Casino Property Watch Q2 2012

CASINO MARKET OVERVIEW

The following Property Watch report is the result of an investigation into the
historic and current market trends of the Casino postcode of 2470.
Located in the Northern Rivers Area of New South Wales, Casino lays claim to
being one of Australias largest beef centres. In addition this regional hub is the
service centre for a rich agricultural area. Despite being a rural township, Casino
is well-serviced by Bruxner Highway and Summerland Way while casino is also
situated on the North Coast railway line between Sydney and Brisbane. The
Casino railway station is the terminus of the daily CountryLink Casino from
Sydney and there is also a daily service to and from Brisbane.
The Casino property market in general has contracted over the past five years,
with the number of house sales decreasing to 71 transactions within the six
month period ending March 2012, equating to a fall of 49 per cent from the 10
year average. Observing the House Price Points chart over the March 2012 half
year period, it can be evidenced that a dominant portion of buyers are
entertaining the $250,000 to $299,999 price range, with 32.4 per cent of the total
house sales. Interestingly, this price range recorded a larger portion of activity in
the March 2012 half year period than in the previous four corresponding periods,
while the market for buyers above $350,000 range has contracted by 13 per cent.
The implication this concentration of activity has had on median price growth is
reflected by the acute decrease of 7.5 per cent in the median price recorded for
the 12 month period to March 2012. This equates to a fall of $20,000, registering
a final house median price of $245,000. Preliminary results show the amount of
buyer enquiry to be at its lowest level in five years. However, enquiries are
predominantly from qualified buyers who are knowledgeable of market conditions
and are serious about buying.

The level of stock available for sale portrays a market that is slightly over
supplied. However, currently there is a distinct lack of property appropriately
priced for sale, while those vendors who meet market price are often rewarded by
an increased level of purchasing power when they re-enter the market.

Typically, the Casino vacant land market has averaged a quarter of the total
property sales in a six month period. However, recent changes in to buyer
demand has seen this portion of the market contract to only 16 per cent of total
sales. The overwhelming majority of vacant land sales that transacted over the
first quarter of 2012 did so in the sub $200,000 price range, with 86 per cent of
total sales. Within this price segment, the large portion of sales occurs in the
$100,000 to $149,999 bracket, with an average of 40.5 per cent of vacant land
sales over the past five years. Similar to the house market, the vacant land
median price experienced a decrease of 7.1 per cent over the 12 month period
ending March 2012, resulting in a final price of $130,000. Over the first quarter of
2012, the average price per square metre of vacant land was $86.6, down from
the previous year of $88.4.

A resale analysis was undertaken to ascertain the average annual returns
received by investors who exited the Casino house market over the past ten
years. On the whole, investors who exited the house market in the six month
period ending March 2012 sustained an average annual capital growth of 3.8 per
cent per annum with an average holding period of 6.7 years. The Average Capital
Growth chart demonstrates that houses have typically achieved a higher rate of
capital growth over the past ten years at 12.3 per cent, when compared to most
recent six month period. This growth in capital value has decreased significantly
over the past 12 months, but still remains positive overall.

In this market, potential purchasers are highly informed with easy access to
property information websites, which are similar to the resources professionals
use. These buyers are spending their due diligence researching and have an
understanding of current market prices. Sellers would be wise to appropriately
price their home to meet the current market and showcase its enduring value.