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Second Quarter │2012

ARARAT AREA Property Watch®

ARARAT AREA MARKET OVERVIEW The following Property Watch report is the result of an investigation into the historic and current market trends of the Ararat Local Government Area, which encompasses approximately 4,230 square kilometres in the south west of Victoria. Ararat, the largest centre in the LGA with a population of just over 7,000 is situated to the North of the region, other townships include Moyston, Warrak, Buangor, Willaura, Wickliffe and Lake Bolac. The six months to February 2012 saw some of the lowest transaction levels over the last ten years across all property types in the Ararat LGA. Volumes across Victoria have been almost universally lower, and the Ararat region was no exception. It appears that media reports of greater levels of caution, and higher levels of saving across Australian consumers are major contributors to the general slow down in property markets. The February 2012 six months saw only 57 houses transact. This figure is 29.6% lower than the 81 transactions for the same period to February 2011. Unit sales are always at very low levels compared to other regions, with only one transaction having occurred outside of Ararat in the last ten years. Unit sales have averaged 11 transactions for a six month period over the five years to February 2011. The February 2012 six months saw 7 transactions recorded.

Acacia Tourist Park, Ararat

MARKET INDICATORS Change from Last

Year

Half Year

HOUSE SALES HOUSE MEDIAN UNIT SALES

Vacant land sales have averaged 26 transactions for a six month period in the five years to February 2011, with transaction numbers ranging from 15 to 45. The February 2012 six months saw only 12 transactions recorded, a 53.8% decrease on the five year average. Transactions were spread across the region with Ararat (4) and Lake Bolac (3) followed by one transaction each at Elmhurst, Maroona, Moyston, Tatyoon and Wickliffe.

ARARAT AREA HOUSE & UNIT SALES CYCLE

UNIT MEDIAN House Sales

LAND SALES

Unit Sales

House Median

Unit Median

180

LAND MEDIAN

$300,000

160 $250,000 $242,500

120

$200,000 $165,000

100 $150,000 80 60

$50,000 20

2012 FEB

2011 FEB

2011 AUG

2010 FEB

2010 AUG

2009 FEB

2009 AUG

2008 FEB

2008 AUG

2007 FEB

2007 AUG

2006 FEB

2006 AUG

2005 FEB

2005 AUG

2004 FEB

2004 AUG

2003 FEB

$0 2003 AUG

0 2002 FEB

In spite of a moderate decrease in the median for February 2012, the ten year growth rate for houses stands at a very strong 9.5%

40

2002 AUG

Strong capital growth has been seen for well positioned units in Ararat

$100,000

2001 AUG

Median sale price

KEY HIGHLIGHTS

140 Number of sales

The indicators depicted above are based on the twelve months ending February 2012.

Half year period

Prepared by PRDnationwide Research. Source: PDS

www.prdresearch.com.au

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In spite of numerous short term fluctuations the vacant land ten year growth rate stands at a solid

8.9%

9%

Feb 11

7%

Feb 10

33%

31%

16%

Feb 09

27%

31%

20% 0%

30%

18%

34% 20%

15%

28%

14%

22%

40%

The house price points table shows the strength of the $100,000 to $199,999 bracket which has increased its share of sales from 56% of the market for the twelve months to February 2009 to 63% of all sales for the same period in 2012. Sales under $100,000 have decreased from a significant 20% of all sales to only 9% over this same period. Sales over $200,000 have remained relatively stable at around 25% of the market over this period.

Two of the 13 sales mentioned above had been previously purchased in the last ten years. Held for periods of four and six years, these two units returned capital growth of 15.8% and 8.0% per annum.

14%

60%

Given the lower transaction levels it is not surprising that prices generally softened across the region as well. The median house price for the six months to February 2012 closed at $165,000, down 4.1% on the close from twelve months earlier, although it was significantly higher than the $156,000 posted for the six months to August 2011. Local PRDnationwide Branch Manager David Jennings reports that recent interest and sales have been strong up to $200,000 with houses over $250,000 generally spending a little more time on the market.

Unit prices defied the lower volumes to record a much stronger median price of $242,500. Given that there were only seven transactions, not too much should be read into this figure. The majority of the properties that were sold are centrally located, newer stock, it would appear that for this period, most of the sales came from the higher bracket of properties. Having said that, the August 2012 six months closed with an even higher median of $275,000 culminated from 6 transactions, with a very similar pattern of well located units selling.

HOUSE PRICE POINTS Feb 12

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80%

100%

Percentage of Settled Sales

Less than $100,000

$100,000 to $149,999

$150,000 to $199,999

$200,000 to $249,999

$250,000 to $299,999

At least $300,000

The vacant land median price closed the February 2012 six months at $70,000 down a significant 11.4% on the close from twelve months earlier. With low sales volumes, the median price has tended to be relatively volatile and the current movement appears to be a continuation of that trend. The ten year growth rate stands as 8.9% showing a strong upwards trend through the numerous short term price fluctuations. The vacant land price points table shows the emergence of the over $150,000 price bracket in recent years. The twelve months to February 2012 saw only 7% of sales achieve a price of $150,000 or greater, the next two twelve month periods have seen this section of the market grow to a substantial 32%.

Prepared by PRDnationwide Research. Source: PDS

ARARAT AREA VACANT LAND SALES CYCLE VACANT LAND PRICE POINTS

Feb 11

35%

28%

Feb 10 Feb 09

$60,000

56%

29%

7%

55%

$70,000 $70,000

50

19%

37%

$80,000

60

19%

40%

$90,000

Number of sales Median

10%

40

$50,000

30

$40,000 $30,000

Median sale price

32%

Number of sales

Feb 12

70

20 0%

20%

40%

60%

80%

100%

Percentage of Settled Sales

$20,000

10

$10,000

Prepared by PRDnationwide Research. Source: PDS

2012 FEB

2011 FEB

2011 AUG

2010 FEB

2010 AUG

2009 FEB

2009 AUG

2008 FEB

2008 AUG

2007 FEB

2007 AUG

2006 FEB

2006 AUG

2005 FEB

2005 AUG

2004 FEB

2004 AUG

At least $300,000

2003 FEB

$250,000 to $299,999

2003 AUG

$200,000 to $249,999

2002 FEB

$150,000 to $199,999

$0 2002 AUG

$100,000 to $149,999

2001 AUG

0 Less than $100,000

Half year period

Prepared by PRDnationwide Research. Source: PDS

Research Analyst │Mark Corboy P (0400) 520 717 E markcs4u@gmail.com.au PRDnationwide Ararat │Branch Manager David Jennings P (03) 5352 2555 F (03) 5352 2511 E ararat@prd.com.au PRDnationwide does not give any warranty in relation to the accuracy of the information contained in this report. If you inte nd to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections. PRDnationwide will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. Prepared by PRDnationwide Research © All medians and volumes are calculated by PRDnationwide Research. Use with written permission only. All other responsibilities disclaimed. © 2012

PRDnationwide Ararat Property Watch Q2 l 2012  

PRDnationwide Ararat Property Watch Q2 l 2012