Maroubra: Market Insights

Opportunity Through Activity

At CPS Property we have dedicated ourselves
to helping clients build wealth through
strategic property investment across Australia
for over a decade. As our clients know, we
have a proven track record in helping change
peoples lives and create wealth through
property. We firmly believe that this comes
down to our experience in the industry and
subsequent ability to research the market and
identify trends that will enable our clients to
take advantage of outstanding investment
opportunities.
MAROUBRA: AT A GLANCE
Located 10 kilometres south of the Sydney
central business district, in the Local
Government Area of the City of Randwick,
Maroubra is a beachside suburb steeped in
history with an eclectic and increasingly
gentrified population. Traditionally considered
the suburb of last resort for beachside
buyers in Sydneys east, Maroubra has seen
significant change to its demographics and
amenities in recent years, which has resulted
in increased demand and a subsequent uplift
in property prices. This will be heightened
through future infrastructure developments in
the region.
In the 2011 census the population of
Maroubra was 29,594, living in 12,894
dwellings with an average household size of
2.45. This is estimated to have increased to
32,760 as of June 2015.
Currently, 2 out of
every 3 dwellings are
either units/flats
(45.5%) or
terraces/townhouses
(21.2%), well above the
Sydney figure of 38.6%,
while 41% of dwellings
are rental properties,
notably higher than
the Sydney figure of
31.6%.
Further to this, the proportion of residents in
the age groups of tertiary education and
independence (18 to 24) and young
workforce (25 to 34) was markedly higher
than the Sydney figure, a positive for property
performance as these age groups typically
have a greater demand for rental
accommodation. This demographic profile is
typical for regions with a high level of amenity
in key locations, with Maroubra ticking all the
boxes for strong tenant demand - as well as
being one of the easts few surfing beaches, it
boasts a busy retail strip at the junction,
nearby shopping at Westfields Eastgardens,
good school options, and is within easy reach
of numerous employment hubs.
Maroubra has a strong workforce profile, as is
expected with its proximity to the CBD and
local amenity, with most workers being in
traditionally higher paid, white collar
industries.
OCCUPTATIONS
Professionals 31.30%
Clerical & admin workers 16.40%
Manager 13.60%
INDUSTRY
Health care and social assistance 12.00%
Professional, scientific and technical 11.10%
services
Education and training 9.60%
While there has been recent strong growth in
Maroubras property prices, we believe we
are witnessing a perfect storm of future
demand drivers that will help promote
sustained demand for quality properties in the
future, over and above other neighbouring
regions. We have outlined our 10 Reasons
Why below:
CPS: Maroubra Market Insight
November 2016
 MAROUBRA: 10 REASONS WHY
1: Life style amenity
As mentioned, Maroubra is known for its
beachside location, cafes, restaurants, parks,
and other lifestyle amenities. While it is often
difficult to quantify this factor, a recent and
wide ranging survey by McCrindle Research
and The Urban Taskforce surveyed over 1,000
Sydneysiders to create an Urban Living $3,000
Index. The Urban Living Index is an ongoing $2,500
$2,000
measure of the liveability of suburbs in
$1,500
Sydney and considers the affordability, $1,000
community, employability, amenity and
accessibility of an area to determine how
liveable it is. Amenity is measured on the
following indicators;
Educational attendance
Arts and recreation
Restaurants and cafes
Shopping
Just nine suburbs of Sydneys 228 received a
perfect amenity score of 20 out of 20, with
Maroubra being one of them:
This is clear evidence of the often difficult to
quantify high levels of amenity that Maroubra
has on offer, which will see it continue to
experience high levels of demand for property
in the area.
2: Sydney's last non-gentrified beach
Gentrification is the process of renovation and
revival of deteriorated urban neighbourhoods
through an influx of more affluent residents,
which results in increased property values.
In our opinion, considering its location and
high level of amenity, Maroubra is the last
non-gentrified beach in eastern Sydney, and is
poised for gentrification. This is supported by
the 2011 census income statistics (the most
recent data);
Median Incomes
$500
$-
Personal Incomes Household Incomes
This shows that
income levels in
Maroubra are 60%
of the average
incomes of all
other eastern
beaches excluding
Maroubra. We
believe that there
will be a
significant jump in these income levels with
the incorporation of the new census data this
year, and will most likely continue to increase
into the future, as more affluent residents
move to Maroubra. Gentrification will also be
promoted through property price increases,
as more development becomes possible on
previously unfeasible sites held by developers.
3: Affordability
As mentioned, Maroubra is one of the last
eastern city beaches to be gentrified, and
therefore, there is a distinct difference in its
property prices compared to its neighbours,
as can be seen below. We believe affordability
CPS: Maroubra Market Insight
November 2016
will be one of the major drivers for Maroubra 5: New Transport Infrastructure
price growth in the short term as
a): Light rail extension
gentrification takes place.
A study into expanding the CBD to South East
Light Rail past Kingsford to La Perouse, via
Maroubra Junction, has been commissioned
by the state government. An engineering firm
has been asked to investigate building the
8.2km line, which has resident and council
funded support, and we believe will gain
considerable weight due to the increasing
development and population increases
occurring in the south-east precinct.

4: Reduction in Social Housing

Maroubra has long had an association with
higher proportions of public housing, as can
be seen below in the current figures.
However, there has been a trend of slowly
declining public housing numbers, as
observed below, as the state government
seeks to integrate social housing in more
regions and promote gentrification in highly
desirable inner city areas. This is a step away
from the existing model of higher proportions
of social housing in certain areas, and results
in both a better social structure and b): New metro line
community through greater integration of
social housing, as well as the flow on effects Planning is also underway for a new metro
of opening-up more properties for line extension, intended to bring relief to
gentrification. some of Sydney's service growth areas, such
as the Bays Precinct around Rozelle, and is
Region Social Housing Tenure likely to contemplate an eastward expansion
Maroubra 2011 9.2% to Maroubra and Long Bay.
Maroubra 2006 9.9%
The benefits of this infrastructure investment
Sydney 2011 5.0%
on property prices and amenity in the area
Sydney 2006 5.0%
has already been evidenced in the recent
opening of the inner west light rail around
Dulwich Hill. While not confirmed, we believe
either option has strong potential and would

CPS: Maroubra Market Insight

November 2016
help increase amenity and demand in the bringing many new much needed homes and
area. jobs near the city. This will have numerous
positive effects for property in Maroubra.

7: Pagewood Green: A new benchmark

6: Proposed relocation of long bay jail
The state government is currently reviewing a
plan to rezone and sell the 32-hectare long
bay jail site. Although ultimately not
confirmed, and with no firm timeline for the
closure of the prison if this were to occur, it
would give further weight to a light rail
extension, remove whatever (minimal) stigma
remains around property values in the
immediate vicinity of the jail, and will see
significant new mixed-use development,
Developer Meritons largest ever project, the
$3 billion Pagewood Green, is a mixed-use
development on the old British American
Tobacco Australia site next door to Westfield
Eastgardens, and will see 3,000 apartments
constructed over the next decade. This
development will not only bring new cafes,
restaurants, shops and potentially even assist
in bringing the light rail to the area, but may
also help increase prices of existing units in
the area. This is often created through setting
a new benchmark in pricing for units, from
which, if demand remains consistent, existing
units are often able to benefit from.
8: Tight Supply
Not since 2005 has the vacancy rate for
Maroubra been above 3% (considered a
market in balance), and vacancy rates are
currently sitting at 1% and have been

Maroubra Case Study: Opportunity Through Activity

To take advantage of the shifting demographics and As can be seen, a significant return
gentrification that Maroubra is experiencing, CPS Property on the initial investment was
assisted a client with the purchase of an existing property generated, resulting in a strong net
and subsequent renovation. This was a process of creating capital gain with a negligible risk
opportunity and growth through activity effectively profile.
manufacturing equity. A summary of the investment and
its performance is shown in the below table:
Purchase date 16/03/2015
Purchase Price $745,000
Rental Return (at purchase) $430/week (3% yield)
Renovation Cost $49,882
Rental Return (post renovation) $750/week (4.9% yield)
Estimated current value $890,000
Return on Investment 34.40%
Net capital gain $95,118

CPS: Maroubra Market Insight

November 2016
 declining for the past 4 years. This is a trend at property. Deloitte defines this central Sydney
odds with the rest of Sydney and despite region as Global Sydney, as shown below.
record low interest rates and increased
construction volumes. This is the result of not
only strong demand drivers, but also limited
supply of developable land due to zoning
restraints and character protection. This lack
of supply will play a major role in ensuring
Maroubra properties sit on the right side of
the supply/demand equation.

9: Income increases
In a relatively short period, household
incomes have increased above Sydneys and
the national figures, a strong indicator for Statistics show that as of 2011, Global Sydney
increased property prices. makes up just 17% of NSWs population, but
accounts for a significantly higher proportion
Region Household Incomes Increase of the states jobs and Gross Regional Product
Maroubra 2011 $1,428 (GRP). As can be seen below, this increased
30% output is only forecast to increase, which will
Maroubra 2006 $1,101
Sydney 2006 $1,154 see properties in Global Sydney, of which
25% Maroubra is centrally located, continue to be
Sydney 2011 $1,447
in high demand well into the future.
Australia 2011 $1,234
20%
Australia 2006 $1,027
Global Sydney: Proportion of NSW
As mentioned earlier, as gentrification 2011 2031
continues incomes will no doubt continue to
increase at a faster rate than regional 41% 43%

benchmarks. 28% 28%

17% 18%

10: At the centre of Sydneys future population Population Jobs GRP

and jobs growth
While much has been written of planned
decentralisation around Sydney, we believe
that being close to the CBD, other
employment opportunities and key amenities
will always ensure you have sustained
demand for property. Forecasts from Deloitte
and Infrastructure NSW show that while only
making up a smaller proportion of Sydneys
population, global Sydney will continue to
make up a greater share of employment and
GDP. Maroubra is well located within Global
Sydney to experience sustained demand for
CONCLUSION
Maroubra is a highly desirable location with
numerous strong demand drivers working in
its favour, and with the potential for several
others to significantly increase demand for
properties in the suburb. In our opinion, a
passive or active investment will deliver solid
and sustained returns into the future, as
Maroubra continues to gentrify and evolve.

CPS: Maroubra Market Insight

November 2016