Yamanto Area Property Watch Q3 2012

YAMANTO AREA MARKET OVERVIEW

The following Property Watch report is the result of an investigation into the historic and current trends of the Yamanto Area residential real estate market, which encompasses the suburbs of Raceview, Flinders View and Yamanto.

The Yamanto Area house market registered a total of 146 settled transactions in the six months to 30 June 2012, representing a marked increase from the historically low level of activity recorded during the June 2011 period. Affordability continues to underpin a sustained level of demand for housing in the area. A total of five interest rate cuts since November 2011 (official cash rate is currently 3.25 per cent as at October 2012) and greater competition between lenders is transpiring to improved enquiry levels and sales volumes in the current market.

A price point analysis undertaken on house sales over the past three years highlights a notable shift in buyer activity towards the $250,000 to $299,999 price range. The sub $300,000 price range accounted for 37 per cent of total sales in the June 2012 period, compared to 18 per cent in the June 2010 period. Observing the Yamanto Area House Sales Cycle Chart, it can be seen that the median price stabilised during the market downturn in 2008. The introduction of unprecedented stimulus in 2009 induced a wave of competition to the market, boosting sales volumes though ostensibly inflating house prices proportionate to the level of incentive. Since the median price peak of $355,000 recorded in the December 2010 period, the median price has softened an average of 5.3 per cent per annum to $310,000. The median price for the Yamanto Area house market has followed the trend of the wider Ipswich LGA with the correction to prices improving buying conditions and ultimately contributing to steady market growth over the past two years.

Activity in the Yamanto Area vacant land market has turned a corner to register 40 settled transactions during the June 2012 period, two thirds greater than the number recorded during the June 2011 period. The turn in activity corresponds with the fall in the median price since the peak of $189,000 for the June 2011 period. Prices have since taken a dive to record $165,000 for the June 2012 period, representing a marked fall of 12.7 per cent over the year. A price point analysis undertaken on land sales over the past three years indicates that 43 per cent of purchases where in the $200,000 plus price range during the June 2011 period, compared to only 3 per cent in the June 2012 period. Considering the lack of sales recorded during the June 2011, December 2010 and June 2010 periods, the extent of the rise and fall in median price is perhaps misleading. With that being said, the analysis still provides a valid indicator of buyers preference for more affordable land parcels.
It is anticipated that land sales will continue to trend up on the back of the revamped First Home Owners Grant (FHOG) introduced on the 21st of September by the Newman Governments 2012/13 budget. The First Home Owners Construction Grant (FHOCG) extends the existing $7,000 cash hand out for the purchase of any property, to $15,000 exclusively for purchases of new/ off the plan property. A combination of the FHOCG and the reinstatement of transfer duty concessions provides an exceptional saving for first home buyers who are considering building. The availability of competitively priced house and land offerings in the immediate area is likely to be the key draw card to buying new. Already developers are noting an increase in buyer enquiry and have been successfully unloading old stock to bring forward mooted stages in their estates.
With that being said, the removal of the $7,000 is not expected to have a material impact on the established market, at least from a buyers perspective, as vendors will be forced to reprice accordingly to stay competitive. Genuine vendor discounting has hardly been evidenced across the market place, with many vendors opting for longer listing periods and potential vendors waiting for prices to firm before putting their property to market. Therefore, the introduction of the new stimulus will in fact place the necessary pressure on vendors to reconsider their price expectations in order to sell within a reasonable timeframe. If priced correctly and present well, houses in the established market will generally offer better value for money with regards to lot and dwelling size as well as proximity to existing infrastructure, services and amenity.