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Third Quarter │2012

SOUTHERN HIGHLANDS

Property Watch®

MARKET INDICATORS

Change from Last Year Half Year

HOUSE SALES

HOUSE MEDIAN

HOUSE RENTS

LAND SALES

LAND MEDIAN

The indicators depicted above are based on the year

ending May 2012.

KEY HIGHLIGHTS

A rise in the median price for

detached and attached dwellings

transpired over the past three

years amid a decline in activity.

The shortage in working age

population hinders the growth of

the local economy.

The largest number of vacant lots

transacted in the Renwick

subdivision near Mittagong, with

the sale of 77 of the planned 600

blocks since 2011.

WINGECARRIBEE LGA OVERVIEW

The following Property Watch report is the result of an investigation into the

historic and current market conditions of the Wingecarribee Local Government

Area (LGA).

Located 100 kilometres southwest of Sydney, the Wingecarribee Shire Council

has its administrative centre in the town of Moss Vale, with the commercial centre

in Bowral and an industrial core in Mittagong. The Region, also known as the

Southern Highlands has a strong economic base which relies on manufacturing,

agriculture, tourism and retail industries. The position of the Southern Highlands

between Sydney and Canberra has provided businesses access to two of the

nation’s largest markets, with low overheads and access to cheaper industrial

land. The increase in land values over the past decade and tighter economic

conditions have forced businesses to innovate and intensify their operations in

order to remain competitive. According to the latest Census data the Shire’s

population equated to 44,395 residents in August 2011. A look at the different

age brackets revealed a low number of residents in the 20 to 39 age groups and

a high number of residents aged 60 years or over. This shortage in working age

population hinders the growth of the local economy.

Separate houses accounted for 90% of dwellings in the Wingecarribee, and

represented 88% of sales in the six months to May 2012. The House and Land

Sales Cycle graph highlights the decline in house activity since the November

2009 half year, when government stimulus attracted first home buyers to enter

the market. Three years later and first home buyers’ activity has all but

disappeared, with upgraders, downsizers, and the occasional bargain-seeking

investor accounting for most new enquiries. The 395 transaction recorded over

the May 2012 six month period represented a decline of 8% from the same

period in 2011 and a 32% softening from November 2009.

SOUTHERN HIGHLANDS HOUSE & LAND SALES CYCLE

Graph prepared by PRDnationwide Research. Source: PDS

764807 684

621680

504

358 358 388 416 404450

524

377333

450532

487 473425 447

395

361

385

286

219

206

186

108 9293

10989

112

114

7582

100

148

122 129

140 116

79

$425,000

$225,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

0

200

400

600

800

1,000

1,200

1,400

200

1 N

OV

200

2 M

AY

200

2 N

OV

200

3 M

AY

200

3 N

OV

200

4 M

AY

200

4 N

OV

200

5 M

AY

200

5 N

OV

200

6 M

AY

200

6 N

OV

200

7 M

AY

2007

NO

V

200

8 M

AY

2008

NO

V

200

9 M

AY

2009

NO

V

201

0 M

AY

201

0 N

OV

201

1 M

AY

201

1 N

OV

201

2 M

AY

Me

dia

n s

ale

pri

ce

Nu

mb

er

of

sa

les

Half year period

House Sales Land Sales House Median Land Median

This report was prepared by PRDnationwide Research. Source: PDS, ABS, Housing NSW, Wingecarribee Shire Council, Landcom.

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 Moss Vale │ Principal David Stranger │ P (02) 4868 3150 E info@prdmossvale.com.au

HOUSE PRICE POINTS

Chart prepared by PRDnationwide Research. Source: PDS

AGE BRACKETS WINGECARRIBEE AND NSW

Chart prepared by PRDnationwide Research. Source: ABS

UNIT PRICE POINTS

Chart prepared by PRDnationwide Research. Source: PDS

The median house price closed the May period at $425,000, representing a 12

month decline of 10.5% but remaining 12.6% above the lows recorded during the

Financial Crisis of 2008. The growth in sales below $400,000 and the decline in

sales toward the top end of the market led to the softer median price. The largest

share of houses transacted in the $300,000 to $399,999, where the central towns

of Moss Vale, Bowral and Mittagong accounted for most transactions, as did the

village of Bundanoon.

The sales of vacant land in the Southern Highlands followed the same trend as

the house market, with a noticeable decline since 2009. Seventy nine lots

transacted during the May period, representing a 44% drop from the May period

in 2011. Most lots transacted in Renwick, a Landcom subdivision located east of

the Mittagong town centre. Lots in the development have been selling since

2011, with 77 of the planned 600 blocks sold as of May 2012.

Despite a decline in activity over the past three years, sales volumes for medium

density dwellings such as units, townhouses and villas were significantly higher

than during the trough of the Financial Crisis. Demand for low maintenance

dwellings came from the region’s large retiree and ‘tree change’ population. The

supply of ‘over 55’ developments has increased over the past five years, offering

greater choices to those nearing retirement age. An increase in the number of

transactions over the 12 months to May 2012 is linked to the divestment of a

large number of units located south of the Bowral town centre. These

transactions reversed the decline in activity recorded since 2009 and led to a two

per cent increase in the median unit price over the 12 months to May 2012. A

concentration of activity was noticed toward the lower end of the market, with unit

sales below $400,000 increasing from May 2011 to represent 61% of the market.

SOUTHERN HIGHLANDS UNIT SALES CYCLE

Market indicators point to an easing rental market in the first half of 2012. The

median rent price for a three bedroom house in Wingecarribee closed the June

2012 quarter at $350 per week, representing little change from June 2011. For

the same period rents for larger accommodation consisting four bedrooms plus

declined by four per cent to a weekly median price of $450. Conversely, higher

demand for strata-titled accommodation led to an increase of eight per cent from

2011, registering a median price of $250 per week for a two bedroom unit. The

increase in rental accommodation offers greater selection to tenants, but keeps

investors away.

Graph prepared by PRDnationwide Research. Source: PDS

Less than $200,0003% $200,000 to

$299,99914%

$300,000 to$399,999

27%

$400,000 to $499,99918%

$500,000 to$599,999

12%

$600,000 to$699,999

7%

$700,000 to$799,999

6%

At least $800,00013%

0.0% 2.0% 4.0% 6.0% 8.0%

85 years and over

80-84 years

75-79 years

70-74 years

65-69 years

60-64 years

55-59 years

50-54 years

45-49 years

40-44 years

35-39 years

30-34 years

25-29 years

20-24 years

15-19 years

10-14 years

5-9 years

0-4 years

Share of population

NSW Wingecarribee

6368

85

41

60 58

48 49

39 39

5560

64

36

46

39

6468

61

54

76

56

$375,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

0

10

20

30

40

50

60

70

80

90

200

1 N

OV

200

2 M

AY

200

2 N

OV

200

3 M

AY

200

3 N

OV

200

4 M

AY

200

4 N

OV

200

5 M

AY

200

5 N

OV

200

6 M

AY

200

6 N

OV

200

7 M

AY

200

7 N

OV

200

8 M

AY

200

8 N

OV

200

9 M

AY

200

9 N

OV

201

0 M

AY

201

0 N

OV

201

1 M

AY

201

1 N

OV

201

2 M

AY

Me

dia

n s

ale

pri

ce

Nu

mb

er

of

sa

les

Half year period

Number of sales Median

Less than $200,0004%

$200,000 to $299,99925%

$300,000 to $399,99932%

$400,000 to$499,999

21%

$500,000 to$599,999

11%

$600,000 to $699,9995%

At least $800,0002%