almost never

Occasion-ally

Occasion-ally

Occasion-ally

Occasion-ally

Very frequently

Frequently Occasion-ally

Red entries indicate change from previous month to a higher risk-rating Blue entries indicate change from previous month to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Cairns

Towns

ville

Whitsund

ay

Macka

y

Rockh

ampto

n

Emerald

Gladsto

ne

Bunda

berg

Hervey

Bay

Sunsh

ine C

oast

Brisba

ne

Gold C

oast

Ipswich

Toowoo

mba

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Cairns

Townsvil le

Wh itsunday

Mackay

Rockhampton

Emerald

Gladstone

Bundaberg

Hervey Bay

Sunshine Coast

Brisbane

Gold Coast

Ipswich

Toowoomba

Declining M arket

Peak o f M arket

Rising M arket

Bottom o f M arket

Start of Recovery

Demand for New Units

0

1

2

3

4

5

6

Cairns

Townsville

Wh itsunday

Mackay

Rockhampton

Emerald

Gladstone

Bundaberg

Hervey Bay

Sunshine Coast

Brisbane

Gold Coast

Ipswich

Toowoomba

Very Soft

Soft

Fair

Strong

Very Strong

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

Queensland Property Market Indicators as at February 2010 – Retail

57

Queensland Property Market Indicators as at February 2010 – Retail Factor Cairns Townsville Mackay Rock-

hampton Gladstone Bundaberg Hervey Bay

Sunshine Coast Brisbane Gold Coast Too-

woomba Rental Vacancy Situation Balanced

market - Over-supply of available property relative to demand

Balanced market

Balanced market

Balanced market

Balanced market

Over-supply of available property relative to demand

Balanced market - Over-supply of available property relative to demand

Balanced market - Over-supply of available property relative to demand

Balanced market

Over-supply of available property relative to demand

Balanced market - Over-supply of available property relative to demand

Rental Vacancy Trend Steady Steady Steady Steady Steady Steady Steady - Increasing

Increasing Steady Increasing Steady - Increasing

Rental Rate Trend Stable Stable Stable Increasing Stable Declining - Stable

Declining - Stable

Declining - Stable

Stable Declining - Stable

Stable

Volume of Property Sales Declining significantly

Steady Steady Steady Steady Increasing - Steady

Declining Increasing - Steady

Increasing Declining - Declining significantly

Steady

Stage of Property Cycle Bottom of market

Bottom of market

Stable Start of recovery

Bottom of market

Declining market

Declining market

Declining market

Start of recovery

Bottom of market

Peak of market - Declining market

Local Economic Situation Flat Flat Steady growth Flat Flat Steady growth - Flat

Flat Contraction Flat Contraction Flat

Value Difference between Quality Properties with National Tenants, and Comparable Properties with Local Tenants

Small Significant Small Significant Significant Small - Significant

Significant Significant Significant Significant - Large

Significant

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Cairns

Townsville

Mackay

Rockhampton

Gladstone

Bundaberg

Hervey Bay

Sunshine Coast

Brisbane

Gold Coast

Toowoomba

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Cairns

Townsvil le

Mackay

Rockhampton

Gladstone

Bundaberg

Hervey B

ay

Sunshine Coast

Brisbane

Gold Coast

Toowoomba

Declining M arket

Peak of M arket

Rising M arket

Bottom of M arket

Start of Recoveryv

Local Economic Situation

0

1

2

3

4

5

6

Cairns

Townsville

Mackay

Rockhampton

Gladstone

Bundaberg

Hervey Bay

Sunshine Coas

t

Brisbane

Gold Coast

Toowoomba

Severe Contraction

Contraction

Flat

Steady Growth

High Growth

The month in review

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

Northern Territory, South Australia & Western Australia Property Market Indicators as at February 2010 – Houses

58

SA, NT and WA Property Market Indicators as at February 2010 – Houses Factor Adelaide Adelaide

Hills Barossa Valley

Iron Triangle

Alice Springs Darwin Bunbury Busselton Duns-

borough Geraldton Perth

Rental Vacancy Situation Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market

Balanced market

Shortage of available property relative to demand

Severe shortage of available property relative to demand

Balanced market

Balanced market

Balanced market

Shortage of available property relative to demand

Shortage of available property relative to demand

Rental Vacancy Trend Tightening Steady Steady Steady Tightening Tightening Steady Tightening Steady Tightening Steady

Demand for New Houses Fair Fair Fair Fair Strong Very strong Strong Fair Fair Fair Fair

Trend in New House Construction Steady Steady Declining Declining Steady Steady Steady Steady Steady Steady Steady

Volume of House Sales Steady Steady Steady Steady Steady Steady Steady Increasing Steady Steady Steady

Stage of Property Cycle Peak of market

Peak of market

Peak of market

Peak of market

Rising market Rising market Rising market Rising market Rising market Peak of market

Peak of market

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Occasionally Occasionally Occasionally Almost never Occasionally Occasionally Almost never Occasionally Occasionally Occasionally Occasionally

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Adelaide

Adelaide Hills

Barossa Valley

Iron Triangle

Alice Springs

Darwin

South West W

A

GeraldtonPerth

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Ade laide

Ade laide Hills

BarossaValley

Iron Tria

ngle

Alice Springs

Darwin

SouthWest W

A

Gera ldtonPerth

Declining M arket

Peak of M arket

Rising M arket

Bottom of M arket

Start o f Recovery

Demand for New Houses

0

1

2

3

4

5

6

Ade laide

Ade laide Hills

Barossa Valley

Iron Triangle

Alice Springs

Darwin

South West W

A

Gera ldtonPerth

Very Soft

Soft

Fair

Strong

Very Strong

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

Northern Territory, South Australia & Western Australia Property Market Indicators as at February 2010 – Units

59

SA, NT and WA Property Market Indicators as at February 2010 – Units Factor Adelaide Adelaide

Hills Barossa Valley

Iron Triangle

Alice Springs Darwin Bunbury Busselton Duns-

borough Geraldton Perth

Rental Vacancy Situation Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market

Balanced market

Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market

Balanced market

Balanced market

Shortage of available property relative to demand

Shortage of available property relative to demand

Rental Vacancy Trend Tightening Steady Steady Steady Tightening Tightening Steady Tightening Steady Tightening Steady

Demand for New Units Fair Fair Fair Fair Strong Strong Strong Fair Fair Fair Fair

Trend in New Unit Construction Steady Steady Declining Declining Steady Steady Steady Steady Declining Steady Steady

Volume of Unit Sales Steady Steady Steady Steady Steady Steady Steady Increasing Steady Steady Steady

Stage of Property Cycle Peak of market

Peak of market

Peak of market

Peak of market

Rising market Rising market Rising market Rising market Rising market Peak of market

Peak of market

Are New Properties Sold at Prices Exceeding Their Potential Resale Value

Occasionally Occasionally Occasionally Almost never Occasionally Occasionally Almost never Occasionally Occasionally Occasionally Occasionally

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Adelaid

e

Adelaide

Hills

Barossa

Valley

Iron Tria

ngle

AliceSpri

ngs

Darwin

SouthWes

t WA

Geraldto

nPerth

Increasing SharplyIncreasing

SteadyTightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Ade laide

Ade laide Hills

Barossa Valley

Iron Triangle

Alice Springs

Darwin

Sou th West W

A

Gera ldtonPerth

Declining M arket

Peak o f M arket

Rising M arket

Bottom of M arket

Start o f Recovery

Demand for New Units

0

1

2

3

4

5

6

Ade laide

Ade laide Hil ls

Barossa Valley

Iron Triangle

Alice Springs

Darwin

Sou th West W

A

Gera ldtonPerth

Very SoftSoftFair

Strong

Very Strong

© Herron Todd White Copyright 2009No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication.

MARKET INDICATORS

The month in review

Northern Territory, South Australia & Western Australia Property Market Indicators as at February 2010 – Retail

60

SA, NT and WA Property Market Indicators as at February 2010 – Retail Factor Adelaide Adelaide Hills Barossa

Valley Iron Triangle Alice Springs Darwin South West WA Geraldton Perth

Rental Vacancy Situation Balanced market Balanced market Balanced market Balanced market Shortage of available property relative to demand

Shortage of available property relative to demand

Balanced market Balanced market Balanced market

Rental Vacancy Trend Steady Steady Steady Steady Steady Steady Steady Tightening Steady

Rental Rate Trend Stable Stable Stable Stable Increasing Increasing Stable Increasing Stable

Volume of Property Sales Steady Steady Steady Steady Steady Steady Steady Steady Increasing

Stage of Property Cycle Peak of market Peak of market Peak of market Peak of market Rising market Rising market Start of recovery Declining market Bottom of market

Local Economic Situation Flat Flat Flat Flat Steady growth Steady growth Flat Steady growth Steady growth

Value Difference between Quality Properties with National Tenants, and Comparable Properties with Local Tenants

Small Small Small Small Significant Significant Small Nil Significant

Red entries indicate change from 3 months ago to a higher risk-rating Blue entries indicate change from 3 months ago to a lower risk-rating

Rental Vacancy Trend

0

1

2

3

4

5

6

Ade laide

Adelaide Hills

Barossa Valley

Iron Tria

ngle

Alice Springs

Darwin

SouthWest W

A

Gera ldtonPerth

Increasing Sharply

Increasing

Steady

Tightening

Tightening Sharply

Stage of Property Cycle

0

1

2

3

4

5

6

Ade laide

Adelaid

e Hills

Barossa Valley

Iron Tria

ngle

Alice Springs

Darwin

SouthWest W

A

GeraldtonPerth

Declining M arket

Peak o f M arket

Rising M arket

Bottom o f M arket

Start of Recovery

Local Economic Situation

0

1

2

3

4

5

6

Adelaide

Adelaide Hills

Barossa Valley

Iron Tria

ngle

Alice Springs

Darwin

South West W

A

Gera ldtonPerth

Severe Contraction

Contraction

Flat

Steady Growth

High Growth