rown valuation servies final report ase date 1 july 2016 · rown valuation servies final report ase...

CROWN VALUATION SERVICES

FINAL REPORT

BASE DATE 1st July 2016

CITY OF GREATER WOLLONGONG

WOLLONGONG CONTRACT

28th November 2016

Version: Version 1.

Report Prepared For: Land & Property Information.

Report Prepared By: Crown Valuation Service Pty Ltd. 28th November 2016

LOCAL


LOCAL GOVERNMENT AREA OF WOLLONGONG FINAL REPORT

NOVEMBER 2016

EXECUTIVE SUMMARY

City of Wollongong Local Government Area:

The Wollongong City Council area is located on the coast of New South Wales, approximately 80

kilometres to the south of the Sydney Central Business District in the Illawarra Region of New South

Wales. Wollongong City Council has a land area of approximately 684 square kilometres that comprises

a narrow strip of coastal plain, bounded by the Illawarra escarpment to the west and the Pacific Ocean

to the east. The Local Government Area (LGA) is adjoined by three other LGAs - Sutherland Shire Council

to the north, Shellharbour City Council to the south and Wollondilly, Wingecarribee and Campbelltown

Council’s to the west.

Number of properties valued this year and the total land value in dollars:

The City of Wollongong Local Government Area comprises residential, commercial, industrial, rural,

environmental, special uses and public recreation zones.

68,463 properties were valued at the base date of 1 July 2016, and valuations are reflective of the

property market at that time. Previous Notices of Valuation issued to owners for the base date of 1 July

2013. With the exception of the small pockets of rural zoned lands, the Wollongong LGA property

market has remained strong across all sectors with most experiencing steady increases in values. The

LGA is in the later stages of transitioning from a mining and manufacturing driven economy to a service

based economy. Wollongong LGA’s close proximity to Sydney, with its appeal to commuters & location

close to beaches, along with its’ housing affordability in comparison to Sydney, make it a sought after

location for purchasers.

PROPERTIES VALUED AND TOTAL LAND VALUE Valuation changes in the local government area and percentage changes between the council valuation

years of 1 July 2013 and 1 July 2016 and the land tax valuation year of 1 July 2015 are as follows:

ZONE ZONE CODE

NUMBER OF

ENTRIES

2016 TOTAL LAND VALUE

PRIOR ANNUAL VALUATION

(2015)

% CHANGE

PRIOR LGA VALUATION

(2013)

% CHANGE

RESIDENTIAL E4, R1, R2,

R3, R5 62,217 $22,221,147,920 $20,618,634,250 7.77% $17,192,702,350 29.25%

COMMERCIAL B1, B2, B3, B4, B6, B7

2,303 $1,924,680,650 $1,758,483,980 9.45% $1,452,422,019 32.52%

INDUSTRIAL I, IN1, IN2,

IN3, IN4 1,214 $1,137,006,180 $1,055,672,340 7.70% $895,128,492 27.02%

RURAL R, RU1,

RU2, RU4 215 $199,844,710 $191,154,740 4.55% $174,214,900 14.71%

ENVIRONMENTAL E1, E2, E3, 1,103 $426,878,772 $398,093,232 7.23% $357,507,222 19.40%

SPECIAL USES SP1, SP2,

SP3 514 $507,530,231 $480,590,691 5.61% $414,373,651 22.48%

PUBLIC RECREATION

RE1, RE2, W1

897 $309,417,290 $295,456,980 4.72% $256,049,350 20.84%

TOTAL 68,463 $26,726,505,753 $24,798,086,213 7.78% $20,742,397,984 28.85%

LOCAL



NOVEMBER 2016

State and Local Government legislation for Wollongong LGA:

Between 1 July 2015 and August 2016, there were seven amendments to WLEP 2009 (Amendments 21,

23-26, 28 & 30), all of which have been accounted for in our land values. The most amendments are of

a minor nature & relate to individual properties.

The City of Wollongong LGA is governed by Wollongong Local Environmental Plan 2009 (LEP). The plan

is based on the standardised Local Environmental Plan prescribed by New South Wales Legislation.

Market overview and sales of particular interest:

Crown Valuation Services have undertaken significant analysis of Wollongong’s property markets to provide an accurate basis of valuation. In excess of 900 sales have been analysed to support the land values and verification as at 1st July 2016. These analysed sales also support the grading across components.

Analysed sales details are provided to Land and Property Information progressively throughout the year. The added value of improvements is also analysed to enable the accurate deduction of land values from improved sales. Crown Valuation Services undertake this process using the paired sales approach and the replacement cost approach as set out in the LPI Procedure Manual. Sales before or after 1st July are adjusted where necessary to reflect the price as at Base Date.

There has been continued solid demand for residential property in Wollongong LGA in 2016, with high auction clearance rates and price growth evident. Whilst a large number of medium density /mixed use developments are currently being completed within the Wollongong CBD, demand for residential density sites in suburban location remains strong. Generally conditions within the Wollongong commercial market have remained relatively strong during the 2016, with the strongest growth being for property zoned B6, due to its’ mixed use potential. Similarly, the industrial property market has remained steady over the past 12 months with good sales volumes, demonstrating continuing confidence from 2015. As part of an ongoing trend, most industrial sales have been to owner occupiers in the sub $2 million range.

The most notable transactions in the LGA include:

Residential – 17 - 21 Harbour St, Wollongong – 3 lots with existing dwellings sold as a

development site with a DA lodged after settlement for demolition & construction of residential

flat building with 33 apartments over basement parking. Sold for total of $5.6m.

Commercial - 8 Station St, Wollongong – a five level commercial building sold fully leased to the

Department of Defence for $13.6m.

Industrial - 34 Reddalls Rd Kembla Grange – a 14.11ha site sold with a lease in place to Patrick

Autocare for 15 years for car storage for $20.317m.

Summary of significant issues and developments There have not been significant developments or applications for developments outside of those that

are permissible under the current zoning and therefore no special consideration is required. Some of

the district’s most significant development is occurring on a number of the Wollongong CBD’s larger

sized sites.

LOCAL



NOVEMBER 2016

Significant value changes The most significant changes have been substantial increases in values across all sectors of the

residential market, in addition to values of business and industrial zoned properties.

The following is also noted:

One of the strongest sectors of the local market has been for amalgamated sites for the purposes of medium density redevelopment.

Grading of values by a small quantum on low land values showing large % variations.

Strengthening demand for residential / mixed use development land.

Sales of vacant sites in established, older residential areas showing large increases in values.

LPI has been kept informed of such changes to values during regular DV and Contract Managers

Meetings.

Changes since previous General Valuation (2013)

There has been continued strong market growth across all sectors of the Wollongong LGA property

market since Base Date 2013. Whilst the strongest sector of the market has reportedly been the

residential market with growth in land value terms of 29.25% since Base Date 2013, the Commercial &

Industrial sectors showed comparable growth of 32.52% & 27.52% respectively.

This growth is due not only to the “ripple” effect of the booming Sydney property market since 2014,

but the increasing confidence in the local market as the LGA transitions from a largely manufacturing

based economy to a more service and knowledge based economy.

Changes since previous Valuation year (2015)

There has been continued solid demand for residential property in Wollongong LGA in 2016, with high

auction clearance rates and price growth evident. Whilst a large number of medium density /mixed use

developments are currently being completed within the Wollongong CBD, demand for residential

density sites in suburban location remains strong. Generally conditions within the Wollongong

commercial market have remained relatively strong during the 2016, with the strongest growth being

for property zoned B6, due to its’ mixed use potential. Similarly, the industrial property market has

remained steady over the past 12 months with steady sales volumes, demonstrating continuing

confidence from 2015.

Summary of valuation changes to residential land

Overall, 2016 has seen continued market increases across Wollongong LGA, with Knight Frank Research

reporting that Wollongong LGA had had the second highest residential capital growth in Australia with

a 15% annual over in the first quarter of 2016 compared to 2015. Whilst most of the continuing

significant prices rises across Wollongong LGA were for properties affordable for first home buyers and

low end investment property, the higher end of the market, particularly properties over the $1million

mark has also shown strong growth.

LOCAL



NOVEMBER 2016

Changes since previous general valuation (2013)

Strong market growth has been evident in all residential locations since the last general valuation in

2013, and most particularly since early 2014 there has been significant residential price increases across

the entire LGA. Sales volumes peaked in 2014, but have shown decreases of around 10% per annum in

2015 & 2016 as residential demand continues to outstrip supply. Since 2014 agents have continued to

report the ongoing fast turnover of properties & low levels of both rental vacancies and stock to sell,

this coupled with record low interest rates has provided a buoyant market as part of a ripple effect from

the Sydney property boom.

Changes since previous valuation year (2015)

As outlined above, there has been continued strong growth across all sectors of the residential property

market with land values between base dates showing an increase of 7.7%. The 10% fall in sales volumes

between base dates 2015 & 2016 is indicative of the decrease in market supply rather than market

demand.

Summary of valuation changes to commercial land


Wollongong’s commercial land has surged in value in the three years since the last general valuation in

2013. Over this period, commercial land values have increased 32.52%, with almost half of that increase

occurring in the 2015 year alone.


Wollongong’s commercial market remained strong during 2016 after a big improvement during 2015.

The focus and strongest value movement continues to be for properties with good investment

fundamentals as well as those properties with mixed use development potential.

The Wollongong LGA commercial market had approximately 78 sales throughout BD 2015 with 57 of

these sales being market sales. The sales indicate a relatively strong commercial market through both

the CBD and suburban locations. There were a good volume of sales through the Northern Suburbs,

from Fairy Meadow through the Helensburgh, showing good growth in land values. The Southern

suburbs also showed a steady volume of sales and increases in land values, but not at the same levels

as the north. The strongest growth has been for property zoned B6, due to the mixed use potential.

Summary of valuation changes to industrial land


Wollongong’s industrial land has increased substantially in value in the three years since the last general

valuation in 2013. Over this period, industrial land values have increased 27.52%, with a steady increase

in values each year.


The industrial property market has remained steady over the past 12 months with continued good sales

volumes, demonstrating continuing confidence from 2015. Most sales have been to owner occupiers in

LOCAL



NOVEMBER 2016

the sub $2 million range, however investment transactions are starting to increase as investors are

enticed back to the market, having been priced out of the Sydney metropolitan market.

The Wollongong LGA industrial market had approximately 49 sales throughout BD 2016 with 35 of these

sales being market sales. The sales indicate a continuing strong industrial market in the traditional

industrial locations of Port Kembla, Kembla Grange and Unanderra with good sales through the

secondary industrial pockets in Fernhill, Corrimal and Dapto. The strongest growth has been for

properties zoned IN2 and IN3 which are in the traditional industrial locations.

LOCAL



NOVEMBER 2016

Table of Contents

LGA Overview ............................................................................................................................................ 9

State and Local Government Legislation: ................................................................................................ 11

Market Overview and Sales of Interest ................................................................................................... 13

Residential Market .............................................................................................................................. 13

Medium Density Residential Market .................................................................................................. 14

Retail & Commercial Market ............................................................................................................... 15

Industrial Market ................................................................................................................................. 16

Significant Issues and Developments ...................................................................................................... 17

Significant Value changes ........................................................................................................................ 19

Significant value changes – from prior to current annual valuation ................................................... 19

Significant value changes – from prior to current local government council rating valuation........... 19

CVS Quality Assurance Measures ........................................................................................................ 20

LOCAL



NOVEMBER 2016

DISCLAIMER: Purpose of this Report

The purpose of this report is to describe the process and considerations for the 1 July 2016 Valuation of Wollongong LGA. The report has been produced on behalf of the Valuer General. The land values have been specifically made for rating and taxing purposes. Land values produced as part of this process should not be used for any other purpose without the specific agreement of the Valuer General. Land values must have regard to specific requirements and assumptions in rating and taxing legislation. Consequently these valuations may vary from market levels. The land values have been determined using a methodology prescribed by the Rating and Taxing Valuation Procedures Manual. The manual allows mass valuation methodologies that involve assessing large numbers of properties as a group to be utilised where appropriate. Mass valuation methodologies are by their nature likely to be less accurate than individually assessed valuations, however are utilised worldwide for rating and taxing purposes to deliver valuations within an acceptable market range. Town planning, land use and other market information contained in this report has been compiled based on enquires undertaken during the valuation process. Third parties should make their own inquiries into these details and should not rely on the contents of this report. The Valuer General disclaims any liability to any person who acts or omits to act on the basis of the information contained in this report. More information on the valuation process is available from the Land and Property Information website at www.valuergeneral.nsw.gov.au

http://www.valuergeneral.nsw.gov.au/

LOCAL



NOVEMBER 2016

LGA Overview Wollongong Local Government Area (LGA) at a glance:

Population 206,794 (2014 – ABS)

Avg. Annual Growth 2011 -

2016

0.8%

Estimated Avg. Annual

Growth Rate 2016-2021

0.7

%

Area 714 sq.km

Key Industry Sectors Health care and social assistance, Education and training, Retail trade

Main Urban Centres Helensburgh, Thirroul, Corrimal, Wollongong, Figtree, Unanderra,

Warrawong, Dapto

Geography

Wollongong is situated 80km south of the centre of Sydney. Its 714 square kilometre area is set on a

narrow strip of coastal plain, bounded by the Illawarra escarpment to the west and the Pacific Ocean to

the east. Because of its physical limits to the east and west, Wollongong is very much a linear city,

stretching in a thin, virtually unbroken urban line from Helensburgh in the north to the shores of Lake

Illawarra and Windang to the south. There are still some pockets of rural land in the West Dapto area,

which is fast being developed for residential use.

Another of the area’s most valuable natural assets is Port Kembla harbour. It is the deepest port on the

eastern seaboard, providing local and regional industry with excellent export links to the rest of the

world.

Demography

Wollongong has a substantial population base. It is the eleventh largest city in Australia and accounts

for nearly half (46.6%) of the entire population of the Illawarra Region. According to the Australian

Bureau of Statistics, the Wollongong Local Government Area (LGA) had an estimated resident

population of 206,794 (2014 ABS).

Projections by the NSW Department of Urban Affairs and Planning indicate that the population of the

Wollongong LGA will continue to grow at a modest but steady rate through to the year 2021. Medium

level projections suggest that by the year 2021 the region’s population will have reached 206,000

persons, approximately 5.5% growth on the current estimated population. Much of the population

growth is expected to be centred around new residential developments at West Dapto & Calderwood

in Wollongong’s south-west.

Economic Activity

Wollongong has an increasingly diversified economy. The local economy was historically built around a

strong mining industry and the largest integrated steel works in the Southern Hemisphere at Port

Kembla. However, cheaper overseas manufacturing costs and the downturn in coal markets have seen

a continuing reduction in local coal extraction and steel production, resulting in a decline in heavy

industry manufacturing within the Illawarra. Following the ongoing downsizing of the Steelworks and

the more recent restructuring of the area’s industrial base, the Illawarra has looked to growth of existing

LOCAL



NOVEMBER 2016

tertiary industries such as education, I.T. services, tourism and other service sectors to add depth to the

local economy.

Currently manufacturing industry accounts for a modest 4.5% of business locations in the Wollongong

LGA. Key manufacturing sectors in the region include basic metals, fabricated metals (Bluescope),

building products (Pioneer), textiles, and chemical products. Retail trade is another significant

contributor to the Wollongong economy and construction now makes up almost 20% of business in the

LGA.

Traditionally an Industrial & Commercial Centre

Wollongong is without doubt the industrial and commercial heart of the Illawarra Region. Bluescope

Steel Ltd, operates steelworks at Port Kembla with many related heavy industry companies operating in

the area. However as outlined above, the uncertainty of long term steel making operations at Port

Kembla has also had a flow on effect on to smaller local manufacturing companies. Underground coal

mining which has underpinned heavy industry in the region for almost a century, has followed world

trends and declined to the point where the LGA now only has two operational mines, Metropolitan at

Helensburgh & Dendrobium at Mount Kembla.

As a major regional centre, Wollongong offers many services and facilities. Retail trade contributes

significantly to the local economy with 5 department stores, over 60 supermarkets and grocery stores

and in excess of 1400 retail outlets across the LGA. Wollongong City Mall is the major retail centre with

larger shopping centres located at Warrawong, Figtree, Corrimal and Dapto.

The Port of Port Kembla

The port of Port Kembla provides an obvious competitive advantage for industry within the area. Port

Kembla is the only significant bulk port in southern NSW and is Australia’s largest vehicle import facility.

It also has the largest grain handling terminal on the East Coast and has the second largest coal export

facility in NSW. The Port services significant steel, iron ore and bulk product markets and is recognised

as a strategic centre for the broader Illawarra and NSW region.

In the 2013 financial year, Port Kembla handled 4.8 million revenue tonnes of motor vehicle imports

(about 330,280 motor vehicles), 2.6 million tonnes of grain exports, 14.4 million tonnes of coal and coke

exports and 4.2 million tonnes of iron ore imports. Port Kembla’s coal, grain and other bulk trades are

principally handled by rail whilst motor vehicles are moved entirely by road transport.

NSW Ports have stated that there is sufficient land capacity at Port Kembla to meet the incremental

growth needs of current Port users over the next five years. However there is limited land capacity to

accommodate new business opportunities. If demand for additional space arises, or if existing berth

facilities are unable to meet the required shipping task, further land reclamation and berth construction

would need to be undertaken in the Outer Harbour in line with its’ long term strategic master plan.

LOCAL



NOVEMBER 2016

Land Use within the LGA

Of the undeveloped land the most significant use in Wollongong is for Environmental Conservation

purposes, specifically Catchment Protection, as the land west of the escarpment is within the

Metropolitan Water catchment area. The escarpment & adjacent foothills are generally zoned

Environmental Conservation (E2) or National Parks & Nature Reserves (E1). Of the developed areas of

the LGA, the greater percentage of land is used for residential purposes.

Sites developed for single dwelling purposes comprise approximately 95% of residential developed sites.

The thin coastal strip limits the availability of developable land to accommodate the region’s growing

population, growth that is largely driven by its proximity to Sydney and lifestyle opportunities.

Significant urban consolidation is already occurring within the Wollongong City Centre and this will

ultimately need to intensify and expand into other commercial and transport centres within the region.

Multi – dwelling sites, generally defined as three or more dwellings on a site, comprise most of the

remaining 5% of developed sites. Of those multi-dwelling sites most sites comprise low rise unit

developments. High rise development has traditionally been confined to the higher density zoned sites

around Wollongong’s Smith’s Hill and Cliff Road. However, in recent years there has been an increase

in the number of high rise developments either in progress or in the pipeline. Most of these

developments being for mixed use purposes i.e, usually a ground/first floor commercial component with

residential units above. These sites are located within business zonings which provide developers with

more favourable floor space ratios than residential zonings. The Wollongong City Centre LEP gazetted

in 2007, followed by Wollongong LEP 2009 has also provided more favourable floor space ratios within

the Central & Inner City area.

State and Local Government Legislation:

Following the State Government’s planning reforms which included the Standard Instrument (LEPs)

Order 2006 (Standard Instrument) introduced in 2006 requiring Local Councils to introduce standardised

planning instruments, Wollongong LEP 2009 was notified on 26 February, 2010.

This LEP is in accordance with the Standard Instrument & provides:

new zones and land uses;

development standards including lot sizes, building heights, floor space ratios and more; and

a suite of maps that deal with zones, building height, heritage items and heritage conservation

areas, floor space ratios and lot sizes.

Wollongong LEP 2009 repeals and replaces Wollongong City Centre Local Environmental Plan 2007,

Wollongong Local Environmental Plan 1990 and Illawarra Planning Scheme Ordinance. In addition,

Illawarra Regional Environmental Plan No 1 will not apply to the land to which Wollongong LEP 2009

applies. State Environmental Planning Policy No 71 – Coastal Protection does not apply to land within

the Wollongong City Centre. The major changes within the new LEP included revision of some building

height and floor space ratios and spot rezonings. The original 2009 LEP did not apply to land in West

Dapto which was covered by West Dapto LEP 2010, notified on 5 May 2010 (since repealed as an

LOCAL



NOVEMBER 2016

Amendment to LEP 2009 in June 2014). Additionally, Wollongong Local Environmental Plan 1990 and

Wollongong Local Environmental Plan No. 38 continue to apply to certain lands which have been

“deferred” at Marshall Mount & parts of Huntley & Yallah.

The following plans regulate development through land use zones and development standards across

the LGA:

*Wollongong LEP 2009 - controls land use and development in Wollongong It includes a set of land use

zones and provides detailed requirements for development. The LEP also establishes what types of

development may be permitted on a particular parcel of land with the permission of Council.

*Wollongong DCP 2009 - Wollongong’s consolidated Development Control Plan (DCP) outlines planning

controls for the city. This DCP sets out specific controls that apply to development proposals &

combines 89 separate plans in one document. The DCP applies to all development proposals in

Wollongong lodged from Wednesday, 3 March 2010.

*Wollongong Section 94A Development Contributions Plan - determines the requirement for a

development to pay a contribution pursuant to section 94A of the EP&A Act 1979 to assist council to

provide the appropriate public facilities which are required to maintain and enhance amenity and

service delivery within the City. This Plan applies to all land within Wollongong local government area

excluding Stages 1 and 2 of West Dapto Urban Release Area.

*West Dapto Release Area Section 94A Development Contributions Plan - determines the requirement

for a development to pay a contribution pursuant to section 94 of the EP&A Act 1979 towards the

provision, extension or augmentation of public amenities and public services that will, or are likely to be

required as a consequence of development in the West Dapto Release Area. The West Dapto Urban

Release Area Stages 1 and 2.

LOCAL



NOVEMBER 2016

Market Overview and Sales of Interest

Residential Market

As outlined earlier, due to its’ physical limits to the east and west, Wollongong is very much a linear LGA,

stretching in a thin, virtually unbroken urban line from Helensburgh in the north to the shores of Lake

Illawarra and Windang to the south. Most residential development is centred around the LGA’s main

urban centres being: Helensburgh, Thirroul, Corrimal, Wollongong, Figtree, Unanderra, Warrawong and

Dapto. It is noted that the suburbs along the coast in the north between Thirroul and Helensburgh so

favoured by commuters, have become almost dormitory suburbs of Sydney .

Wollongong LGA is an established area of predominantly single dwelling homes with high density

development located in medium and small pockets close to the CBD. There is very little undeveloped

land remaining in most of the older established suburbs, therefore it is demolitions & infill development

that provide most of the supply of residential land for new buildings in these areas. The greatest supply

of developed vacant land is within the West Dapto area, with smaller estates scattered mainly across

Wollongong’s southern suburbs.

The LGA’s close proximity to Sydney is historically a market driver, with its appeal to commuters &

location close to the beach. In the past, the regions ongoing tough labour market conditions & local

economic uncertainty, tempered price growth particularly in Wollongong’s southern suburbs. However,

as the Illawarra continues the transition from a largely manufacturing based economy to a more service

and knowledge based economy, the short term peaks and troughs of the local housing market have

stabilised. Wollongong’s close proximity to the south western Sydney growth area, the new M9 Orbital

& the proposed Badgery’s Creek Airport, are also emerging as additional drivers to a robust residential

market.

Strong market growth has been evident in all residential locations since the last general valuation in

2013, and most particularly since early 2014 there has been significant residential price increases across

the entire LGA. In the twelve months between Base Dates 2015 & 2016, the volume of property sales

has decreased by around 10% as residential demand continues to outstrip supply. Agents report the

ongoing fast turnover of properties & low levels of both rental vacancies and stock to sell, this coupled

with record low interest rates has provided a buoyant market as part of a ripple effect from the Sydney

property boom.

Overall, 2016 has seen continued market increases across Wollongong LGA with Knight Frank Research

reporting that Wollongong LGA had had the second highest residential capital growth in Australia with

a 15% annual over the first quarter of 2016 compared to 2015. Whilst most of the continuing significant

prices rises across Wollongong LGA were for properties affordable for first home buyers and low end

investment property, the higher end of the market, particularly properties over the $1million mark has

also shown strong growth.

The amount of vacant land on the market continues to decline across the Wollongong LGA. Currently,

lands within the Calderwood, Tallawarra & West Dapto area offer the only remaining residential

greenfield sites in the LGA. Currently, the recent Vista Park Estate at Wongawilli & Lynden View Estate

at Kembla Grange account for the bulk of vacant land sales within the West Dapto area. A large

proportion of these sales are house and land packages, attracting mainly first and second homebuyers.

LOCAL



NOVEMBER 2016

In the northern suburbs of Wollongong there are almost no englobo lands left for future development.

The last of such sites being the Bulli Brickworks site, is currently under construction. Once again as in

the southern suburbs, limited sales and resales of vacant residential sites in the northern suburbs have

shown large price increases.

Medium Density Residential Market

Within the Wollongong LGA larger medium density development has been chiefly close to the CBD,

especially within the Smith’s Hill & North Wollongong areas. Most suburban locations support the

development of small, low rise strata complexes and villa sites, which are easier to market and develop.

This class of property is more akin to the single residential market than unit sites.

Wollongong LEP 2009 increased the areas where medium density is permitted through the introduction

of R3 zones. However, unless lot size is sufficient for immediate redevelopment there has been little or

no increases in value of smaller sites. The R3 Medium Density Residential zone is intended for land where

a variety of medium density accommodation is to be established or maintained, particularly close to

transport hubs. Other residential uses (including typically higher or lower density uses) could also be

permitted in the zone where appropriate. A variety of residential uses have been mandated to

encourage housing choice and diversity in this zone.

Following a long period of stalled medium density construction in the Wollongong CBD, there is an

increasing number of new unit developments being offered for sale. Strong demand has seen most units

in larger complexes within the CBD & North Wollongong area selling off the plan, with a marked increase

in the number of overseas buyers. However, whilst sales of units in the CBD have continued to show

steady growth, the large number of units coming online over the next 12-18 months may slow this sector

of the market.

Increased sale prices for existing townhouses and villas are evident throughout the suburbs with little

new stock being constructed or available for sale. Most suburban unit development is smaller scale &

undertaken by local developers, with an emerging trend to selling off the plan. The limited number of

sales of development sites in the suburbs since the 2013 General Valuation, show ongoing strong market

growth. Due to the lack of development sites and the growing demand for units, townhouses & villas,

particularly in the northern suburbs, it is expected that this sector of the market will remain strong.

LOCAL



NOVEMBER 2016

Retail & Commercial Market

The Wollongong LGA comprises approximately 2,300 commercial zoned properties predominantly

located in Wollongong CBD as well as being spread throughout the suburbs from Helensburgh to Yallah.

The Wollongong LGA commercial market had approximately 78 sales throughout BD 2016 with 57 of

these sales being market sales. The sales indicate a relatively strong commercial market through both

the CBD and suburban locations. There were a good volume of sales through the Northern Suburbs,

from Fairy Meadow through to Helensburgh, showing good growth in land values. The Southern

suburbs also showed a steady volume of sales and increases in land values, but not at the same levels

as the north. The strongest growth has been for property zoned B6, due to the mixed use potential.

The rejuvenation of Wollongong CBD continues with major mixed use projects now well under

construction, with the first of the major developments, the former Oxford Tavern site now known as

“Oxford on Crown“ reaching practical completion in July 2016.

The suburban commercial market continues to experience a steady turnover of stock in most

commercial centres, resulting in good increases in values across the board, spurred on by activity within

the CBD and fringe.

Notable transactions in the CBD and suburbs include:

8 Station St, Wollongong – a five level commercial building sold fully leased to the Dept of

Defence and sold $13.6m.

46-50 Underwood St, Corrimal – a vacant site used as a council carpark and sold for

redevelopment as a medical centre / day surgery.

16 Auburn St, Wollongong – a vacant residential development site sold with a DA for 85

residential units.

LOCAL



NOVEMBER 2016

Industrial Market

The Wollongong LGA comprises approximately 1,215 industrial zoned properties predominantly located

in Port Kembla, Kembla Grange and Unanderra, with secondary pockets of industrial zoned land in

Helensburgh, Bulli, Bellambi, Corrimal, Russell Vale, Fernhill, Fairy Meadow, North Wollongong,

Coniston, Cringila, Dapto and Yallah.

The industrial property market has remained steady over the past 12 months with good sales volumes,

demonstrating continuing confidence from 2015. Most sales have been to owner occupiers in the sub

$2 million range, however investment transactions are starting to increase as investors are enticed back

to the market, having been priced out of the Sydney metropolitan market.

The Wollongong LGA industrial market had approximately 49 sales throughout BD 2016 with 35 of these

sales being market sales. The sales indicate a continuing strong industrial market in the traditional

industrial locations of Port Kembla, Kembla Grange and Unanderra with good sales through the

secondary industrial pockets in Fernhill, Corrimal and Dapto. The strongest growth has been for

properties zoned IN2 and IN3 which are in the traditional industrial locations.

Local industry is benefiting from port related activity at Port Kembla with Kembla Grange evolving into

a significant vehicle transportation hub. Transportation and logistics are filling the void left by the

decline of the traditional heavy manufacturing sector, and the confirmation of BlueScope remaining in

at Port Kembla will only improve the confidence of the local industrial market. The expansion of the

Outer Harbour at Port Kembla is continuing with Reclamation Works currently being undertaken.

The evolution of the sector to light industrial uses is expected to continue into the future. Other issues

include the scaling back of production at local coal mines and the restructuring that is expected to

continue at the major mining companies.

Other developments providing confidence in the region include the future use of Port Kembla by cruise

ships, with the first ship expected to dock in late October 2016, and the submission to the Defence

White Paper for the relation or all or part of the Royal Australian Navy Fleet from Garden Island to Port

Kembla.

Notable industrial transactions include:

34 Reddalls Rd Kembla Grange – a 14.11ha site sold with a lease in place to Patrick Autocare for

15 years for car storage and sold for $20.317m.

Canterbury Rd Kembla Grange – a 4.97ha vacant site with a licence for builders waste sold for

$2.25m.

LOCAL



NOVEMBER 2016

Significant Issues and Developments

Wollongong CBD redevelopment sites

As outlined previously, the lower east Crown Street precinct currently appears more like one large

building site, with construction complete on the former Oxford Tavern site for a 14 storey mixed use

development, and construction continuing on the former Dwyer’s site, which is a large scale residential

development comprising 317 residential units in four residential towers.

Since the 2013 General Valuation Wollongong CBD has seen significant redevelopment including:

GPT’s expansion & modernization of the Wollongong Central Shopping Centre with 75 additional

specialty stores, a Coles Supermarket & Target discount department store and over 650 extra car

spaces. Complementing this development is the now complete refurbishment of the Crown Street

frontage and street front improvements delivered by the Inner City Façade program, which saw

40 CBD buildings upgrade their façades over the past two years.

Across the western side of the railway line on Crown Street, within the growing medical precinct

there has been the $134 million expansion of Wollongong Hospital with a new Elective Surgical

Services Centre and an additional 700 spaces added to the carpark. Also, completed in early 2016

has been the $120million private hospital to be operated by Ramsay Health Care with 7 operating

theatres and 60 surgical beds.

During 2016 a number of large scale developments have commenced or been approved within the CBD

and fringe including:

The IRT’s “Parkside” (adjoining their Howard Court development), a $35 million Seniors Living

Development comprising 75 independent living units, car parking, cafe, activity spaces located at

27A Stewart St Wollongong.

• The resubmission of plans for identified key site – “The Gateway” bounded by Flinders, Keira and

Campbell Streets. The four-tower development on Flinders Street includes 221 apartments and

around 10 commercial spaces with units already being sold off the plan.

• Approval has been given for the hole in the ground on Regent St, Wollongong, to be transformed

into a 22-storey, 102 metre tall high-rise building with 151 apartments atop several storeys of

commercial space. The development will be known as “Signature Wollongong “ and will feature a

concierge, outdoor fitness centre, open air theatre, 60 to 70 place childcare centre, jet swimming

pool and resident function centre. The building will also offer 125 apartments, one dual level

penthouse, shops and office space. Construction is expected to commence in 2017 and be

completed within 24 months.

• At the corner of Railway Parade & Rawson St, Wollongong (the former Sam’s warehouse site) a

new 80 metre tower has been approved. The $38 million residential tower will rise from one of the

highest development sites in Wollongong, after the regional planning authority signed off on a new

complex. The development will be 25 stories and comprise 80 apartments, five retail spaces and

parking for 126 cars

LOCAL



NOVEMBER 2016

Current developments or proposals outside the CBD include:

The plan to build 23 bulk fuel storage tanks in Port Kembla harbour was approved in September

2016 by the Department of Planning and Environment. The fuel terminal, to be built by TQ Holdings

at a cost of $172 million, will construct a permanent storage depot holding up to a total of 288

megalitres of fuel.

At Corrimal, three large developments are either underway or awaiting approval. Construction at

the former Council carpark site in Underwood Street for a $9 million medical centre and pharmacy

complex has commenced. Nearby at 20 Underwood Street a private hospital specialising in

chemotherapy is approved, whilst the derelict former hardware building on the corner of

Underwood and Russell Streets remains the subject of a development application for a four storey

development with a ground floor Aldi supermarket, 122 place childcare centre and 49 residential

units.

LOCAL



NOVEMBER 2016

Significant Value changes

Significant value changes – from prior to current annual valuation

Between Base Dates 2015 and 2016 there has been continued strong growth in values across the

residential property sector with steady growth across the commercial and industrial sectors as a result

of record low interest rates, renewed investor confidence and the ripple effect of the booming Sydney

real estate market.

Significant value changes – from prior to current local government council rating valuation

Since the last General Valuation in 2013, residential values across the LGA have consistently shown

annual strong growth. Business and industrial values have shown steady growth overall with marked

strong growth in values during 2015.

Each of these sectors showed the following increases, based on percentage changes for total land values

for the three year period between Base Dates 2013 and 2016:

Residential zoned properties: 29.25%

Commercial zoned properties : 32.52%

Industrial zoned properties: 27.52%

LOCAL



NOVEMBER 2016

CVS Quality Assurance Measures LPI has been provided with a detailed valuation analysis report, which details the quality assurance

process of Crown Valuation Service Pty. Ltd. Contractor and outlines that the verification process and

certifies that land values meet all statistical measures and component data analysis. In addition, a

quality statement and lists of high value and high risk properties is also provided in the valuation analysis

report. Checks have been undertaken to ensure that all properties have been valued, land values are

consistent with each other, land value bases have been correctly determined and all concessions and

allowances have been supplied. Additionally, properties that had land values amended through the

objection or re ascertainment process were individually examined to reconcile surrounding land values

and ensure accuracy of the grading of surrounding land values. Benchmarks and reference benchmarks

are core elements of the quality assurance processes and are identified and individually valued in

accordance with the Rating and Taxing Procedures Manual Version 7.0. Worksheets have been

maintained on all properties where calculations are required. We have also ensured that adjustments

and assumptions within the market analysis have been based on market evidence and have been fully

documented and rationalised.

Author & Contractor Identification

This report has been prepared by and signed by:

Angela Parker

AAPI CPV

Contract Services Manager - Wollongong

28 November 2016

rown valuation servies final report ase date 1 july 2016 · rown valuation servies final report ase...

Documents