ResearchSecond Quarter 2011

Horsham LGA Market OverviewIN BRIEF

Despite following a national trend of softening sales activity, theHorsham LGA house market recorded a strong median saleprice of $183,750 for the six months ending December 2010.

The Horsham LGA’s vacant land market recorded a mediansale price of $88,000, which was culminated from a total of 49sales throughout the second half of the 2010 calendar year.

ScopeThis report analyses the current trends and performance of theHorsham Local Government Area’s (LGA) house and vacant landmarkets. It further highlights the area’s characteristics anddemographic trends to provide an understanding of the type of realestate product in demand by the local marketestate product in demand by the local market.

Area CharacteristicsLocated in the western part of Victoria, the Horsham LGAencompasses an area of 4,239 square kilometres comprising atotal of 39 suburbs. The suburb of Horsham represents thecommercial hub of the region, which laid claim as Australia’stidiest town in 2001. The continued community pride is evidentthroughout the town, with a vibrant cafe and restaurant precinct,

Horsham LGA House Sales Cycle$200 000300

g pand the reputable Horsham golf course to name just a few of theamenities on offer. The township lies at the intersection of threemajor highways including the Wimmera, the Henty and WesternHighway, which remains the major thoroughfare linking Melbourneto Adelaide.

Horsham LGA House MarketThroughout the second half of 2010, the Horsham house marketf ll d ti id t d f ft i di l i d

$183,750

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followed a nationwide trend of softening median sale prices andheavily reduced sales activity. Closing the 2010 calendar year at amedian sale figure of $183,750, the Horsham LGA house marketmanaged to maintain a small annual increase of 1.5%, despite aslight softening in the latter half of 2010. Observing the longer-termperformance of this market, an average growth rate of 7.4% perannum has been recorded over the past decade.

The median sale price was derived from a total of 108 house Graph Prepared by PRDnationwide Research Source: PDS Live

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transactions throughout the December 2010 six month period, alevel of activity that represents the region’s quietest period in wellover a decade. As an actual figure, the softening sales activityaccounted for a decline of 44% on the regions five year average of191 sales per six month period.

The present nationwide trend of declining sales activity within ourproperty markets can be attributed to a growing degree ofuncertainty within the marketplace. Rising interest rates and the

Horsham LGA House Price PointsDecember 2008 to December 2010

26% 28%30%

29% 31%

9% 9% 9% 13% 10%

3% 2% 3% 3% 4%

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ales $400,000 +uncertainty within the marketplace. Rising interest rates and the

increased cost of living, coupled with recent natural disasters andglobal economic turbulence, has resulted in many potential buyerssitting on their hands waiting for signs of stability.

The price points graph to the right, highlights a plateau that hasoccurred in the median sale price of Horsham’s house market,with no significant shifts in the sale price trend over the past fiveperiods. The $100,000 to $199,999 and $200,000 to $299,999price brackets continue to represent the bulk of market

17% 13% 12% 10% 12%

45% 48%46% 45% 43%

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$300,000 to $399,999

$200,000 to $299,999

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Less than $100,000

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price brackets continue to represent the bulk of markettransactions, recording 42% and 31% of the total salesrespectively throughout the December 2010 six month period. Graph Prepared by PRDnationwide Research Source: PDS Live

2008 DEC 2009 JUN 2009 DEC 2010 JUN 2010 DEC

Half year period

ResearchHorsham LGA House Market (cont.)N t i i l th LGA’ t l b b f H h tt t d

Horsham LGA Vacant Land Sales CycleNot surprisingly, the LGA’s central suburb of Horsham attractedthe bulk of the regions house sales, accounting for 91% of themarket. The remaining 10 sales were dispersed throughout sixneighbouring suburbs.

The primary driver of Horsham’s house market over comingperiods lies in it’s strong rental market, coupled with it’s relativeaffordability of housing product. With only average capitalappreciation expected throughout Australia’s real estate markets

$88,000

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pp p gfor the coming twelve months, Horsham’s strong rental yieldsshould attract the attention of savvy investors and assistmaintaining the region’s strong property prices.

Horsham LGA Vacant Land MarketWith a significant decline in the overall size of Horsham’s vacantland market since 2007, the market’s median sale price hasportrayed a degree of turbulence in recent years. Closing theD b 2010 i th i d t fi f $88 000 th

Graph Prepared by PRDnationwide Research .Source: PDS Live

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December 2010 six month period at a figure of $88,000, themedian sale price recorded an annual spike of 17.8%. However,the longer-term 10 year growth rate of 9.4% per annum portrays amore accurate performance of this market.

The median sale price was achieved from a total of 49 vacant landtransactions throughout December 2010 six month period. Whilethis level of activity represented a 33% decline on the regions fiveyear average of 63 sales, it remains well aligned with general level

Horsham LGA Vacant Land Price PointsDecember 2008 to December 2010

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sy g g gof sales over the most recent three years.

The price points graph to the right further highlights the turbulencethat has been present in Horsham’s median sale price for landover the past five periods. The $50,000 to $99,999 price bracketcontinues to attract the bulk of transactions, accounting for 49% ofthe total sales. Toward the higher end of the market, landachieving sale prices greater than $150,000 accounted for 24% ofsales while the potential to purchase land at sub $50 000 is 16%

39%

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$150,000 to $199,999

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sales, while the potential to purchase land at sub $50,000 isquickly becoming an opportunity of the past.

A Period of Catch Up for Regional VictoriaThe metropolitan suburbs surrounding Melbourne stole themajority of the limelight throughout 2010, leading the nation withstrong median sale price growth and robust sales activity.However, the climate of the real estate market in Victoria haschanged significantly through late 2010 and 2011, with the

Horsham LGA Unit Sales Cycle

Graph Prepared by PRDnationwide Research .Source: PDS Live

8%0%

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$250,00060Number of sales

Mediang g y gfundamentals driving the property market turning in favour ofVictoria’s regional precinct for a period of catch up.

The declining level of consumer confidence resulting from poornational and international economic conditions has resulted in asignificant withdrawal of active buyers throughout Victoria’s realestate market. This quietening throughout the market has tippedthe real estate equation heavily in favour of potential buyers, with alarge amount for buyers to chose from and the ability to demand

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P d b PRD ti id R h S PDS Li F f th d t il t t D O’H ll F hi R h A l t Ph (07) 3026 3383 E il d h ll @ d

large amount for buyers to chose from and the ability to demandvalue for money. With this being the case investors are likely toshift their interest toward the more affordable property markets,offering strong potential for future appreciation along with healthyrental yields.

Graph Prepared by PRDnationwide Research .Source: PDS Live

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Prepared by PRDnationwide Research. Source: PDS Live. For further details contact: Dan O’Halloran, Franchise Research Analyst Ph: (07) 3026 3383 or Email: danohalloran@prd.com.au,PRDnationwide Horsham on (03) 5382 0000, or visit our website at www.prdnationwide.com.au/research.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 varioussources 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 otherinformation 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. © 2011

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