Urbis report 2016.

Urbis report 2016.

OUTLOOKNORTHCOTE

A CONTEXT ON BUSINESS, CULTURE, LIFESTYLE AND RESIDENTIAL

APRIL 2016

Northcote provides an affordable apartment market that is located five kilometres from the CBD, making it suitable for young professionals, first home buyers and investors alike.

THE HIGH STREET RETAIL STRIP CONSISTS OF A MIX OF CONVENIENCE, FOOD AND BEVERAGE AND OTHER RETAIL FACILITIES.

THERE ARE FIVE TRAIN STATIONS LOCATED WITHIN NORTHCOTE.

85% OF EMPLOYED RESIDENTS WITHIN NORTHCOTE WORK IN WHITE COLLAR JOBS.

ACCESSIBILITY & AMENITY

Northcote is home to the High Street retail strip which forms the Northcote Activity Centre, as well as the Northcote Plaza Shopping Centre, anchored by Coles and Kmart.

WHY MELBOURNE?

Melbourne has been voted as the world’s most liveable city for five consecutive years according to the Economist Intelligence Unit’s World Liveability Rankings 2015.

POPULATION

The population in Northcote is forecast to grow by 28% to 32,900 by 2036.

DEMOGRAPHICS

The age profile in Northcote is relatively young, with 52% of residents aged 20-49, compared to Greater Melbourne with 45%.

EDUCATION

There are six schools located within Northcote offering local residents both primary and secondary education options.

INCOME

Northcote’s average annual income for residents aged 15-64 of $55,341 is 23% higher than Greater Melbourne.

INFRASTRUCTURE INVESTMENT

Within Northcote, there is $438 million worth of public and private infrastructure investment in the pipeline to 2019.

RESIDENTIAL MARKET

The median unit sale price for Northcote has grown 101% over the decade to December 2015, compared to the wider City of Darebin which experienced 75% growth.

RENTAL MARKET

Median weekly rents for one, two and three bedroom units in Northcote grew at an annual rate of 7.2%, 7.4% and 6.1% respectively over the decade to December 2015.

2 NORTHCOTE MARKET OUTLOOK

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ACCESSIBILITY & AMENITYNorthcote

NORTHCOTE ACTIVITY CENTRE:

20Restaurants

10Fashion/Jewellery/Shoes

13Specialty Retail

10Specialty Services

16Hair/Beauty/Massage

PORT PHILLIP BAY

NORTHCOTE PARK

ALL NATIONS PARK

SANTA MARIA COLLEGE NORTHCOTE PLAZA SHOPPING CENTRE

MCG

WESTGARTH TRAIN STATION

MERRI TRAIN STATION

NORTHCOTE ACTIVITY CENTRE

Source: highstreetnorthcote.com.au

IGA

ALDI

COLES

NORTHCOTE MARKET OUTLOOK 3© URBIS.COM.AU

The southern edge of Northcote is positioned less than five kilometres north-east of the Melbourne CBD, with the suburb extending a further three kilometres north. Both the South Morang and Hurstbridge lines service Northcote, with five train stations within the suburb boundary; Croxton, Northcote, Merri, Westgarth and Dennis railway stations. There are 12 tram stops located along St Georges Road and High Street on Routes 11 and 86 respectively, providing additional access to Melbourne’s City Centre and beyond.

Recreational space is provided by six parks, including the 13 hectare All Nations Park, McDonnell Park, Johnson Park, Batman Park, R Thomson Reserve and Merri Park, extending along Merri Creek, the south eastern boundary of the suburb. Additionally, the Northcote Golf Club and the Northcote Aquatic & Recreation Centre provide local sporting facilities.

The Northcote Plaza Shopping Centre consists of 71 stores, including K-Mart and Coles, with Aldi located nearby. Additionally, the Northcote Activity Centre runs along High Street, which is home to 147 businesses, including bars, restaurants, cafes, chemists, banks, medical centres, retail stores and the historic Westgarth Theatre, providing excellent local amenity.

Melbourne has been awarded the title of the world’s most liveable city for five consecutive years by the Economist Intelligence Unit. The ranking recognises Melbourne’s health, education and infrastructure, for which Melbourne received perfect scores. The study also recognises the city’s cultural offering, clean environment and political stability.

The city is renowned as Australia’s sporting and events capital, hosting a number of international events annually. These include the Formula One Grand Prix, Melbourne Cup Spring Racing Carnival, Australian Open Tennis Grand Slam and the International Food and Wine Festival.

WHY MELBOURNE?

Source: Economist Intelligence Unit. 2015

Northcote is around five kilometres from the Melbourne CBD and is serviced by five train stations and two tram routes,

providing access to Melbourne’s City Centre.

2015 MOST LIVEABLE CITY(Ranking out of 100)

Melbourne, Australia: 97.5 #1Vienna, Austria: 97.4 #2Vancouver, Canada: 97.3 #3Toronto, Canada: 97.2 #4Adelaide, Australia: 96.6 #5Calgary, Canada: 96.6 #5

MERRI PARK

EDINBURGH GARDENS

MELBOURNE CBD

NORTHCOTE TRAIN STATION

CROXTON TRAIN STATION

HIGH STREET

ST GEORGES ROAD

PIEDIMONTE’S SUPERMARKET

2 NORTHCOTE MARKET OUTLOOK

© URBIS.COM.AU

ACCESSIBILITY & AMENITYNorthcote

NORTHCOTE ACTIVITY CENTRE:

20Restaurants

10Fashion/Jewellery/Shoes

13Specialty Retail

10Specialty Services

16Hair/Beauty/Massage

PORT PHILLIP BAY

NORTHCOTE PARK

ALL NATIONS PARK

SANTA MARIA COLLEGE NORTHCOTE PLAZA SHOPPING CENTRE

MCG

WESTGARTH TRAIN STATION

MERRI TRAIN STATION

NORTHCOTE ACTIVITY CENTRE

Source: highstreetnorthcote.com.au

IGA

ALDI

COLES

4 NORTHCOTE MARKET OUTLOOK

© URBIS.COM.AU

DEMOGRAPHICS, EDUCATION & EMPLOYMENT Northcote

The population in Northcote is forecast to increase from 25,800 in 2015 to 32,900 in 2036, representing 28% growth in the number of residents. Forecast population growth is indicative of growing demand for dwellings as new residents require residential properties.

The majority of residents in Northcote are aged 20-49, with 52% of residents falling within that age bracket, compared to Greater Melbourne with 45%. Additionally, a greater proportion of households in Northcote comprise of a non-related group or lone person. This indicates that Northcote is popular with a young demographic that are yet to start a family.

POPULATION AND KEY DEMOGRAPHICS

There are six schools located in Northcote, with three primary schools, two secondary schools and one special school. These schools provide local education options for residents, with some 32% of households in Northcote comprising of a family with a child younger than 15.

Of the residents in Northcote, 9.0% are undertaking tertiary education, which is higher than the proportion across Greater Melbourne, 6.5%. This is partly due to its proximity to major universities within Melbourne, including the University of Melbourne, which is ranked, 33rd in the world and 1st in Australia according to Times Higher Education World University Rankings 2015-2016, and is three kilometres from Northcote. RMIT is another high quality university which has a city campus located at the northern end of Melbourne’s CBD which is in proximity to Northcote. Additionally, tram route 86 connects Norhcote directly to the Bundoora campuses of La Trobe University and RMIT.

Northcote has a higher proportion of employed residents that work in white collar jobs than Greater Melbourne, with 85% compared to 72%. This is supported by the high proportion of professionals, with 43% in Northcote compared to 25% in Greater Melbourne. Further, the average annual income of residents aged 15-64 in Northcote in 2011 was $55,341, which was 23% higher than that of Greater Melbourne, $45,019. This highlights Northcote’s popularity with young professionals, supported by the suburbs accessibility to key white collar employment hubs, such as the Melbourne CBD, Docklands and Southbank.

EDUCATION INCOME & EMPLOYMENT

Northcote is popular with educated young professionals, with 52% of residents aged

20-49 and 85% of employed residents working in white collar jobs.

Source: ABS, ForecastID, Urbis

25,800 27,300

28,800 30,200

31,500 32,100 32,600 32,900

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2015 2018 2021 2024 2027 2030 2033 2036

RESI

DEN

T PO

PULA

TIO

N

POPULATION FORECAST

PER CAPITA INCOME*

NORTHCOTE

2011

Source: ABS, Urbis

* Residents Aged 15-64

Source: ABS, Urbis

Source: data.gov.au

UNDERTAKING TERTIARY STUDY

Northcote:

9.0%Greater Melbourne:

6.5%

Northcote: $55,341

Greater Melbourne: $45,019

2 Secondary Schools 1 Special

School3 Primary Schools

BRUNSWICK MARKET OUTLOOK 5© URBIS.COM.AU

INFRASTRUCTURE INVESTMENT &

AMENITYNorthcote

There is over $438 million worth of potential public and private infrastructure investment in the pipeline to 2019 within Northcote. One key project that will enhance the amenity available to residents of Northcote is the $250 million mixed-use development along Arthurton Road which is known as Arthurton Row. This will include shops, offices, a community centre and public swimming pool, and is expected to be completed by 2018.

The Northcote Activity Centre is undergoing over $53 million of mixed-use developments that are aimed at further improving High Street. The addition of new retail and commercial space is expected to enhance the amenity of the activity centre and benefit local residents and visitors.

Northcote is to recei e 4 8 million worth of public and pri ate infrastructure in estment through to 20 9 that will enhance the amenity and infrastructure a ailable to residents.

6 NORTHCOTE MARKET OUTLOOK

© URBIS.COM.AU

RESIDENTIAL MARKETNorthcote

Over the past decade, Northcote’s median sale price for units has grown at a rate of 7.2% per annum. Additionally, the

median sale price is more affordable and closer to Melbourne’s CBD than other popular inner northern and eastern suburbs.

Apartments and townhouses are a common dwelling type in Northcote, making up 40% of all residential properties. This statistic is reflected in the proportion of one bedroom dwellings in Northcote with 13% compared to compared to 6% in Greater Melbourne. The higher density dwelling types are supported by the demographic profile of the suburb, including student demand due to accessibility to tertiary education.

Northcote’s median unit sale price of $502,000 for the six months to December 2015 is less than some of the nearby suburbs that are further away from the Melbourne CBD. This includes the suburbs of Alphington ($550,000), Hawthorn East ($560,000), Heidelberg ($509,000), Ivanhoe ($635,000) and Ivanhoe East ($525,000). This makes Northcote an attractive suburb for purchasers looking to remain in proximity to inner Melbourne with relative affordability.

For the six months to December 2015, Northcote registered a median sale price for units of $502,000. Over the past decade, the median sale price for units has grown at a rate of 7.2% per annum. This is higher than Greater Melbourne, which experienced a growth rate of 5.4% per annum over the same time frame.

The total growth in the median sale price for units has grown 101%

over the decade to December 2015. This is greater than the total growth of the City of Darebin, within which Northcote is located, which grew by 75% over the ten years. Strong growth suggests that over the past decade, demand for units has grown, supply has tightened or a combination of strong demand and constrained supply has existed. This is indicative of a well-performing residential market.

MARKET OVERVIEW AFFORDABILITY

PRICE GROWTH

$502,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

$550,000

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

MED

IAN

PRI

CE

PERIOD (BI-ANNUAL)

Source: APM, PriceFinder; Urbis

MEDIAN APARTMENT PRICE UNIT - MEDIAN SALE PRICE GROWTHNORTHCOTE TEN YEARS TO DECEMBER 2015

DWELLING SIZE2011

Source: ABS, Urbis Source: APM PriceFinder, Urbis

Northcote $502,000 5km

Alphington $550,000 6km

Hawthorn East $560,000 7km

Ivanhoe $635,500 8km

Ivanhoe East $525,000 9km

Heidelberg $509,000 10km

MEDIAN UNIT SALE PRICE

DISTANCE TO MELBOURNE CBD

Source: APM PriceFinder, Urbis

Northcote:

101%City of Darebin:

75%

NORTHCOTE GREATER MELBOURNE

13% 6%1 Bedroom

34% 20%2 Bedroom

1% 1%No BedroomSTUDIO

41% 46%3 Bedroom

12% 28%4+ Bedroom

NORTHCOTE MARKET OUTLOOK 7© URBIS.COM.AU

ndicative of a healthy rental mar et, Northcote has a low vacancy rate of % and recorded total ten year median wee ly rent growth of % to December 2 .

RENTAL MARKETNorthcote

When compared with Greater Melbourne, Northcote has a high proportion of households that are renting. At the last census, 38% of households in Northcote were rented compared to 28% in Greater Melbourne. This indicates that Northcote is a popular suburb with investors and renters alike.

Over the ten years to December 2015, the median weekly rent for one, two and three bedroom units grew at an annual rate of 7.2%, 7.4% and 6.1% respectively, which is higher than the growth of Greater Melbourne, with 5.0%, 5.6% and 5.1%.

Total ten year median weekly rent growth for the decade to December 2015 in Northcote registered 103%, which is greater than the surrounding suburbs of Alphington, Brunswick East,

lifton ill, airfield, it ro orth and hornbur of ong term rental growth suggests there is a consistent level of demand for rental properties.

As at February 2016, Northcote registered a relatively low vacancy rate of 1%. This is lower than the surrounding suburbs of hornbur , runswic ast, it ro orth, lifton ill, airfield and Alphington. A low vacancy rate is indicative of a strong rental market as 99% of rental properties in Northcote are earning the investor rental income.

NORTHCOTE:

38%

NORTHCOTE:

103%

Northcote 1.0%Clifton Hill 1.2%Fitzroy North 1.2%Thornbury 1.3%Brunswick East 1.4%Fairfield 4.3%Alphington 4.3%

RENTAL POPULARITY

MEDIAN WEEKLY RENTS

VACANCY RATE

Source: ABS, Urbis

* Surrounding Suburbs include: Alphington, Brunswick East, Clifton Hill,

Fairfield, Fitzroy North and Thornbury

Source: ABS, Urbis

PROPORTION OF HOUSEHOLDS RENTING 2011

VACANCY RATE

TOTAL GROWTH - MEDIAN WEEKLY RENT UNITS, TEN YEARS TO DECEMBER 2015

GREATER MELBOURNE:

28%

Source: SQM Research

SURROUNDING SUBURBS*:

85%

Brisbane Level 7, 123 Albert St Brisbane QLD 4000

07 3007 3800

Perth Level 1, 55 St Georges Terrace

Perth WA 6000 08 9346 0500

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Sydney NSW 2000 02 8233 9900

Melbourne Level 12, 120 Collins St Melbourne VIC 3000

03 8663 4888

This publication is prepared on the instruction of Pace Developments and is not suitable for use other than by the party to whom it is addressed. As the publication involves projections and assumptions it can be affected by a number of unforeseen variables. The forecasts and assumptions are a prediction and whilst Urbis has made every effect to ensure that the forecasts and assumptions are based on reasonable information, they may be affected by assumptions that do not necessarily eventuate or by know or unknown risks and uncertainties. It should be noted that past performance is not necessarily a reliable indication of future performance. The information in the publication does not represent financial advice and should not be regarded as such. It has been prepared without taking into account your financial situation or investment objectives. You should consider the appropriateness of the information in regards to your current financial situation or needs. Urbis accepts no responsibility for the accuracy or completeness of any such material. The information is subject to change without notice and Urbis is under no obligation to update the information or correct any assumptions which may change over time. This study has been prepared for the sole use of Pace Developments and is not to be relied upon by any third party without specific approval from Urbis. This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) be reproduced, stored in a retrievals system or transmitted without prior written permission. Enquires

should be addressed to the publishers.