08_0108 QBE Powerpoint Template

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QBE LMI Residential Property Market
Overview October 2008
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Recent Events

• Shift in world economic outlook higher cost of
  funds.
• But sharp decline in interest rates locally
  recent 1 fall in cash rate in October 2008.
• First Home Owners Grant
• 14,000 for established
• 21,000 new
• Offsets in other sectors of the economy
• Lower AU
• Increased exports
• Boost to dwelling construction.

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Summary
Summary

• Rental market tightening, rents accelerating
  (but yields still low) pressure on supply.
• Weakening financial and economic environment to
  continue to impact on purchaser confidence.
• Improved affordability not expected to gain
  traction until 2009/10, as economic conditions
  stabilise.
• Affordability to remain constrained, despite
  recent reductions in interest rates price rises
  to be more aligned with wages growth.

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Summary

• Forecast cumulative median house price growth
  between 2008 and 2011

• Sydney 15
• Melbourne 16
• Brisbane 19
• Adelaide 16

• Perth 12
• Hobart 16
• Darwin 11
• Canberra 19

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Summary risk factors

• Deterioration of world economies and its impact
  on Australia.
• Duration of the credit squeeze and the cost of
  funds.
• Larger fall in interest rates.
• Magnitude of decline in commodity prices and
  subsequent impact on mining investment.