Mudgeeraba Area Property Watch Q4 2012
The following Property Watch report is the result of an investigation into the historic and current residential real estate market trends of the Mudgeeraba Area. For the purpose of this report, the Mudgeeraba Area encompasses the suburbs of Worongary, Tallai, Bonogin and Mudgeeraba.
Positive signs for the Mudgeeraba Area house market are beginning to emerge as the market regained traction in the six months to 31 August 2012 to record a total of 176 settlements. Whilst sales volumes remain relatively subdued, the prospects of sustained improvements in the local market look promising, so long as vendors continue to meet the market with their pricing. Confidence in the Gold Coast region property market and a decreased appetite for debt continue to restrict any considerable improvements to sales activity in the area, with the expected recovery to be far less aggressive than in previous upturns.
Competitive mortgage products available to lenders on the back of successive interest rate cuts since November 2011 (interest rate currently at 3.25 as at November 2012) has without doubt contributed to an increase in buyer enquiry for properties in the area, though has failed to translate accordingly to notably stronger conversion rates. Pricing continues to be the overarching factor for active buyers, with houses considered even slightly over priced receiving little to no interest.
A price point analysis undertaken for the house market has highlighted a considerable shift in buyer preference towards more affordable housing options, with the sub $400,000 price range accounting for 25 per cent of total purchases in the August 2012 period compared to 8 per cent in the August 2010 period.
Sliding capital values over recent years has led to increased stock on the market in the sub $400,000 price range which combined with increased activity in the lower price points has resulted in a marked correction to the median house price. The median house price has experienced a softening of 17.8 per cent from the median price peak of $560,000 recorded in the August 2008 period, to record $460,500 in the August 2012 period. The prevailing median price is in fact 5.1 per cent less than the price recorded in the February 2009 period as the market responded to global economic turmoil which continues to hamper renewed confidence in the Gold Coast regions property market.
The Mudgeeraba Area unit market has endured perhaps the toughest year in well over a decade, recording only 41 sales in the August 2012 period. The median unit price fell below $300,000 for the second time in over five years, recording $299,000 for the August 2012 period. Observing the Unit Price Points chart, it is interesting to note the increase in buyer activity in the $600,000 plus price range considering just over half of all purchases were made within the sub $300,000 price range during the August 2012 period. The suburb of Mudgeeraba accounted for 73 per cent of unit sales during this period which includes both unit and townhouse dwelling types.
The Mudgeeraba Area rental market remains flat with little to no movement in price growth across three and four bedroom houses and a marginal fall in three bedroom townhouses. The Mudgeeraba area is predominately owner occupied with less than 15 per cent of total dwellings in each suburb (excluding Mudgeeraba) being rented. The table below highlights the recent performance of each suburb within the greater area with regards to median price movements and sales volumes over the past year.