Clarence Valley Vacant Land Highlight Report Q2 2011

Local Area Characteristics
The Clarence Valley Local Government Area (LGA) is located along the northern coastline of New South Wales and offers a diversified landscape for its residents, from 80 kilometres of beach frontage to the many tributaries into the Clarence River. According to the Australian Bureau of Statistics (ABS) the most recent Estimated Residential Population for the Clarence Valley as at June 2010 was 52,592. This equates to an increase of 1.1 per cent over a twelve month period, the 65 th strongest growth of 152 Local Government Areas in New South Wales. The majority of residents within the Clarence Valley live as a family household (at 71 per cent), while 29 per cent live as a non-family household (sole or shared accommodation). Of the total dwellings just over 86 per cent of dwellings are considered to be a separate house, with six per cent units and five per cent townhouses. A high 47 per cent of all dwellings are fully owned, with a further 28 per cent in the process of being purchased (mortgaged), leaving just 25 per cent of the market available for rent.

The suburb of Grafton is the commercial hub for the regional community within the 2460 postcode. This area is located close to the border of New South Wales and Queensland, 345 kilometres south of Brisbane and 640 kilometres north of Sydney. This locality is easily accessible from the north and south via the Pacific Highway, which runs through the Grafton CBD, while the Gwydir Highway provides access to major road networks and communities inland of Grafton. The region is also serviced by the Grafton Airport, with flights running from selected airports within New South Wales. For the purposes of this report, the Greater Grafton Area encompasses the suburbs located within the 2460 postcode.

Located 60km to the north-east of Grafton, the Greater Yamba Area is famous for its excellent fishing and perfect year round climate, which makes it a popular holiday destination for interstate travellers. The towns are situated on either side of the mouth of the Clarence River and are surrounded by pristine beaches, boasting excellent surfing and camping conditions. To the south of Yamba in the suburb of Angourie , one of the best surf breaks on the eastern sea board can be found, as well as some incredible views of the Yuraygir National Park. For the purpose of this report the Greater Yamba Area includes the suburbs of Yamba, Iluka, Wooloweyah , and Angourie .

Clarence Valley Vacant Land Market
... it signifies that there is a limited amount of quality stock available on the market.
The median price for vacant land has increased steadily in the Clarence Valley over the past six years. The December 2010 half year period has seen the median house price increase four per cent ($6,000) from the corresponding period in 2009, to record a final median price of $155,000. This is just over the five year average growth rate of 3.7 per cent per annum.

The amount of settled transactions over the most recent period have softened from the incentive driven half year ending December 2009 to register 116 sales. This equates to a decrease of 28.8 per cent. This is indicative of current market conditions with consecutive interest rate rises, the surprise November rate rise and the withdrawal of the First Home Owners Boost at the end of 2009 culminating to dampen buyer confidence within the market.

Analysis of the price points revealed the predominance of land sales have fallen within the $100,000 to $199,999 price point, accounting for 60 per cent of settled transactions during the period. This was followed by the sub $100,000 price bracket with 16 per cent of sales. Although it was the $500,000 to $599,999 price bracket that contracted the most (66.7 per cent) from the previous six month period, the Price Points graph shows that it was the $100,000 to $199,999 bracket which experienced the largest decline in actual numbers, decreasing by 25 sales.

The suburb of Grafton recorded the most sales during the December 2010 six month period, with 15 sales. This was followed by Gulmarrad with 12 and Maclean with 11. When compared to the corresponding period of the previous year, Gulmarrad registered 20 sales, South Grafton had 12, while Woombah and Grafton each recorded 11 sales.

Most of the vacant land sales under 50,000m_ were for lots in the 600m_ to 999m_ lot size range, accounting for 22 per cent of the total transactions. This was followed by the 1,000m_ to 1,999m_ size bracket, with 19 per cent of total sales. When compared to the previous year, there has been a significant decline in the amount of transactions in the 50,000m_ size bracket.

Despite the recent contraction of sales within the Clarence Valley, the median price for vacant land has continued to steadily increase. When analysing the sales over the past four years by lot size, it becomes evident that the majority of transactions occur within the 2,000m_ range, with an average of 45 per cent of the market. As the majority of sales occurred in the small lots and median price has continued to increase over time, it signifies that there has been a limited amount of quality stock available on the market.

Greater Grafton Land Market
The December 2010 half year period has seen the median vacant land price increase by only $1,000 from the corresponding period in 2009, to record a final median price of $145,000. However, it was during the recent second half of 2010 that has seen a softening in the median vacant lad price, decreasing by $5,000 in six months. Historically, the Greater Grafton land market has seen an overall trend of an increasing median price, with only temporary fluctuations that are usually remedied within a 12 month period.

Settled transactions over the most recent period have softened considerably from the half year ending December 2009 to register 63 sales. This equates to a softening of 41.1 per cent.

Analysis of the lot sizes sold in Greater Grafton has revealed larger sized lots of land at least 50,000m_ has accounted for the majority of transactions during the December 2010 six month period, with 25 per cent of total sales. This was followed by the more conservative lot range of 600m_ to 999m_ with 24 per cent of total sales.

Due to the market for vacant lots priced above $200,000 rapidly declining, the lions share of sales occurred in the price bracket of $100,000 to $199,999, with 65 per cent of the total sales.

Greater Yamba Land Market
As a result of a small vacant land market located in Greater Yamba, the median price has fluctuated severely. For the December 2010 six month period, the median vacant land price increased by 83.3 per cent to reach $385,000. However, as this median was culminated through only eight settled sales over six months, it does not represent a reputable figure. PRDnationwide Research requires a minimum of 15 transactions to calculate a valid median.

Over the past five years, settled transactions have averaged 21 sales per six month period, with the most recent six month period recording only eight. Analysis of the lot sizes sold in Greater Yamba has revealed that five of the eight sales recorded occurred in the 600m_ to 999m_ range.

Capital growth in vacant land has fluctuated over the past five years, however an underlying trend does appear when looking at the Capital Growth chart. The amount of growth per annum has declined overall from 2005 to 2010, with only sporadic fluctuations. The investors that sold in 2005 realised an average capital growth of 29.1 per cent per annual in Graton and 15 per cent per annum in Yamba. During the most recent December 2010 half year period this amount of capital growth had decreased to 5.9 per cent per annum for Grafton and 6.1 per cent per annum for Yamba.