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First Quarter │2013

MILDURA AREA Property Watch®

MILDURA AREA MARKET OVERVIEW The following investigation looks at the Mildura Area residential real estate market, which includes the suburbs Mildura, Merbein, Red Cliffs, Irymple, Ouyen, Werrimull, Murrayville, Walpeup and Hattah to form the Mildura Rural City (LGA). The Mildura Area house market has recorded a total of 266 settled transactions during the October 2012 half year period, to uphold three consecutive periods of positive growth representing a marked increase of 11.7 per cent in sales volume since the March 2011 period. A price point analysis undertaken for the Mildura Area house market has indicated no dramatic trends, however did note an increase in the sale of homes between the $100,000$199,999 price range (9 per cent increase from October 2011) explaining the current decrease in median price likely to continue in the short term as buyers maintain appetite for well-priced entry level property and target heavy price discounts from the higher end. The absorption of the Mildura Area housing stock should continue into 2013 as buyers indicate increased activity spurred by successive interest rate cuts and the Victorian government’s stamp duty discount being increased to 30 per cent (from 20 per cent) as of January 1, 2013. These incentives will provide the Mildura Area house market a solid base to see another positive shift in sales and median price toward the end of 2013.

MILDURA AREA HOUSE SALES CYCLE MARKET INDICATORS

450

$250,000

Number of sales Median

400

Year

$212,000

Half Year

HOUSE SALES

HOUSE RENTS

300

Number of sales

HOUSE MEDIAN

$200,000

350

$150,000 250 200 $100,000 150 100

Median sale price

Change from Last

$50,000

UNIT SALES 50

LAND SALES LAND MEDIAN The indicators depicted above are based on the year ending October 2012, except for rental indicators which reflect quarterly data up to June 2012.

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2012 APR

2012 OCT

2011 APR

2011 OCT

2010 APR

2010 OCT

2009 APR

2009 OCT

2008 APR

2008 OCT

2007 APR

2007 OCT

2006 APR

2006 OCT

2005 APR

2005 OCT

2004 APR

2004 OCT

2003 APR

$0

2003 OCT

UNIT RENTS

0

2002 OCT

UNIT MEDIAN

Half year period Prepared by PRDnationwide Research. Source: PDS

The Mildura Area vacant land market transaction numbers have fluctuated significantly in the past five years due to the inconsistency of total sales figures and continuing interest to expand the Mildura area via subdivision & Greenfield development. Having said this, the median price in Mildura Area for vacant land has remained steady since 2006, peaking again in October 2012 at $85,000. The current trend toward smaller and more affordable housing has led to a flattening in median price, however with added incentives for home buyers and a strengthening environment for developers and buyers alike will see the Mildura Area increase again in vacant land sales into 2013.

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MILDURA AREA VACANT LAND SALES CYCLE

HOUSE PRICE POINTS 2010 OCT

2011 APR

2011 OCT

2012 APR

2012 OCT

250 At least $400,000

3%

2%

6%

4%

$90,000

Number of sales Median

5%

$85,000

5%

6%

$300,000 to $349,999

7%

10%

5%

7%

8%

3%

11%

7%

17%

16%

200

$70,000

19%

$200,000 to $249,999

19%

25%

17%

29%

26%

27%

$150,000 to $199,999

27%

23%

$100,000 to $149,999

10%

10%

29%

26%

22%

10%

28%

10%

150 $50,000

$40,000 100 $30,000

12%

$20,000

50 Less than $100,000

4%

2%

Median sale price

$60,000

$250,000 to $299,999

Number of sales

Price point

$80,000 $350,000 to $399,999

1%

3%

$10,000 60%

80%

100%

Proportion of total sales

MEDIAN RENTS – 3500 PC

2012 APR

2012 OCT

2011 APR

2011 OCT

2010 OCT

2010 APR

2009 APR

2009 OCT

2008 APR

2008 OCT

2007 APR

2007 OCT

2006 APR

2006 OCT

2005 APR

2005 OCT

2004 APR

$0

2002 OCT

0

Prepared by PRDnationwide Research. Source: PDS

2004 OCT

40%

2003 APR

20%

2003 OCT

0%

Half year period

Prepared by PRDnationwide Research. Source: PDS 2010 JUN

2011 JUN

2012 JUN

$130 Flat (1 Bed)

Observation of the Mildura Area unit Price Point chart over the October 2012 period has seen a marked increase in the proportion of sales between $100,000-140,000, accounting for 17 per cent increase in sales since April 2012. There has also been a contraction in purchasing activity in the $140,000-180,000 market (showing a 19 per cent decrease of total sales) which together has led to an acute correction in the median price back to $137,757. The Mildura Area may now see some shift on the back of strengthening unit rental market and strong shift towards a more affordable product; this will lead to an increase in gross rental yield in turn increase investment into the Mildura Area unit market.

$125 $135 $160

Flat (2 Bed)

$165

Dwelling type

$175 $220 Flat (3 Bed)

$220 $235 $190

House (2 Bed)

.

$190 $205

MILDURA AREA UNIT SALES CYCLE

$225 House (3 Bed)

$235 140

$250

Median

$210

$180,000

120

$300

Median rent Prepared by PRDnationwide Research. Source: RTA

MILDURA UNIT PRICE POINTS

4%

$140,000 to $159,999

10%

13%

$100,000 to $119,999

13%

13%

Less than $100,000

9%

0%

13%

3%

20%

10%

15%

15%

3%

4%

17%

17%

22%

15%

60%

4%

27%

15%

15%

40%

80%

Proportion of total sales

2%

100%

2012 APR

2012 OCT

2011 OCT

2011 APR

2010 OCT

2010 APR

2009 OCT

2009 APR

2008 OCT

$0

2008 APR

7%

0

2007 OCT

2%

7%

2007 APR

9%

9%

19%

6%

2006 OCT

6%

19%

$120,000 to $139,999

21%

2006 APR

11%

$160,000 to $179,999

$20,000

27%

2005 OCT

$180,000 to $199,999

13%

$40,000

20

2005 APR

17%

2012 OCT

19%

$60,000

40

2004 OCT

15%

$80,000

2004 APR

Price point

$200,000 to $219,999

23%

2012 APR

$100,000

60

2003 OCT

15%

2011 OCT

$120,000

80

2003 APR

At least $220,000

2011 APR

$140,000 $137,757

2002 OCT

2010 OCT

100

Number of sales

$250

$200

$160,000

$150

$100

$50

$0

$220

Median sale price

House (4 Bed)

$200,000

Number of sales

$200

Half year period

Prepared by PRDnationwide Research. Source: PDS

The Mildura Area rental market has performed consistently since June 2010 with median rents in the house and unit markets increasing on average by 9 & 6.5 per cent respectively. Citing this evidence along with the Mildura Area’s vacancy rate (currently at 1 per cent) and investment yields strengthening in house and unit markets, buyers and investors alike will become increasingly attracted to the capital growth which is predicted to be seen in the Mildura Area in 2013.

Prepared by PRDnationwide Research. Source: PDS

Research Analyst │Angus McLean P (07) 3026 3357 F (07) 3166 0457 E angusmclean@prd.com.au PRDnationwide Mildura │ P (03) 5022 7750 F (03) 5022 2254 E admin@prdmildura.com.au Prepared by PRDnationwide Research. Source: PDS, Residential Tenancy Authority. 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


Mildura Area Property Watch Q1 2013