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Second Quarter │2013

MAITLAND LGA Property Watch®

This report is the result of an investigation into the house and unit markets of the Maitland Local Government Area (LGA). Located in the Hunter Valley, the LGA’s property market has historically been buoyed by a strong coal industry, generating employment and demand for new and existing houses. However, a recent decline in coal prices has slowed mining activity and increased market uncertainty. Property investors who bought in anticipation for a steady supply of mining-related tenancies have experienced extended vacancy periods and little growth in rent prices in the past six to nine months.

MARKET INDICATORS Change from Last

Year

Half Year

HOUSE SALES HOUSE MEDIAN HOUSE RENTS UNIT SALES UNIT MEDIAN UNIT RENTS

The indicators depicted above are based on the year ending March 2013.

House enquiries came from upgraders and retirees, with some seeking lifestyle lots in the top end of the market. Anecdotal evidence pointed to buyers preferring homes in established suburbs over new land estates. This was seen by the falling stock on the market in existing areas and soft sales activity in many new subdivisions. The median house price increased by 2.8 per cent in the 12 months to March 2013, closing the period at $370,000. The price recorded solid gains since March 2009, with a short period of consolidation in September 2011. A capital growth analysis conducted by PRDnationwide Research measured the annual gains achieved by vendors who sold in the six months to March 2013. The investigation revealed a moderately lower average capital growth of 4.6 per cent per annum compared to 5.0 per cent per annum in March 2012.

MAITLAND LGA HOUSE AND UNIT SALES CYCLE House Sales

KEY HIGHLIGHTS

House Median

Unit Median $400,000 $370,000 $350,000

129

The impact of softer resource prices has so far mainly affected the rental market, as the median house price continued to grow in the 12 months to March 2013. The median house price recorded solid gains since March 2009, with a short period of consolidation in September 2011.

1,000 $300,000

Number of sales

Unit Sales

1,200

800

58

$273,750 101 75

85

57

106

79

62

600

$250,000

68

83

119

83

91

69

103

63

85

99

68

81

987

400

$150,000

796

752 659

658

651 547

584

621

640

623

666

644

565

521

493

549

704

574

515

533

$50,000

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2012 SEP

2013 MAR

2011 SEP

2012 MAR

2010 SEP

2011 MAR

2009 SEP

2010 MAR

2008 SEP

2009 MAR

2007 SEP

2008 MAR

2006 SEP

2007 MAR

2005 SEP

2006 MAR

2004 SEP

2005 MAR

2003 SEP

2004 MAR

$0

2003 MAR

Most suburbs recorded median selling period between 60 and 90 days.

$100,000

200

0

$200,000

Median sale price

A house in Walter Parade, Black Hill

The impact of softer resource prices has so far mainly affected the rental market, as the median house price continued to grow in the 12 months to March 2013. The decline in house activity in the year to March was mostly due to strong performance in the corresponding 2012 period. The 533 transactions recorded in the six months to March represented a 24 per cent decline from the March 2012 half year but only 10 per cent softening from the five year average. Over the same period strata-titled dwellings’ activity remained unchanged.

Half year period Graph prepared by PRDnationwide Research. Source: PDS

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HOUSE PRICE POINTS SIX MONTHS TO MARCH 2013 At least $700,000 4% $600,000 to Less than $200,000 $699,999 4% 4% $500,000 to $599,999 $200,000 to 9% $299,999 18%

$300,000 to $399,999 35%

$400,000 to $499,999 26%

Graph prepared by PRDnationwide Research. Source: PDS

www.prdresearch.com.au When observing the House Price Points chart, a large share of transactions in the $300,000 to $399,999 price point was noted. The entry-level price range in the region remained between $200,000 and $299,999 and accounted for 18 per cent of the overall sales. In the most active suburbs of East Maitland and Rutherford affordable stock accounted for 17 and 31 per cent of transactions respectively. The number of days on the market measured how long it took to sell residential product in the Maitland region. In the three months to May 2013 over 400 properties were advertised for sale (several of which were sold over the period). A days-on-market analysis revealed that 25 per cent of the stock was advertised for a period of 30 days or less, while one third (33 per cent) was listed for 120 days or more. The Days on Market graph below illustrates the number of properties advertised in each price point. The graph confirmed that most properties advertised were in the $300,000 to $399,999 price point and suggested that properties toward the bottom end experienced short selling periods. Residences in this price bracket accounted for only nine per cent of the properties represented in the ‘120 days plus’ bar. Most suburbs recorded median days-on-the-market between 60 and 90 days. Morpeth, Gillieston Heights and Telarah recorded a longer median selling period while Metford’s median was below 30 days.

MAITLAND LGA DAYS ON MARKET 120 days plus

$200,000 or less

90 to 120 days

Days on market

The long term increase in rent prices equated 6.1 per cent per annum in March, acting as a reminder to the strong growth the area has experienced in the past five years

$200,000 to $299,999 60 to 90 days $300,000 to $399,999

$400,000 to $499,999

30 to 60 days $500,000 plus

30 days or less

0

20

40

60

80

100

120

140

Numer of properties

MEDIAN RENT PRICE

Graph prepared by PRDnationwide Research. Source: RP Data

3 BEDROOM HOUSE

The investment market

400

350

300

Median weekly rent ($)

260

270 280

290

320 300

330

340

350

250

200

150

100

50

Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13

0

Quarter

Table prepared by PRDnationwide Research. Source: PDS

Recent figures confirmed market stability, with the median weekly rent for a threebedroom house increasing by 2.8 per cent in the 12 months to March 2013. That said, the figure remained steady at $350 per week in the past three quarters, signalling equilibrium between supply and demand. The long term increase in rent prices equated 6.1 per cent per annum in March and acted as a reminder to the strong growth the area has experienced in the past five years. Attached dwellings performed well, recording an 8.7 per cent increase in the 12 months to March, equating to a five-year average growth of 8.6 per cent per annum. Similarly, the unit rental market returned a median weekly rent of $280 since September 2012, with vacancies increasing as several of the crews working on the Hunter Expressway left the region. After bottoming at two per cent in August 2012, vacancy levels increased to 2.4 per cent in April 2012, with 77 vacant properties reported for the 2323 postcode. A number of properties purchased by investors in new land estates were experiencing long leasing periods, with a fierce competition which is expected to soften rent prices in the short term.

Research Analyst │Oded Reuveni-Etzioni P (02) 9947 9160 E odedetzioni@prd.com.au PRDnationwide Hunter Valley │ Principal Rhonda Nyquist P (02) 4934 2000 E info@prdhuntervalley.com.au This report was prepared by PRDnationwide Research. Source: PDS, ABS, Housing NSW, SQM, RP Data. PRDnationwide does not give any warranty in relation to the accuracy of the information contained in this report. If you intend 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. © 2013


Maitland LGA Property Watch Q2 2013