Property Funds Association

Transcription

1 Property Funds Association El Niño or La Niña? Global Trends, Local Effects Bernard Salt 8 May 2014

2 Disclaimer These slides are not for commercial use or redistribution. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. KPMG have indicated within this presentation the sources of the information provided. KPMG has not sought to independently verify those sources unless otherwise noted within the presentation. No reliance should be placed on additional oral remarks provided during the presentation, unless these are confirmed in writing by KPMG. KPMG is under no obligation in any circumstance to update this presentation, in either oral or written form, for events occurring after the presentation has been issued in final form. The findings in this presentation have been formed on the above basis. Forecasts are based on a number of assumptions and estimates and are subject to contingencies and uncertainties. Forecasts should not be regarded as a representation or warranty by or on behalf of KPMG or any other person that such forecasts will be met. Forecasts constitute judgment and are subject to change without notice, as are statements about market trends, which are based on current market conditions. Neither KPMG nor any member or employee of KPMG undertakes responsibility arising in any way from reliance placed by a third party on this presentation. Any reliance placed is that party s sole responsibility. The presentation (and the accompanying slide pack) is provided solely for the benefit of the conference attendees and is not to be copied, quoted or referred to in whole or in part without KPMG s prior written consent. KPMG accepts no responsibility to anyone other than the conference attendees for the information contained in this presentation.

3 Australia is a good place to do business Biggest $UStn GDP United States China Japan Germany France United Kingdom Brazil Russian Fed Italy India Richest GDP > $US500bn $US GDP pc Norway 100, Switzerland 79, Australia 68, Sweden 56, United States 52, Canada 52, Japan 47, Netherlands 46, Germany 43, France 40, Australia Indicators of economic wealth for leading countries between 2002 and 2012 Fastest-rising GDP > $US500bn % 1. Russian Fed. 484% 2. China 466% 3. Iran 374% 4. Indonesia 349% 5. Brazil 347% 6. Australia 288% 7. Saudi Arabia 277% 8. India 255% 9. Turkey 239% 10. Norway 161% Source: Based on World Bank World Development Indicators data (updated April 2014); KPMG Demographics

4 We are a coastal people with a preference for coastal housing and lifestyle Areas of high population growth (>2% pa) and loss (<-1% pa) between 1992 and 2012 DARWIN BRISBANE PERTH SYDNEY CANBERRA Winners 2014 KPMG, an Australian partnership and Losers a member firm of the KPMG network of independent member firms affiliated with KPMG ADELAIDE MELBOURNE HOBART

5 Strong population growth is driving household formation at a national level property is a good business to be in 500, , , ,000 pa 416,000 pa 350, , ,000 pa 250, , , ,000 50, Natural Increase NOM Net population growth for Australia between 1950 and 2023 (based on ABS 2013 projections)

6 Australians now more likely than ever to visit and perhaps to shop overseas and overseas retailers are coming here Recent softening of the Australian dollar 800, , , , , , , , Jan-2001 Apr-2001 July-2001 Oct-2001 Jan-2002 Apr-2002 July-2002 Oct-2002 Jan-2003 Apr-2003 July-2003 Oct-2003 Jan-2004 Apr-2004 July-2004 Oct-2004 Jan-2005 Apr-2005 July-2005 Oct-2005 Jan-2006 Apr-2006 July-2006 Oct-2006 Jan-2007 Apr-2007 July-2007 Oct-2007 Jan-2008 Apr-2008 July-2008 Oct-2008 Jan-2009 Apr-2009 July-2009 Oct-2009 Jan-2010 Apr-2010 July-2010 Oct-2010 Jan-2011 Apr-2011 July-2011 Oct-2011 Jan-2012 Apr-2012 July-2012 Oct-2012 Jan-2013 Apr-2013 July-2013 Oct-2013 Jan Departures Arrivals $AUD Short term arrivals and departure movements benchmarked against the Australian dollar ; Reserve Bank of Australia

7 Investment opportunity is shaped by changes in the Australian demographic profile : 3.4 million (19.7m to 23.1m) : 4.2 million (23.1m to 27.3m) 500, , , , ,000 Kids & teenagers Schools Sports Young adults Student accommodation Affordable housing Mature adults Investment properties Holiday homes Active retirees Retirement living Grey nomads 250, , , ,000 50, Net change in Australian population by 5-year age group over 10 years to 2013 and 10 years to 2023

8 Commuter, resource and lifestyle towns are driving population and investment opportunities Ellenbrook Broome Karratha Perth Darwin Melbourne Brisbane Sydney Canberra Adelaide Hobart Grafton Moe-Newborough Burnie-Wynyard Ellenbrook Broome Karratha Melton Torquay Bacchus Marsh Emerald Busselton Gladstone - Tannum Sands Perth Bunbury Geraldton Highfields Yeppoon Darwin Cessnock Townsville Mackay Warragul - Drouin Port Hedland Kalgoorlie - Boulder Melbourne Albany Warwick Rockhampton Brisbane Gold Coast - Tweed Heads Sunshine Coast Cairns Bathurst Ocean Grove - Point Lonsdale Morisset - Cooranbong Sydney Ballarat Orange Bendigo Murray Bridge St Georges Basin - Sanctuary Point Drysdale - Clifton Springs Canberra - Queanbeyan Mount Isa Toowoomba Albury - Wodonga Tamworth Gympie Gisborne - Macedon Geelong Nelson Bay - Corlette Victor Harbor - Goolwa Goulburn Hervey Bay Bowral - Mittagong Newcastle - Maitland Wollongong Mildura - Wentworth Dubbo Echuca - Moama Adelaide Coffs Harbour Wagga Wagga Maryborough Ballina Port Augusta Shepparton - Mooroopna Port Macquarie Warrnambool Forster - Tuncurry Kurri Kurri - Weston Central Coast Port Lincoln Sale Muswellbrook Bundaberg Mount Gambier Armidale Griffith Batemans Bay Lithgow Hobart Alice Springs Taree Wangaratta Horsham Bairnsdale Lismore Ulladulla Port Pirie Launceston Nowra - Bomaderry Ulverstone Colac Traralgon - Morwell Devonport Singleton Whyalla Broken Hill Camden Haven Parkes Burnie - Wynyard Moe - Newborough Grafton Percentage growth in population over 12 months to June 2013 for the 100 largest significant urban areas (SUA) in Australia

9 The changing face of Australia we are still a suburban people Population (m) Growth 12 months to June 2013 Projection (m) June km 6-15km 16+km Total 2026 Sydney 4.8 8,000 23,000 51,000 81, Melbourne ,000 21,000 59,000 95, Brisbane 2.2 6,000 12,000 28,000 45, Perth 2.0 6,000 21,000 41,000 68, Adelaide 1.3 2,000 7,000 5,000 13, Total ,000 83, , , Balance Total Australia Population levels and annual population growth across metropolitan Australia

10 Here s where 22 million Australians spent Census night Separate Houses Apartments Townhouses Hotels, motels & B&Bs Retirement villages Caravan and camping parks 16,714,000 2,111,000 1,664, , , ,000 Nursing homes Staff quarters Residential Colleges Aged care accommodation Other & non classifiable Public hospitals 129,000 96,000 57,000 50,000 41,000 41,000 Attached to an office or shop Prisons Caravans, cabins and houseboats Boarding schools Boarding houses and private hotels Private hospitals 39,000 30,000 23,000 22,000 18,000 17,000 Manufactured home estates Improvised homes & tents Hostels for the disabled Other welfare institution Psychiatric hospitals Homeless hostels and refuges 16,000 13,000 10,000 8,000 7,000 5,000 Immigration detention centres Convents & monasteries Marinas Nurses quarters Corrective institutions for children Childcare institutions 4,000 4,000 3,000 2,000 1,000 1,000 Denotes accommodation up 20 per cent over previous census Number of Australian population living in certain types of housing based on 2011 Census

11 Focus opportunities on the youth and teenage market 120, ,000 80,000 60,000 40,000 20, , Net annual change in the Australian population aged 5-17 between 1951 and 2050 (based on ABS 2013 projections)

12 as well as on household formation 140, , ,000 80,000 60,000 40,000 20, Net annual change in the Australian population aged between 1951 and 2050 (based on ABS 2013 projections)

13 and on active retirees 100,000 80,000 60,000 40,000 20, , Net annual change in the Australian population aged between 1951 and 2050 (based on ABS 2013 projections)

14 Liquor, pharmacy, take-away, cafes and supermarkets is where retail spending and businesses have flourished Industry Liquor Pharmaceutical, cosmetic & toiletries Cafes, restaurants & catering Supermarket & grocery stores Takeaway food Recreational goods Furniture, floor coverings, housewares, textiles Clothing Hardware, building & garden supplies Electrical & electronic goods Footwear & other personal accessories Department stores Newspapers & books Total (incl other) ( ) 101.4% 89.5% 67.9% 62.9% 54.8% 40.7% 37.1% 37.0% 30.7% 28.5% 23.7% 7.6% -4.9% 48.2% ( ) 19.4% 34.0% 51.2% 22.3% 22.7% 16.1% 16.9% 10.3% 25.2% 1.8% 4.5% 0.8% -17.1% 19.5% Per cent change in retail sales by category over ten, five and one year to February 2014 ( ) 2.9% 4.2% 14.6% 5.6% 4.3% 13.9% 6.2% 8.3% 10.7% -0.6% -2.3% -4.4% -10.6% 4.9%

15 There has been a shift in the Australian economy away from manufacturing and towards healthcare 300, , , , ,000 50,000 Healthcare Professionals Education & Training Mining 5 years February 2004 up 1.4m (9.4m 10.8m) 5 years February 2014 up 700k (10.8m 11.5m) 0-50, ,000 Manufacturing, Agriculture, Info Media & Telecoms Net change in total jobs in Australia over two successive five-year periods, February 2004 February 2014

16 Australia is growing jobs in caring, selling, servicing, managing and doing Change No. 1. Aged or Disabled Carer 30, General Clerk 30, Child Care Worker 21, Electrician (General) 20, Checkout Operator 20, Accounts Clerk 17, Program or Project Administrator 16, Office Manager 16, Truck Driver (General) 14, Sales Assistant (General) 14,000 Change No. 11. Teachers' Aide 13, Miner 13, Barista 13, Chef 13, Accountant (General) 13, Carpenter 11, ICT Project Manager 11, Solicitor 11, Primary School Teacher 11, Fitter (General) 10,700 Net change in employment by occupation in Australia over 5 years to 2011

17 but is contracting jobs in typing, assembling, farming, machining and filling Change No. 1. Secretary (General) -28, Corporate Services Manager -14, Product Assembler -7, Mixed Crop & Livestock Farmer -6, Shelf Filler -6, Medical Laboratory Technician -5, Office Cashier -4, Metal Engineering Process Worker -4, Real Estate Representative -3, Vineyard Worker -3,100 Change No. 11. Dairy Cattle Farmer -3, Sewing Machinist -2, Safety Inspector -2, Switchboard Operator -2, Mixed Livestock Farmer -2, Credit or Loans Officer -2, Residential Care Officer -2, Analyst Programmer -2, Integration Aide -2, Telecommunications Technician -1,900 Net change in employment by occupation in Australia over 5 years to 2011

18 Urban development could progress as a series of connected cells leads to Mosaic City Mosaic City Home Work Work CBD Home Self-contained sub-region Decentralise offices, retail, hospitals, universities Bolt on new sub-regions as required Source: KPMG Demographics

19 Common themes in the corporate world and in the community Corporate 1. More for Less customers want you to deliver more and to pay you less 2. Competition from left field often associated with new technology 3. Globalisation new players discovering Australia Community 1. Celebration of the individual rights, entitlements minorities 2. Loss of faith in institutions church, unions, big business, politicians, not sure about public sector 3. Consequential rise of the need for transparency, accountability, apology and regulation Source: KPMG Demographics

20 Contact bsalt@kpmg.com.au #bernardsalt Bernard Salt Demographer linkedin.com/in/bernardsalt