Hastings LGA Property Watch Q1 2011

Scope
This report analyses the current trends and performance of the Hastings LGAs house, unit and vacant land markets.

Area Characteristics
The Hastings LGA is located approximately 300 kilometres north of Sydney and 440 kilometres south of Brisbane, covering a vast area of state forest, national parks, agricultural areas, lakes and mountain ranges. The region is known for its natural beauty, its wineries and beaches. The LGA has one of the most moderate climates in Australia, with temperatures normally ranging between 15 and 30 degrees. Three major hubs exist within the Hastings LGA, with Port Macquarie being the largest tourist destination and regional centre, while Wauchope is the regions agricultural centre. The Port Macquarie airport supports regular flights from Sydney and Brisbane, while the Pacific and Oxley Highways act as the main arterial roads to and from the area. Rail links to Sydney and Brisbane are supported by the North Coast train line.

Rental Market
Rent prices in the Hastings LGA have increased over the past 12 months for both unit and house product. A three bedroom house in the region recorded a median weekly rent of $340 in December 2010, representing a 9.7 per cent increase from December 2009. A two bedroom unit recorded a median rent of $230 per week, equating to a seven per cent increase from 2009. The town of Port Macquarie experienced similar rental growth to that of the LGA, with the median weekly house rent increasing 9.4 per cent to $350 in December 2010.

House Market
The house market in the Hastings LGA experienced an extended period of stagnation after a prolonged period of growth from 2002 to 2004. Growth remained flat for five years before recording new highs in the March 2010 half year, amid a decrease in sales activity. As at September 2010 houses in the LGA recorded a median price of $395,000, representing a 12 month growth of 9.7 per cent from the September 2009 median of $360,000. The five year growth rate was pegged at a lower 2.4 per cent per annum, as a result of the slow market performance between 2004 to 2009. The level of activity has been on a downward trend in the past 12 months and well below the regions five year average. The median price stemmed from 583 house transactions representing a decline of 26 per cent from September 2009, and 10 per cent below the five year average of 647 sales per half year period. Sales in the region were heavily skewed towards Port Macquarie, boasting 59.7 per cent of sales for the period, followed by Wauchope with 7.4 and Bonny Hills accounting for 4.8 per cent of sales.

The house price points graph to the right highlights the trend towards the upper price brackets. Most notable is the shift in the $200,000 to $299,999 price bracket (red), decreasing 30 per cent between September 2009 to March 2010 and maintaining that level through the September 2010 half year. Concurrently, the number of houses selling in the $400,000 to $499,999 bracket (purple), increased 37 per cent during the same period and as at September 2010 accounted for 26 per cent of house transactions in the region. Given the November interest rate rise and lower sales level experienced at the end of 2010 through to the beginning of 2011, it is likely that a shift to the lower price brackets will be registered for the December 2010 and March 2011 quarters. In light of this, markets can expect the median price to remain flat or experience a modest fall in the short term.

Unit Market
According to the latest census data, units represented 10 per cent of dwellings in the LGA, with 83 per cent of units located in the town of Port Macquarie. The median price for units in the LGA remained relatively steady in the past seven years, after a very strong growth period between 2000 to 2004. The region recorded a median unit price of $288,500 as at September 2010, representing annual growth of 8.9 per cent. This is an encouraging short term trend that comes in the face of a more subdued five year average growth rate of 0.7 per cent per annum. The September half year period witnessed lower sales activity, recording 224 unit sales, a 28 per cent decline from the same period in 2009, and an 11 per cent shortfall from an average of 252 sales per six month period recorded over the past five years. Predictably, the majority of unit transactions occurred in Port Macquarie, recording 85 per cent or 191 transactions, with the towns of North Haven and Lake Cathie recording 11 and 8 sales respectively. When analysing the price point distribution, most units transacted within $200,000 to $299,999, accounting for 43 per cent of total transactions. This was followed by the $300,000 to $399,999 price bracket, making up 25 per cent of the market. At the higher end of the market, units selling for $700,000 and above accounted for four per cent of sales, while at the lower end, 11 per cent of units transacted between $100,000 to $199,999.

Vacant Land Market
Land values reached their peak in March 2005 recording a median price of $233,000 before declining to a low of $160,000 in March 2008. The median has been on an upward trend since, recording a figure of $185,000 in September 2010. In the past seven years a sharp decline in activity levels was experienced in the region. The September 2010 half year period recorded 133 sales transactions equating to a 24 per cent decline from September 2009, and significantly lower than the 475 transactions recorded in the March 2002 half year period. A block size analysis revealed that most transactions occurred in the 500 to 750 square metres bracket, followed by the lower bracket of 500 square metres or less and the 1,000 to 10,000 square metres bracket, each accounting for 24 per cent of transactions.