Camden Haven Property Watch Q3 2012

Market Overview

This report aims to navigate through the historic and current market conditions of the Camden Haven Area. Located south of Port Macquarie in the Port Macquarie-Hastings Local Government Area, the region acts as a popular holiday destination, albeit with a stable population of owner occupiers. Lower incomes earned by residents have limited growth in property prices over the past eight years with the exception of the 2008-2009 period, when government stimulus enticed first home buyers and upgraders to enter the market.

The Areas Sales Cycle graph reveals softening median house and unit prices in the past three years, compared to the preceding period. This is attributed to the waning of government stimulus and subdued economic conditions in the regional parts of the state that are not supported by the mining industry. Activity peaked in the October 2009 period and declined by 25% since. The fall in activity over the past three years has been linked to the disappearance of first home buyers and the increase in the number of cautious purchasers. Attuned to the state of the housing market, these buyers are factoring in the risk of potential falls in capital values.

Observing the House Price Point chart over the April 2012 half year period, it is evident that a dominant concentration of buyers existed in the $300,000 to $399,999 price range. Interestingly, this price range contracted from the corresponding period in 2011, along with most other price points. The only price point to experience real expansion was in the $200,000 to $299,999 bracket, growing by 14% over the 12 month period. The implication of this concentration in activity is reflected in the lower median price, declining by 8.9% to $360,000 in the 12 months to April 2012. The softer median price tracked a small decline in house activity in the April six month period over the past three years, with the latest April half year recording 131 settled transactions.
The private rental market represented 20% of dwellings in the Camden Haven Area over the past ten years. The market continued to strengthen in the 12 months to June 2012, with the median weekly rental price of a house increasing by 9% to $360 per week. The Weekly Rent Price Point chart confirms the shift in rental prices, with the proportion of households paying between $150 and $199 per week declining from 34% in 2001 to 14% in 2011, while the $275 to $349 bracket increased from 1% in 2001 to represent 25% of the rental market in 2011.
A small attached dwelling market exists in the Area, with villas and townhouses representing 11% of the total dwelling stock. This market averaged 25 transactions per six month period over the past five years, with the April 2012 period recording 23 sales. Observing two of the Areas largest suburbs, the beachfront town of Lake Cathie declined from ten transactions in April 2011 to four in 2012, while sales in the inland village of Laurieton rose from six in 2011 to ten in 2012. The selling period, equating to an average of 196 days in Laurieton and Lake Cathie, indicates weak demand for units in the Area. With a competing stock of three bedroom houses proving attractive to the majority of buyers, the sales of strata-titled dwellings are likely to remain subdued in the next 12 months.

The growth of properties is best measured through the capital gains achieved by individual vendors over a period. A house resale analysis carried out by PRD Research revealed an average capital gain of 4.5% per annum for vendors who exited the market between November 2011 and April 2012. This figure reflects the slower market of 2011 and 2012, compared to an average of 6.8% per annum in April 2010. The latest figures are in line with current estimates, predicting future gains to be closely aligned with a 3% to 4% per annum growth in wages.
The House Sales table lists the most active suburbs in the Area. It demonstrates the difference in house activity, with softer prices and an uneven growth in transaction volumes between the suburbs. The suburb of Bonny Hills stands out as the only one to record growth in both median price and activity in the 12 months to April 2012. This is likely the result of new home sales at high price points; however a high level of competing stock for sale maintains downward pressure on individual house prices.

The Camden Haven property market is likely to benefit from stability in the Australian economy and certainty regarding the future impact of government initiatives. Despite a softer outlook for attached dwellings, the stability in the house market over the past eight years represents solid investment for owner occupiers. It has transpired that in the current market vendors with realistic price expectations and well-presented properties will be more likely to experience shorter selling periods.