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First Quarter │2013

WARRNAMBOOL AREA Property Watch®

WARRNAMBOOL AREA MARKET OVERVIEW The following Property Watch report is the result of an investigation into the historic and current market trends of the Warrnambool Local Government Area (LGA). It will further highlight the area’s characteristics and trends to provide an understanding of the current market and aid in forecasting future house, unit and vacant land markets for the Warrnambool Area. In the two year period since October 2010 the Warrnambool Area housing market has remained stagnant with no change in median price and less than 5 per cent decrease in total sales transactions. Even though the Warrnambool Area has not witnessed any recent increase in median price, historically it has seen a 42 per cent increase in the 10-year period from October 2002.

HOUSE PRICE POINTS 2010 OCT At least $500,000 $450,000 to $499,999

Price point

2011 APR

10%

5%

$400,000 to $449,999

8%

$350,000 to $399,999

8%

10%

Less than $200,000

5%

3%

9%

15%

24%

22%

15%

5%

16%

22%

19%

5%

11%

16%

25%

22%

$200,000 to $249,999

7%

14%

2012 OCT

7%

14%

27%

$250,000 to $299,999

2012 APR

6%

4%

15%

$300,000 to $349,999

2011 OCT

10%

20%

22%

8%

The Warrnambool Area’s housing price point has seen consistency since October 2010 resulting in the levelling of median price at $315,000 in part due to the 6 per cent decrease in sales between $300,000 and $450,000 as well as an 8 per cent increase in the sub-$300,000 market. The Warrnambool Area’s residential market is shaping to return to its historical growth pattern in 2013 with the addition of the Victorian government’s first home buyer incentives as of January 2013 as well as indications of greater local investment and enquiry forging consumer confidence in the Warrnambool Area for a positive 2013.

WARRNAMBOOL AREA HOUSE SALES CYCLE

26%

11%

12%

350

$350,000 Number of sales

0%

6%

20%

6%

40%

5%

60%

Median $315,000

7%

80%

300

$300,000

250

$250,000

200

$200,000

150

$150,000

100

$100,000

50

$50,000

100%

LAND MEDIAN UNIT SALES UNIT MEDIAN UNIT RENTS The indicators depicted above are based on the year ending 30 June 2012, with exception to rental indicators which are based on the year ending 30 October 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

$0

2005 APR

LAND SALES

0

2005 OCT

HOUSE RENTS

2004 APR

HOUSE MEDIAN

2004 OCT

HOUSE SALES

2003 APR

Half Year

2003 OCT

Year

2002 OCT

Change from Last

Number of sales

MARKET INDICATORS

Median sale price

Proportion of total sales Prepared by PRDnationwide Research. Source: PDS

Half year period Prepared by PRDnationwide Research. Source: PDS

On the development front, the Warrnambool Area is presently witnessing a 238 million dollar influx in civil works and residential development (excl. infrastructure) expected to be completed by mid-2014. This current development, as well as the additional planning measures initiated by the Warrnambool City Council to rezone and release residential lots has provided a catalyst for residential developers and investors which will see further residential growth for the Warrnambool Area into 2013.

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www.prdresearch.com.au The Warrnambool Area rental market has remained reliable for investment with the house and unit rental market experiencing overall growth since the June 2010 rental reporting period. However with this downturn in total sales and median price evidenced over the past 24-month period, a correction may be seen in the rental market as a focus on absorption of stock begins to resurface with the count of residential vacant dwellings increasing from 77 to 146 lots in the 12-month period to October 2012. This increase in vacancy represents a near 50 per cent decrease and in turn identifies a weakening in Warrnambool’s current vacancy rate of 3.8 per cent, now realigning with the regional Victorian regional average of 4.0 per cent vacancy.

MEDIAN RENTS – Post Code 3280 2010 JUN

2011 JUN

2012 JUN

$150 Flat (1 Bed)

$150 $158 $210

Flat (2 Bed)

$230

Dwelling Type

$230 $280

Flat (3 Bed)

$300

$303 $250 House (2 Bed)

$260

WARRNAMBOOL AREA UNIT SALES CYCLE

$270 $290

House (3 Bed)

$310 160

$320

Median

$200

140 $250,000

$200

$350

$300

$250

$200

$200,000

Number of sales

Median rent Prepared by PRDnationwide Research. Source: RTA

80

$150,000

60 $100,000

40 $50,000

20

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 OCT

2006 APR

2005 APR

2005 OCT

2004 APR

2004 OCT

$0

2003 APR

0

2002 OCT

The Warrnambool City Council through rezoning and approval of various development plans are increasing the supply of residential land to the district rectifying the current outlook for residential markets – most notably;  The release of 250 hectares of land in the North Merri Residential Growth Area (2,200 lots) for residential growth.  The Industrial Land Use Review, rezoning 70 hectares of land for further development.  The construction of $238 million worth of civil and residential development currently in progress.

100

2003 OCT

$150

$100

$50

$-

$240,000

120

Median sale price

House (4 Bed)

$300,000

Number of sales

$185

Half year period

Prepared by PRDnationwide Research. Source: PDS

Although the median sale price for vacant land in the Warrnambool Area has seen an increase of over 50% in the past 10-year period since October 2002, the vacant land sales cycle (below) currently displays a noticeable plateau since October 2010 largely due to the diminishing number of available vacant lots. As mentioned earlier, this trend is being remedied with the Warrnambool City Council rezoning and releasing designated residential growth areas to combat the diminishing total sales, subsequently rectifying the future vacant land market.

WARRNAMBOOL AREA VACANT LAND SALES CYCLE 180

$160,000

Number of sales Median 160

LAND PRICE POINTS 9%

Price point

$160,000 to $179,999

12%

10%

$140,000 to $159,999

23%

$120,000 to $139,999

$100,000 to $119,999

4%

27%

40%

32%

11%

140

5%

16%

37%

15%

2012 OCT

11%

13%

26%

27%

13%

2012 APR

9%

13%

$140,000 $137,000

2011 OCT

26%

22%

30%

12%

15%

11%

8%

$120,000

120 $100,000 100 $80,000

80 $60,000 60 $40,000

40

$20,000

20

Prepared by PRDnationwide Research. Source: PDS

2012 APR

2012 OCT

2011 APR

2011 OCT

2010 APR

2010 OCT

2009 APR

2009 OCT

2008 OCT

2008 APR

2007 APR

2007 OCT

2006 APR

2006 OCT

100%

2005 APR

80%

2005 OCT

60%

2004 APR

40%

Proportion of total sales

$0

2004 OCT

20%

12%

2003 OCT

0%

7%

2003 APR

4%

2002 OCT

0 Less than $100,000

Median sale price

At least $180,000

2011 APR

Number of sales

2010 OCT

Half year period

Prepared by PRDnationwide Research. Source: PDS

Research Analyst │Angus McLean P (07) 3026 3357 F (07) 3166 0457 E angusmclean@prd.com.au PRDnationwide Warrnambool │ Principal Brad Miller P (03) 5562 2444 F (03) 5561 1444 E warrnambool@prd.com.au Prepared by PRDnationwide Research. Source: PDS, ABS, 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


Warrnambool Area Property Watch Q1 2013