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Second Quarter │2012

GEELONG/LARA AREA Property Watch®

GEELONG/LARA AREA MARKET OVERVIEW The following Property Watch report is the result of an investigation into the historic and current market trends of the Geelong/Lara Area, which encompasses the metropolitan area of Geelong and surrounding townships including Avalon, Lara, Leopold and Little River. The coastal townships in the area such as Torquay, Barwon Heads, Ocean Grove are excluded as they are a distinct market in themselves. It might be anticipated that the Geelong/Lara market would follow closely in the footsteps of the Melbourne market, Geelong itself being a large metropolitan centre and virtually on Melbourne’s doorstep. The Geelong/Lara area has been more typical of regional markets however with prices only recently showing signs of some softening, even though volumes have been trending downwards for several periods. The six months to January 2012 saw the first downwards movements in price for both the house and unit market since the global financial crisis. In the case of houses, prices have returned to the levels of twelve months ago, having peaked at $352,500 in the six months to July 2011. Unit prices whilst down on the peak of $285,000 from the July 2011 six months, are 3.2% up on January 2011 levels. The longer term analysis for houses and units shows a ten year growth rate of 8.4% and 7.5% respectively, reflecting the typically steady and reliable nature of the market.

Corio Bay, Geelong

MARKET INDICATORS Change from Last

Year

Half Year Volumes which had been trending downwards slowly, were significantly softer across all property types in the January 2012 six months.

HOUSE SALES HOUSE MEDIAN

-

UNIT SALES

GEELONG/LARA AREA HOUSE & UNIT SALES CYCLE

UNIT MEDIAN House Sales

LAND SALES

Unit Sales

House Median

Unit Median

3,000

LAND MEDIAN

$400,000 $350,000

2,500

KEY HIGHLIGHTS

Number of sales

$300,000

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

2,000

$285,000$250,000

1,500

$200,000 $150,000

Median sale price

$340,000

1,000 $100,000 $50,000

2011 JUL

2012 JAN

2010 JUL

2011 JAN

2009 JUL

2010 JAN

2008 JUL

2009 JAN

2007 JUL

2008 JAN

2006 JUL

2007 JAN

2005 JUL

2006 JAN

2004 JUL

2005 JAN

2003 JUL

2004 JAN

$0

2002 JUL

0 2003 JAN

Vacant land shortages see an 11.6% growth in the median price, which is in line with the ten year growth rate of 12.6%.

500

2001 JUL

House prices for the twelve months to January 2012 are flat, whilst unit prices are up 3.2%.

2002 JAN

Half year period

Prepared by PRDnationwide Research. Source: PDS

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The current shortage of Vacant Land has seen the median price

grow 11.6% in the last twelve months.

HOUSE PRICE POINTS Jan 5% 12

Jan 10

7%

37%

29%

13%

Jan 09

17%

34%

37%

17%

17%

29%

42%

0%

20%

8%

10%

24%

40%

8%

60%

5%

10% 4% 80%

100%

Percentage of Settled Sales Less than $200,000

$200,000 to $299,999

$300,000 to $399,999

$400,000 to $499,999

$500,000 to $599,999

At least $600,000

VACANT LAND PRICE POINTS 8%

56%

16%

Despite lower buyer sentiment, the house price points table indicates that the higher priced brackets are increasing their share of total sales. Sales under $300,000 dominated the market for the twelve months to January 2009 with 59% of all sales, however as at January 2012 they now represent only 30% of the market. Sales over $600,000 have doubled from 4% of the market to 8% over the same period. Vacant Land sales volumes have dropped more sharply than either Houses or Units, with supply being a major factor in the case of Land. The Geelong market has been well serviced with new land estates in recent years, and the take up on these properties has been very strong. Whilst there are several projects currently going through the regulatory process, there is a shortage of vacant land currently available in the Geelong/Lara area. The Geelong/Lara regions appeal and the current shortage of available land have seen the median price reach $191,900 for the January 2012 six months, an 11.6% growth on the median price of twelve months ago. That this median growth is close to the ten year average of 12.6% is testament to the strength of the current vacant land market and with buyer sentiment generally lower across all property types, a clear indication of the current shortage of available land. The price points table clearly demonstrates the upwards movement in prices in the Vacant Land market. The twelve months to January 2009 saw 88% of all land sell under $200,000 this figure has dropped to 64% as at January 2012. All of the price brackets above $200,000 have at least doubled their share of the market since January 2009.

Prepared by PRDnationwide Research. Source: PDS

Jan 12

In the case of Houses and Units softening sales levels appear to be largely due to weaker buyer sentiment. Media speculation regarding the state of the economy generally and particularly in relation to manufacturing, which has a significant presence in the Geelong economy with Ford and Alcoa both major employers, appears to have dampened buying sentiment. Peter Fort of Geelong PRD notes that enquiry levels remain strong, particularly at the lower price points. Enquiry levels from out of town investors, particularly Melbourne investors, is especially high reaching 50% of enquiry for some properties. Mr Fort says that well priced properties in the mid to lower range are selling strongly. Enquiry levels in the higher price brackets are also quite strong, but buyers appear to be slower to act at these levels.

GEELONG/LARA AREA VACANT LAND SALES CYCLE

9% 800

Jan 11

19%

54%

13%

$250,000

Number of sales Median

700

6%

$191,900

$200,000

600

Jan 10

32%

54%

7% 2%

41% 0%

20%

41% 40%

60%

8% 2% 80%

100%

Percentage of Settled Sales

Number of sales

500 Jan 09

$150,000

400 $100,000

300

Median sale price

Jan 11

25%

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200 $50,000

2011 JUL

2012 JAN

2010 JUL

2011 JAN

2009 JUL

2010 JAN

2008 JUL

2009 JAN

2007 JUL

2008 JAN

2006 JUL

2007 JAN

2005 JUL

2006 JAN

2004 JUL

2005 JAN

2003 JUL

At least $300000

$0 2004 JAN

$250000 to $299999

0 2002 JUL

$200000 to $249999

2003 JAN

$150000 to $199999

100

2001 JUL

$100000 to $149999

2002 JAN

Less than $100000

Half year period Prepared by PRDnationwide Research. Source: PDS

Prepared by PRDnationwide Research. Source: PDS

Research Analyst │Mark Corboy P (0400) 520 717 E markcs4u@gmail.com.au PRDnationwide Geelong │Principal Alex Campbell P (03) 52 222 566 F (03) 52 222 604 E alexc@prdgeelong.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 Geelong Property Watch Q2 l 2012  

PRDnationwide Geelong Property Watch Q2 l 2012

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