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Second Quarter │2013

PORT MACQUARIE Property Watch®

MARKET OVERVIEW This report is the result of an investigation into the house, unit and vacant land markets of Port Macquarie. Properties put on the market in the spring selling season have been mostly absorbed, with a notable increase in activity in the first quarter of 2013 amid a decline in the number of properties on the market. While the vacant land market exhibited early signs of recovery, while the rental market firmed over 2012 with an increase in rent prices for houses and units. The House and Unit Sales Cycle graph pointed to a market low in July 2012, with stronger results in the January 2013 half year. The January period registered similar activity the corresponding period in 2012, amid a rise in median price for attached and detached dwellings. The median house climbed by 3.2 per cent and the median unit increasing by two per cent over the 12 month period to January.

Change from Last

Year

Half Year

PORT MACQUARIE HOUSE & UNIT SALES CYCLE

HOUSE SALES

House Sales

HOUSE MEDIAN HOUSE RENTS

UNIT MEDIAN UNIT RENTS

House Median

Unit Median $450,000

900

$400,000 $390,000

800

$350,000

412

700

Number of sales

UNIT SALES

Unit Sales

1,000

376

326

$300,000 $279,500

600 240 278

500

216 201

270

$250,000 206

204 209

218

183

173

171

$200,000

179

207

400

166

156

151

155

Median sale price

MARKET INDICATORS

$150,000 300

The indicators depicted above are based on the year ending January 2013. Rental indicators are based on 12 months to December 2012.

512

508

496

200

379

308

323

356

388

438 349

448 385

422

362

399

$100,000 357

303

330

320

310

319

$50,000

100

2012 JUL

2013 JAN

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

KEY HIGHLIGHTS

$0

2003 JAN

0

Half year period

The median price for a house climbed by 3.2 per cent while that of a unit increased by two per cent over the 12 month period to January 2013. Most enquiries came from second home buyers who reinvested equity gained from the sale of their first home. A new CSU campus brought an influx of students to the area, increasing demand for low-end rental accommodation.

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Graph prepared by PRDnationwide Research. Source: PDS

The 12 month growth in median house price stemmed from an increase in the number of sales above $400,000. Observing the House Price Point chart suggested decline in house sales below $400,000 and the expansion of the $400,000 to $499,999 price point, while the share of sales toward the top of the market remained unchanged. The unit price points remained in line with the 2012 figures, with the exception of the top end, where five additional sales were recorded in the $600,000 plus bracket. Most enquiries came from second home buyers who reinvested equity gained from the sale of their first home. Long selling periods, common in the Port Macquarie market, forced a number of properties off the market, with some tuning into rental properties. Invigorated with new capital, upgraders were able to secure these properties. Interest in newly built product was scarce, although villa developments in Toorak Court and on Ocean Drive have sold well through 2012.

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HOUSE PRICE POINTS

The investment market

SIX MONTHS TO JAN 2013

A new Charles Sturt University (CSU) campus on Grant Street opened in May 2012, bringing an influx of students to the area, many of whom were seeking accommodation toward the lower end of the market. Parental signature was often required to secure the lease for students, with parents seeking smaller dwellings that could not be easily shared. This trend increased the competition for one and two bedroom apartments near the CBD, keeping vacancy rates below two per cent and supporting rent prices. In the 12 months to December the median rent price for a two bedroom apartment in Port Macquarie increased by 4.2 per cent to $250 per week. For the same period the median rent for a one bedroom dwelling closed at $190 per week, representing a 12 months growth of 8.6 per cent. The median rent of a house firmed to $350 per week over the period.

Less than $200,000 2% At least $600,000 $200,000 to $299,999 8% 11% $500,000 to $599,999 12%

$400,000 to $499,999 27%

$300,000 to $399,999 40%

Graph prepared by PRDnationwide Research. Source: PDS

RENTAL PRICE GROWTH $400 $350

The vacant land market

Three bedroom house $350

Two bedroom unit

$300 $250 $250

Median rent price

Gross yields for one and two bedroom units below $300,000 ranged from 5.6 per cent for a two-bedroom unit on Bridge Street to seven per cent for an apartment on Waugh Street. With a growing number of courses offered by CSU and the closure of the Port Gateway Caravan Park, demand for lower end rental accommodation is likely to continue in the near term. It is anticipated that the strong rents achieved in this market will stimulate investor activity over the next 12 months.

$200 $150

The vacant land market in Port Macquarie has shown early signs of recovery, with 41 lots transacting in the six months to January 2012. The results were encouraging given a fall in activity from the July 2010 peak. The North Harbour and Innes Lake areas recorded the highest number of transactions, while lot sizes ranged from 358 square metres in The Point Drive to 1,031 square metres in Flynn Street.

PORT MACQUARIE VACANT LAND SALES CYCLE

$100 140

$350,000 Number of sales Median

$50 120

$300,000

$0 $250,000

80

60

$200,000

101 91

61

59

52

66 58

42

42

41

37

$50,000

2012 JUL

2013 JAN

2011 JUL

2012 JAN

2010 JUL

2011 JAN

2009 JUL

2010 JAN

2007 JUL

2008 JAN

2006 JUL

2007 JAN

2005 JUL

2006 JAN

2004 JUL

2003 JUL

$0

2005 JAN

$400,000 to $499,999 4%

57

0

2004 JAN

Less than $200,000 16%

$100,000 68

64

63

20

2003 JAN

$500,000 to $599,999 4%

81

74

UNIT PRICE POINTS At least $600,000 8%

88

82

40

SIX MONTHS TO JAN 2013

$150,000

117

114

2008 JUL

Graph prepared by PRDnationwide Research. Source: Housing NSW

2009 JAN

Quarter

Number of sales

$230,000

Median sale price

100

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

The Port Macquarie property market appears to have stabilised after a three year decline in activity. Low interest rates and a firm rental market are both expected to increase enquiry from investors in the short term. However, at least six months are required to confirm a recovery in the vacant land market.

$300,000 to $399,999 24% $200,000 to $299,999 44% Graph prepared by PRDnationwide Research. Source: PDS

Research Analyst │Oded Reuveni-Etzioni P (02) 9947 9160 E odedetzioni@prd.com.au PRDnationwide Port Macquarie │Principal Tony Dekker P (02) 6583 8800 E tonydekker@prd.com.au This report was prepared by PRDnationwide Research. Source: PDS, ABS, Housing NSW, SQM. 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


Port Macquarie Property Watch Q2 2013