Broome Area Property Watch Q2 2013
The Broome Area property market remains heavily linked with tourism, however an undersupply of dwellings in regional Western Australia has led to an increasingly mobile fly in and fly out residential population of the neighbouring mines. This has resulted in the market being subject to experience the highs and lows of an economy driven by the regional mines. Tourism still plays a substantial role in the market, with the Broome Area maintaining its title as one of the most desired holiday destinations in Western Australia. As a result of this, the property market is tied closely to the seasonal trends of tourism.
The median house price for the annual period ending April 2013 has increased by 2.5 per cent to record a closing median price of $685,000. The minimal peaks and troughs in median house price have continued since the house market peaked in October 2007 at $716,000 due to what can only be indicative that the Broome housing market is currently placed in a price point sweet spot. Due to the size of the market and low number of houses sold on an annual basis, the Broome Area will not see any dramatic shifts in median price in the immediate future. This being said, the Broome Area housing market is one that has remained extremely healthy throughout the economic uncertainty that has transpired over the previous number of years spurred by the Global Financial Crisis (GFC).
Sales activity over the past decade has softened by 7.8 per cent per annum and from the six month period ending April 2008; only 654 sales have been transacted, down 38 per cent on the previous five year period. The location of the majority of transactions has been in Cable Beach with 48 per cent of the house sales, while Djugun (30%) and Broome (20%) form the remainder to shape 98 per cent of the market. Bilingurr only registered fifteen sales over the last five years and therefore only formed two per cent.
The Broome Area has registered the vast majority of its house sales in this aforementioned sweet spot approximately $100,000 either side of the closing median price at Q1 2013. The majority of house transactions were within the $600,000 to $699,999 price bracket accounting for 32 per cent of total sales while the $700,000 to $799,999 bracket formed a further 29 per cent of the market share.
On first glance, the Broome Area unit market looks a volatile one, yet seasonal activity and short term rental opportunities has lead the market to gradually improve prior to registering consecutive six month periods of decline concluding Q1 2013 with a median price of $390,000. The Broome Area unit market is expected to see some growth in the immediate future with a number of multi-family developments expected. Not surprisingly, the suburb that was the most active in the unit market over the previous twelve months has been Cable Beach, which accounted for 75 of the 156 unit transactions, followed by Djugun with 42 sales and Broome with 28 sales.
The Broome Area vacant land market experienced a period of rapid growth in median price over the 2007 calendar year however, unlike the house and unit market, the median price for vacant land declined significantly during the uncertain economic period spurred by the GFC. This being said, it seems that scarcity of available vacant land in the area has assisted in a rapid market correction, which has seen the market return to familiar trend closing the six month period to April 2013 with a median price of $275,000.
Over the past decade the Broome Area market has undergone considerable growth, driven by population increases, influx of mining and tourism investment and the ensuing high demand for vacant land. This growth, despite some inconsistency across the house, unit and vacant land markets is also reflective that the Broome Area now as much as ever is indicating a true reflection of where the market is positioned. It is important to understand that while tourism and the mining sector remain strong and while inventory levels in the Broome Area remain tight we will continue to see a sound residential market.