Second Quarter │2013
MAROUBRA AREA Property Watch®
MARKET OVERVIEW The Maroubra Area is bordered by Maroubra and Coogee in the east, the Southern Cross Freeway in the West and Botany Bay to the South. The Area is located in the local council areas of Botany Bay and Randwick. The Area is enjoying strong construction activity, with developments in the Prince Henry Hospital Site in Little Bay entering advanced stages of construction while various sites in Botany are selling off-the-plan. Units and townhouses dominated the Area’s market, with strata-titled dwellings representing between 60 and 72 per cent of sales since March 2001. The Sales Cycle graph depicts sustained growth in median unit price since September 2009, with a 5.3 per cent growth in the 12 months to March 2013, closing the period above the $600,000 mark for the first time.
MARKET INDICATORS Change from Last
The Unit Price Point chart over the March 2013 half year suggested that expansion in the share of units transacting for $600,000 plus was the largest contributor to the rise in median price, while price points under $600,000 contracted. Unit activity has been declining since March 2009, with 409 transactions recorded in the six months to March 2013.
UNIT SALES UNIT MEDIAN UNIT RENTS The indicators depicted above are based on the year ending March 2013.
While affordability is one factor contributing to the contraction in sales volumes, market uncertainty remains the main factor, with only a moderate growth in price for existing stock between March 2010 and September 2012. That said, units that were sold off the plan did not appear in the data and were likely to boost transaction numbers in the next 12 months. Furthermore, higher asking prices for new units are expected to further lift the median unit price over the short and medium term.
MAROUBRA AREA HOUSE AND UNIT SALES CYCLE House Sales
Tenants who vacated rental properties to become homeowners contributed to a softer rental market.
The share of slow moving stock is expected to contract as the market moves up and higher unit prices can be achieved.
The median unit price closed above the $600,000 mark for the first time, with a March 2013 figure of $615,000.
Number of sales
Median sale price
Half year period Graph prepared by PRDnationwide Research. Source: PDS
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UNIT PRICE POINTS 6 MONTHS TO MARCH 2013 At least $1,000,000 7% Less than $400,000 9%
$900,000 to $999,999 5% $800,000 to $899,999 5%
$400,000 to $499,999 14%
$700,000 to $799,999 14%
$500,000 to $599,999 22% $600,000 to $699,999 24%
Chart prepared by PRDnationwide Research. Source: PDS
www.prdresearch.com.au While units remained attractive to investors and a handful of first home buyers, upgraders and downsizers favoured family homes. The median house price firmed to $1,110,000, completing a 5.7 per cent rise in the 12 months to March 2013. The rebound in median price was a result of a strong growth toward the top end of the market ($1,500,000 plus) and a decline in house sales below $900,000. House activity recovered from the September 2012 lows but remained below the corresponding March period in 2012. The 260 house transactions recorded in the March 2013 half year equated to a six per cent decline from March 2013. While record low interest rates have only started to impact house activity, transaction numbers are expected to increase as families start to spend again. Valuers Herron Todd White expect a five to ten per cent per annum increase in Maroubra’s house prices over the coming years. The Days on Market chart depicts the time period required to sell a unit in the Area’s most active suburbs. The chart points to a large share of new stock taken up within two months, with 50 per cent of units remaining on the market for 60 days or less. While 36 per cent of units on the market have lingered for a period of 120 days or more, this figure is expected to contract as the market moves up and higher unit prices can be achieved.
MAROUBRA AREA DAYS ON MARKET – JAN TO MAY 2013
A rise in consumer confidence is a result of record low interest
120 days plus 36%
30 days or less 41%
rates having a positive impact on house sales, which are expected to increase as families start to spend again
90 to 120 days 7% 60 to 90 days 7%
30 to 60 days 9%
Chart prepared by PRDnationwide Research. Source: RP Data
HOUSE PRICE POINTS 6 MONTHS TO MARCH 2013 At least $1,500,000 23%
Less than $900,000 26%
$1,400,000 to $1,499,999 3% $1,300,000 to $1,399,999 7%
$900,000 to $999,999 11%
$1,200,000 to $1,299,999 10% $1,100,000 to $1,199,999 9%
$1,000,000 to $1,099,999 11%
With prices moving up many previous tenants are out of the rental market and seeking to become owner occupiers. This trend has softened the rental market, with an increase in vacancies observed since the beginning of 2013. Unit rent prices have remained steady in Randwick and increased substantially in Botany Bay over the 12 months to March 2013. A two bedroom unit in both Randwick and Botany Bay council areas achieved a median rent of $550 per week; the Randwick figure remained unchanged, while that of the Botany Bay LGA increased from $430 in the first quarter of 2012. One bedroom units in both council areas have encountered high demand from tenants, while investors enjoyed strong rental increases in the year to March. The median rent for a onebedroom unit in Botany Bay was $480 per week, while in the Randwick Region the figure was $450 per week, representing little growth from 2012. House rental data remained scarce in the Botany Bay Region, but figures from the Randwick LGA pointed to a 5.1 per cent increase in rent for a three bedroom house. That said, recent advertised rents for houses declined, pointing to softer demand.
Graph prepared by PRDnationwide Research. Source: PDS
Research Analyst │Oded Reuveni-Etzioni P (02) 9947 9160 E email@example.com PRDnationwide Perez Real Estate │ Principal Veronica Perez P (02) 8347 0700 E firstname.lastname@example.org This report was prepared by PRDnationwide Research. Source: PDS, Housing NSW, RP Data, HTW. 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
Maroubra Area Property Watch Q2 2013