Oatley Area Property Watch Q4 2012
New unit developments in the Kogarah town centre and the Wolli Creek area have posed competition to Oatley Areas apartments, where development has remained limited. To date the spring season has owner-occupiers and investors pursuing a growing number of listings.
Unit activity declined by 34% in the first half of 2012, with 219 transactions recorded for the period. The median unit price closed at $400,000 on the Hurstville side and $476,200 on the Kogarah side, representing a 3.9% increase (Hurstville) and a 7.8% decline (Kogarah) from the 2011 June period. Transactions in the middle and bottom ends of the market were steady, amid a decline in activity toward the top end. The decline in median price for the Kogarah side was the result of softer conditions in the $600,000 plus price bracket.
The unit-to-house sales ratio measures the relationship between unit and house transaction. On the Kogarah side of the three suburbs, the unit-to-house sales ratio climbed above 1.0 for the first time since June 2006, as a result of buoyant unit activity and declining house sales. The opposite was recorded on the Hurstville side, where the index dropped below 1.5 for the first time since 1994, pointing to a sharp decline in unit activity.
August recorded the highest level of stock on the market since the fourth quarter of 2011. The level of units advertised for sale increased despite an overall decline in the combined (house and unit) number of listings. On the bottom end a one bedroom unit in Mortdale was advertised for $439,000, while toward the top end a three bedroom penthouse in Penshurst was offered for $599,999.
The withdrawal of the First Home Owner Grant for existing stock failed to attract buyers in September. However, the $7,000 incentive equated to an insignificant amount compared to the areas house prices. A decline in demand for houses reflected tighter family budgets and the increase in demand for units in the area. The share of detached houses has declined over the past decade, with 47% of the occupied dwellings counted in the recent Census registering as medium density dwellings. Oatley recorded the highest share of houses (73%) and Penshurst the lowest (44%).
House activity declined by 7.3% between the first half of 2011 and first half of 2012. Hurstvilles side declined by 20% while activity on the Kogarah side increased by nine transactions. The weaker activity led to a softer median price easing by 0.8% on the Hurstville side and sliding 3.2% on the Kogarah side.
Observing the house price points on the Kogarah side, a 12 month increase in sales in the middle brackets was noted. Transactions between $700,000 and $899,999 represented 60% of the market, while transactions toward the top and bottom ends of the market declined. On the Hurstville side the moderation in median price was the result of an increase in activity in the lower and middle price points, while activity toward the top end remained largely unchanged.
The level of houses on the market in the Oatley Area has declined in August 2012, compared to the period in 2011. In September 2012 a three bedroom house in Penshurst was advertised for $439,000, while the vendor of a four bedroom Oatley house with views of the river was asking for $1,600,000.
The level of stock available for rent has increased in recent months, resulting in longer vacancy periods. However, rent prices continued to climb in both LGAs in the first half of the year. Landlords who made small adjustments to meet the market often reduced their vacancy periods.
The median rent price for a two bedroom apartment in the Kogarah LGA increased by five per cent in the 12 months to June 2012, closing the period at $420 per week. A smaller increase in the Hurstville LGA led to a median weekly rent of $390. For the same period, the Kogarah Council recorded a 1.8% increase in median rent for a three bedroom house ($560 per week), while Hurstville recorded a strong 7.3% gain ($515 per week).