28 November, 2021
Rising house prices
The Central West hasn’t been left out of the regional housing price boom of the past 18 months, but experts are warning against the risk of overpaying.
Hayden Whiteman, assistant agent at MH Thomas and Gilgandra Real Estate, said the price growth in the past year has been significant for Gilgandra with the median house price currently $196,300 up from $160,000 a year ago.
Jason Hartin, manager and auctioneer at Hartin Schute Bell, says Narromine has seen a 20 to 25 per cent increase over the past three years.
“Median house price three years ago was $250,000, now you’re looking at $300,000.”
Nyngan has also experienced similar growth with the median house price currently $175,250 up from $135,000 last year, according to data from realestate.com.au.
Mr Whiteman highlighted the surge in prices has also been accompanied by lower vacancy rates for rental properties.
In June 2019, during the drought, the Central West had a vacancy rate of 6.6 per cent but the latest vacancy rate for October is 0.6 per cent.
“As prices increase, people trying to get their foot in the market are being pushed further and further away from cities and regional centres,” explained Mr Whiteman.
He said another contributing factor to the high prices and low vacancy rates was that a lot of people who’d either grown up in area and moved away seem to be returning.
Mr Hartin believed more people wanting a rural country lifestyle was the most significant factor driving prices up.
Mr Whiteman said in Gilgandra there was a lack of blocks of land available for sale for people to build a house on.
Bridgette Caton, property sales and rental agent at Richardson and Sinclair in Nyngan, told the Nyngan Weekly last week that buyers were having more success across town than renters, with wait lists not having decreased in the past six months.
“There’s so much work on at the moment, everyone is employing more people and there are just no properties,” said Ms Caton.
Pete Wargent, co-founder of BuyersBuyers, a national network of property buyer’s agents, says buyers should beware of the risk of overpaying in regional areas, particularly for low-grade properties at this stage in the market cycle.
“Many regional markets have experienced a huge boom in prices over the past 18 months, and buyers need to recognise that these conditions can’t be sustained once the borders reopen, and as new migrants inevitably gravitate towards the capital cities,” said Mr Wargent.
“A property boom cannot dispel
the risk of capital losses, as we have seen at the peak of previous market
cycles. It may seem hard to imagine in the current market conditions, but even
in prime markets such as Noosa, we saw half a decade of poor property price
performance following the onset of the financial crisis.”
“Investors this time around have been less drawn into regional markets for the yield due to lower mortgage rates and lower out of pocket expenses, but still this is not a time to be tempted by apparently high yielding regional investments, which usually come with a commensurate level of risk,” said Mr Wargent.