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June Quarter │2013

KYOGLE AREA Property Watch®

KYOGLE AREA MARKET OVERVIEW The following Property Watch report is the result of an investigation into the historic and current market trends of the Kyogle Area, which encompasses the suburbs of Kyogle, Geneva, and New Park.

Typical 4 Bedroom charming house, located in 8 Rous Street Kyogle

MARKET INDICATORS Change from Last

Year

Over the past six months ending March 2013, the Kyogle property market had experienced renewed buyer confidence, after a three year period in which the market observed a significant contraction of sales activity. Buyer enquiry has improved throughout the beginning of 2013, with investors slowly arriving after being drawn in by reduced interest rates and the relative affordability offered in Kyogle. Activity in the past six months is up 37.5 per cent, and a result of this increase in demand has caused the median house price to grow 8.2 per cent, to $236,500. A large portion of the buyer enquiry derives from Southern Queensland (mainly the Gold Coast) where people might come for a day trip and like the small-town, local country atmosphere.

KYOGLE AREA HOUSE SALES CYCLE Half Year 70

$350,000 Number of sales

HOUSE SALES

Median

60

$300,000

HOUSE MEDIAN 50

$250,000

40

$200,000

30

$150,000

KEY HIGHLIGHTS

20

$100,000

10

$50,000

There is a total proposed investment of just over $17 million in the Kyogle Area pipeline, with limited residential development currently occurring within the Kyogle Area.

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2012 SEP

2013 MAR

2011 SEP

2012 MAR

2011 MAR

2010 SEP

2010 MAR

2009 SEP

2008 SEP

2009 MAR

2007 SEP

2008 MAR

2006 SEP

2007 MAR

2006 MAR

2005 SEP

2005 MAR

$0

2004 SEP

Strong buyer enquiry arriving from South East Queensland attracted by the reduced interest rates, and relative affordability offered in Kyogle.

0

2004 MAR

House sales below $250,000 accounted for 63.6 per cent of total sales in the March 2013 six months.

Median sale price

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

Number of sales

$236,500

Half year period Prepared by PRDnationwide Research. Source: PDS

Local enquiry levels are also increasing, as renewed optimism that the market is improving spreads. Local retirees are looking to shift from larger properties to move closer to town and downsize however there is a lack of appropriate lowmaintenance “brick and tile” style homes available on the market. The majority of house sales occur in the affordable price range of $150,000 to $249,999, with almost two thirds of the total sales (63.6 per cent). Observing the House Price Points graph, it is shown that the underlying activity trend has seen houses becoming more and more affordable over the past couple years. Early indications for the second quarter of 2013 show that appropriately priced property within the $200,000 to $250,000 price bracket sell quickly.

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KYOGLE AREA HOUSE PRICE POINTS 2010 MAR

Price points

Through the affordability of a lower median price, investors are realising strong investment return with an average six per cent gross yield.

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At least $400,000

6.3%

$350,000 to $399,999

12.5%

$300,000 to $349,999 $250,000 to $299,999

House 2 Bedrooms

$225

3 Bedrooms

$274

4 Bedrooms

$280

9.1%

20.0%

25.0%

11.8%

32.0%

20%

13.6%

29.4%

20.0%

9.1%

29.4%

5.9%

5.9%

0%

Average Wkly Price

5.9%

24.0%

$100,000 to $149,999

2013 MAR

11.8%

31.3%

$150,000 to 3.1% $199,999

2012 MAR 4.0%

21.9%

$200,000 to $249,999

CURRENT MARKET WEEKLY ASKING RENTS

2011 MAR

36.4%

27.3%

4.5%

40% 60% Percentage of settled sales

80%

100%

Prepared by PRDnationwide Research. Source: PDS

A rental analysis of houses available to rent on the market shows little price difference between the average weekly asking price of a three bedroom house ($274p/w) and four bedroom house ($280p/w). Through the affordability of a lower median price, investors are realising strong return on investment with an average six per cent gross yield.

KYOGLE AREA AVERAGE CAPITAL GROWTH HOUSES

Prepared by PRDnationwide Research. Source: Realestate.com.au

45.0%

40.0%

Average Gross Yield

6.0%

Prepared by PRDnationwide Research. Source: PDS, Realestate.com.au

35.0%

Average capital growth p.a.

AVERAGE GROSS RENTAL YIELD 3 BEDROOM HOUSE

30.0%

25.0%

20.0% Average Capital Growth 16.4% 15.0%

10.0%

5.0%

INVESTMENT PIPELINE

0.0% 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR

$8,000,000

Six month period

Prepared by PRDnationwide Research. Source: PDS

$7,000,000

Investment value

$6,000,000 $6,200,000 $5,000,000 $3,600,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0

Investment type

Prepared by PRDnationwide Research. Source: Cordell

A resale analysis was conducted on Kyogle Area houses resold up to the March 2013 six month period, to reveal the average annual capital appreciation realised in this region. The analysis yielded a strong average annual capital growth of 16.4 per cent per annum over the past decade. These houses were held for an average period of four years, indicating this strong level of growth was primarily attained prior to the credit crisis which unfolded during 2008, slowing the strong growth achieved in housing values. There is a total proposed investment of just over $17 million in the Kyogle Area pipeline, with the largest portion of investment allocated to the 200 lot Mayfield Estate residential development, which is within the first stage of release. While there is limited residential development currently occurring within the Kyogle Area, a large potential exists for development opportunity in buying land close to the town centre and building low maintenance, brick and tile style of product.

Research Analyst │Aaron Maskrey P (07) 3370 1702 F (07) 3166 0457 E aaronmaskrey@prd.com.au PRDnationwide Kyogle │Principal Robert Horder P (02) 6632 3380 F (02) 6632 3280 E roberthorder@prd.com.au Prepared by PRDnationwide Research. Source: PDS, ABS, DHS, Cordells 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

Kyogle property watch June qtr 2013  

PRDnationwide Research. Kyogle Area Property Watch. First property report of this kind for the Kyogle area.

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