Bendigo Property Watch Q2 2012
Transaction volumes for both houses and units have decreased significantly since late 2010, it should be noted that many other similar regional markets, Ballarat for instance, have seen even larger decreases. The six months to February 2012 saw 696 houses transact, this is 185 fewer (or a 21.0% decrease) than for the same period as at 2011. Unit transactions fell by 33.6% over the same period to 81 transactions.
The six months to February 2012 saw 372 vacant land transactions, which was 11.6% down on the same period for 2011. However the full year to February 2012 saw volumes rise marginally, due to very strong sales levels in the period up to August 2011.
It would appear that the volume decreases are largely due to the general economic uncertainty, as there appear to have been no significant local factors. PRD Bendigo principal Rod Devlin notes that both sellers and buyers are tending to be very conservative, and are taking a wait and see approach. Mr Devlin notes that recent press coverage of Bendigos strong rental price growth, due largely to the shortage of available properties for rent (Bendigos vacancy rate did not rise above 1% in 2011 according to REIV figures), has seen stronger interest from investors outside of the immediate area.
Following the trend in transaction levels, the Bendigo markets price movements have been lower than in previous years, but compare well to other regional Victorian markets, where some negative growth has been seen. The six months to February 2012 saw the median price for houses close at $275,000 up 1.9% on the previous year. Unit prices closed at $225,000 to record a 1.1% increase on the February 2011 figure. Ten year growth rates for houses and units stand at 7.6% and 7.4% respectively, showing the longer term strength of the market, in part underpinned by the aforementioned strength in the rental market.
The house price points table shows a consistent trend towards the higher price brackets over recent years. Sales under $300,000 have shrunk from a dominant 80% of the market in February 2009 to represent 60% of the market for the twelve months to February 2012. One of the strongest growth segments has been the $300,000 to $399,999 bracket, which has more than doubled its share of sales from 13.4% to 27.4% over the same period.
A wide range of price points are seen across the Bendigo market, with an ample supply of land in some of the rural areas. Centrally located properties in Bendigo itself are in high demand, such as the property on a 944m_ allotment in Valentine Street, Bendigo which sold in September 2011 for $900,000.
The median price for vacant land closed the February 2012 six months at $111,250 up 6.0% on the February 2011 close, but down slightly on the August 2011 median of $112,000. The ten year growth rate of 9.5% demonstrates the longer term strength of the market.
There have been some dramatic movements between price brackets in recent periods in the vacant land market. Sales less than $100,000 which held over 60% of the market for the twelve months to February 2009, have almost halved to only 32% of the market as at February 2012. The dominant price bracket is now the $100,000 to $149,999 segment with 51% of all sales occurring within this range. There does seem to be strong capacity for future growth in vacant land values, as Bendigo and Ballarat have similar median prices for houses, and yet Ballarat has a much higher vacant land median price ($143,000 for the six months to December 2011).
Recent land sales have been strong with the Huntly Viewpoint Estate having sold 65% of stage one, the display village soon to commence construction is expected to be the largest seen in the Bendigo area.