Maitland LGA Property Watch Q2 2013

This report is the result of an investigation into the house and unit markets of the Maitland Local Government Area (LGA). Located in the Hunter Valley, the LGAs property market has historically been buoyed by a strong coal industry, generating employment and demand for new and existing houses. However, a recent decline in coal prices has slowed mining activity and increased market uncertainty. Property investors who bought in anticipation for a steady supply of mining-related tenancies have experienced extended vacancy periods and little growth in rent prices in the past six to nine months.

The impact of softer resource prices has so far mainly affected the rental market, as the median house price continued to grow in the 12 months to March 2013. The decline in house activity in the year to March was mostly due to strong performance in the corresponding 2012 period. The 533 transactions recorded in the six months to March represented a 24 per cent decline from the March 2012 half year but only 10 per cent softening from the five year average. Over the same period strata-titled dwellings activity remained unchanged.

House enquiries came from upgraders and retirees, with some seeking lifestyle lots in the top end of the market. Anecdotal evidence pointed to buyers preferring homes in established suburbs over new land estates. This was seen by the falling stock on the market in existing areas and soft sales activity in many new subdivisions.

The median house price increased by 2.8 per cent in the 12 months to March 2013, closing the period at $370,000. The price recorded solid gains since March 2009, with a short period of consolidation in September 2011. A capital growth analysis conducted by PRD Research measured the annual gains achieved by vendors who sold in the six months to March 2013. The investigation revealed a moderately lower average capital growth of 4.6 per cent per annum compared to 5.0 per cent per annum in March 2012.