Port Macquarie Property Watch Q2 2012
Port Macquaries mild climate and affordable housing market has long attracted buyers searching for a lifestyle or sea change. More recently the market has seen demand from local and interstate buyers who are looking to retire in the City or are in the process of upgrading their existing dwelling.
Owners reluctance to meet the market has seen activity decline over the past two years, with the March 2012 half year period recording 322 house sales compared with the long term average of 374 transactions per six month period recorded over the past five years. The figure is also below the 358 sales recorded during the same period in 2011, as a decline in the number of properties offered for sale presents limits buyers selection.
The median price for a house in the coastal city has softened from the highs recorded in the March period in 2011, declining 6.8% to $382,250 in March 2012. However, when a long term view is taken, the median price is in line with the trend recorded over the past 10 years, equating to an average increase of 5.2% per annum. Most houses transacted in the $300,000 to $399,999 price bracket, accounting for 41% of the market. The softer median price is explained by increases in the share of properties transacting below $400,000 and the decline in the portion of properties selling for $700,000 plus, representing four per cent of the market in the March 2012 period compared to eight per cent in the same period in 2011.
The house rental market figures reveal a 12 month increase of 4.3% to a median price of $365 per week for a three bedroom house. The increase signifies the low vacancy in area, buoyed by the demand for rental properties.
The inability of many first home buyers to enter the market is the result of tighter lending criteria, as entering an uncertain market with low equity levels may pose a real threat of negative equity. With banks and other financial institutions not passing on full rate cuts, there is also an uncertainty as to the long term cost of funds. Nevertheless, interest from second home buyers and retirees is evident in the market, with locals as well as residents of regional NSW and Queensland making enquiries. They are attracted to the climate and location of Port Macquarie, and take advantage of the affordable prices to secure their future housing needs. Activity will likely rise as vendors come to terms with softer prices and buyers confidence increases due to a decline in borrowing costs and a reasonably priced market.
The demand for units defied the broader market, with both activity and median price outperforming the house market in the 12 months to March 2012. Port Macquarie recorded a median unit price of $290,000, stemming from the sale of 174 units in the six months to March. The median price declined by 0.5% over the 12 month period, after dipping lower in August 2011. Activity is best represented by the Unit Price Point chart, Illustrating where most units transacted. The picture painted by the chart points to an increase in the share of units selling for $400,000 or less and a decline toward the higher end of the market. The largest number of units (43%) transacted in the $200,000 to $299,999 in March, an increase from 40% in March 2011. Over the same period the $300,000 to $399,999 bracket increased from 23% to 30%, largely as a result of sales in Buller and Gore Streets and Matthew Flinders Drive. All price points above $400,000 declined from March 2011, with the largest decline recorded in the luxury market of units selling for $800,000 plus.
Owners who sold during the six month period to March averaged a capital growth of 1.3% per annum with a holding period of five years and two months. Individual streets that beat the Citys average include Bridge Street (2.9% per annum), Lake Road (3.3% per annum) and Pacific Drive (2.6% per annum).
The median rent for a two bedroom unit closed the March quarter at $245 per week, representing an increase of 2.1% from the March 2011 figures.
The Unit Attributes Matrix graph below provides a summary of the type of product transacting in the 12 months to March 2012. The results show that two bedrooms and one bathroom apartments accounted for almost half (49%) of the units that sold over the period, while larger apartments with three bedrooms and two baths accounted for 27%.