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Fourth Quarter │2012

ASHFIELD LGA Property Watch®

A Victorian house in Bland Street,

Ashfield

MARKET INDICATORS

Change from Last Year Half Year

UNIT SALES

UNIT MEDIAN

UNIT RENTS

HOUSE SALES

HOUSE MEDIAN

HOUSE RENTS

The indicators depicted above are based on the year

ending July 2012. Rental indicators are based on 12

months to June 2012.

KEY HIGHLIGHTS

The development of medium-

density product across the LGA

is increasing and is expected to

account for more than 50% of

dwellings in the next two years.

The rental vacancy rate was

similar the Inner West’s average,

creating a challenging

environment for tenants and

underpinning future growth in

rent prices.

MARKET OVERVIEW

This report is the result of an investigation into the house and unit markets of the

Ashfield Local Government Area (LGA), comprising of the suburbs of Haberfield,

Summer Hill, Ashfield, and parts of Ashbury, Croydon, Croydon Park and

Hurlstone Park.

Units In 2011 units accounted for 49% of all dwellings in the Ashfield LGA, an increase

of seven per cent from 2006. The region is set to pass the 50% mark in the next

two years, with the completion of the Carlton Estate development in Summer Hill

and the Station 2A project near the Ashfield train station. Additionally, 230

development-approved apartments are expected to commence construction over

the next 12 months.

The median unit price eased to $455,000 in July, representing a 4.9% decline on

the July 2011 figure although the five-year average (5.4% per annum) recorded in

the past five years pointed to a stable long term growth. A price point analysis

revealed an increase in the share of units selling toward the bottom end of the

market (less than $400,000) between July 2011 and 2012. Middle price points

contracted, with the $400,000 to $499,999 bracket declining by 7.5% over the 12

month period. Most sales in this price bracket occurred in Ashfield (74% of sales),

with the balance transacting in Summer Hill (16%) and Croydon (8%).

Medium-density dwelling activity continued to soften in the six months to July

2012, with 157 units transacting over the period, although the figure did not

reflect off-the-plan sales in new projects. The level of sales, equating to a 34%

decline from July 2011, was the lowest since January 1990. The share of units is

expected to increase in the next two years as more medium and high-density

developments move into construction phase. However, a number of proposed

apartment projects planned to be built on rezoned industrial sites have to date

met fierce resistance from local residents.

ASHFIELD LGA HOUSE & UNIT SALES CYCLE

Graph prepared by PRDnationwide Research. Source: PDS

181160 158

125 134 121 122 125155 142 157 150

118 120150 142 142 138 136

110 99

410

294328

301263

169

226 226216

172

279 303

266 288

362

300

247 237 238259

157

$865,000

$455,000

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

$1,000,000

0

100

200

300

400

500

600

700

200

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200

3 J

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200

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4 J

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5 J

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2005

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6 J

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7 J

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Half year period

House Sales Unit Sales House Median Unit Median

This report was prepared by PRDnationwide Research. Source: PDS, ABS, Housing NSW, SQM.

PRDnationwide does not give any warranty in relation to the accuracy of the information contained in this report. If you intend to rely upon the information contained herein, you must take note that the information, figures and projections

have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections. PRDnationwide will not be liable for any loss or

damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. Prepared by PRDnationwide Research © All medians and volumes are calculated by PRDnationwide

Research. Use with written permission only. All other responsibilities disclaimed. © 2012

Your home of property knowledge www.prdresearch.com.au

Research Analyst │Oded Reuveni-Etzioni P (02) 9257 0254 E odedetzioni@prd.com.au

PRDnationwide Ashfield │ Principals John Aslanidis / Paul Kapetanellis P (02) 9797 9600 E ashfield@prdnationwide.com

UNIT PRICE POINTS 6 MONTHS TO JULY

Graph prepared by PRDnationwide Research. Source: PDS

The share of houses

in the LGA is

expected to decline as

more medium-density

developments move

into construction

phase

DWELLING STRUCTURE

Graph prepared by PRDnationwide Research. Source: ABS

The House and Unit Capital Growth graph below depicts the average annual

price growth achieved by vendors who exited the market in the past three years.

House growth peaked at an average of 8.8% per annum in July 2010 and

declined since, closing the July 2012 period at 4.8% per annum. Conversely, the

growth for units, averaging 4.2% per annum in July 2009, has increased over the

three years to 8.5% per annum in July 2012. The result points to a growing

demand for high-density dwellings in the inner city LGA, resulting in strong

returns for owners.

ASHFIELD LGA HOUSE & UNIT CAPITAL GROWTH

Houses

The July 2009 peak in house activity was followed by six periods of decline in the

number of transactions. Activity in the July 2012 half year signified a 50% decline

from the 2009 peak and a 27% contraction from July 2011. An increased level of

stock on the market was observed since August 2012, in preparation for the

spring selling season. However, it will remain to be seen if an improvement in

sales prevails, as buyers’ confidence remains low.

The House and Unit Sales Cycle Graph pointed to a decline in Ashfield’s median

house price since January 2010, closing the July 2012 period at $865,000. The

figure represented a 3.8% decline from July 2011, although the five-year average

growth remained positive, with an average increase of 3.9% per annum.

The investment market

Ashfield’s large rental market accounted for 40.1% of dwellings in the LGA

compared with an average of 30.1% for NSW. A long term increase in rent prices

offset some of the declines in capital growth. The median rent of a house

increasing by 51% over the past five years while the median rent for a two

bedroom unit increased by 41%. In 2011 single bedroom units accounted for

11.2% of all dwellings in the LGA, double the state’s rate. Interestingly, the

median rent for a one bedroom unit increased by 52% in the five year period,

overtaking that of a house and a two bedroom unit. In June the median rent price

for a one bedroom unit closed at $350 per week, while a two bedroom unit

recorded a median weekly rent of $420.

Vacancy levels remained low despite an increase since in the past ten months.

The tight September figure of 1.7% was comparable to the Inner West’s average,

creating a competitive environment for tenants and underpinning future growth in

rent prices.

Graph prepared by PRDnationwide Research. Source: PDS

8.5%

4.8%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2009 JUL 2010 JAN 2010 JUL 2011 JAN 2011 JUL 2012 JAN 2012 JUL

Ave

rag

e c

ap

ital g

row

th p

.a.

Half year period

Unit House

0%

10%

20%

30%

40%

50%

60%

70%

80%

2011 2006

8%1%

24%

21%

29.9%

37.4%

27% 28%

12% 13%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 JUL 2011 JUL

At least$600,000

$500,000 to$599,999

$400,000 to$499,999

$300,000 to$399,999

Less than$300,000

7.5% decline in

the 12 months to July 2012