Dubbo Property Watch Q3 2013
A house capital growth analysis was conducted to ascertain the gains achieved by vendors who exited the house market in the six months to June 2013. The analysis revealed an average capital growth of 3.9 per cent per annum, compared with 3.3 per cent in the corresponding period in 2012. An average holding period of 6.3 years was recorded between resales.
The level of stock on the market remained limited with 162 houses available for sale in September, equating to approximately three months worth of stock. With that said, several houses remained on the market for prolonged periods, bringing the average days-on-market to 93. Discounting between the advertised and selling price remained modest at 5.5 per cent but afforded buyers room for negotiations.
The house price point chart pointed to an increase in the number of transactions toward the top and bottom ends of the market. The share of sales in the $200,000 or less price segment increased by 12 transactions, while the largest price point of $200,000 to $250,000 recorded 73 transactions compared with 70 sales in the corresponding 2012 period. Toward the top end of the market the share of stock transacting for $400,000 plus increased by 14 transactions or 30 per cent from June 2012.
The investment market, equating to 33.9 per cent of privately held dwelling continued to strengthen through the first half of 2013. Locals and newcomers kept demand for houses and units buoyant, with a visible increase in the median rent of a unit. A 12-month growth of 17.1 per cent brought the median rent price of a two-bedroom unit to $205 per week in June 2013. For the same period the median rent price for a three-bedroom house increased by 7.1 per cent to $300 per week. The rental vacancy rate in Dubbo remained at one per cent in the past two years, confirming a tight market buoyed by the mining and mining-ancillary industries.
Sales of vacant lots recovered since the soft market of 2010. Affordable lots priced below $50,000 were in high demand; these were mostly sold in the Rosewood Estate, while lots in the Delroy Park and Keswick Estates ranged between $100,000 and $149,999. The table below highlighted a strong uptake of lots with an area between 500 and 750 sq m (square metres), while sales of larger lots declined in the first half of 2013 after a sharp rise in 2012.
Unlike houses, the median lot price in Dubbo declined in the 12-month period to June 2013. The decline was closely linked to the rise in sales of smaller lots. Interestingly, the sale of cottage blocks with an area of 500 sq m or less significantly increased in the 12 months to June 2013.
A Vacant Land Vendor analysis highlighted the firm involvement of state and local governments in the Dubbo land market; the state government was responsible for 28 per cent of sales in the first half of 2013, while lots sold by the local council (as a developer) accounted for nine per cent of land transactions. Home builders continued to use a purchase-develop-and-sell system to expedite the sale of their product, with any surplus of undeveloped lots on-sold to the public.