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Final Report 2015
Lake Macquarie City Local Government Area
(004)
Submitted: November 5 2015
Preston Rowe Paterson Final Report
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Table of Contents
1 Executive Summary ............................................................................................................................. 2
1.1 LGA Overview 2 1.2 State & Local Government Legislation for Lake Macquarie City Council LGA 3 1.3 Market Overview and Sales of Particular Interest 3 1.4 Significant Issues and Developments 3 1.5 Significant Value Changes 5
1.5.1 Summary of Valuation Changes to Residential Land 5 1.5.2 Summary of Valuation Changes to Industrial Land 5 1.5.3 Summary of Valuation Changes to Commercial Land 5 1.5.4 Summary of Valuation Changes to Rural Land 6
2 Disclaimer – Purpose of this Report .................................................................................................. 7 3 LGA Overview ...................................................................................................................................... 7
3.1 Location of the District 7 3.2 Principal Towns 7 3.3 Main Industries 9 3.4 Significant Retail Centres 9 3.5 Types of Residential Development 10
4 State & Local Government Legislation for LGA ........................................................................... 10 5 Market Overview and Sales of Particular Interest ....................................................................... 12 6 Significant Issues and Developments ............................................................................................ 30
6.1 Significant Developments – From Prior to Current Annual Valuation 30 6.2 Significant Developments – From Prior to Current Local Government Council
Rating Valuation 31 7 Significant Value Changes .............................................................................................................. 33
7.1 Significant Value Changes – From Prior to Current Annual Valuation 33 7.2 Significant Value Changes – From Prior to Current Local Government Council
Rating Valuation 35 8 Overview of the Quality Assurance Process ................................................................................ 35
Preston Rowe Paterson Final Report
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1 Executive Summary
1.1 LGA Overview
The Lake Macquarie City Council area is located in the Hunter Region of New South Wales, only 90
kilometres north of Sydney. It is conveniently located 20 minutes from the Newcastle CBD and 40
minutes to the Hunter Valley Wine Country. The Lake Macquarie City LGA has a total land area of
787.4 km². It connects with Newcastle City LGA in the north, Wyong Council LGA in the south, and
Cessnock in the west.
Lake Macquarie City Council is home to one of the biggest salt water lakes in Australia with a
circumference of 174km and about twice the size of Sydney Harbour. To the east there is 11km of
coastline with four patrolled beaches. To the west is the Watagan Mountains incorporating 13
forests.
Lake Macquarie is a desirable place to live and work and it is the fastest growing city in the Hunter
and one of the largest cities in NSW. It accounts for 36% of the Lower Hunter population.
78,707 properties were valued this year with a total land value of $22,307,322,977.
The Lake Macquarie City Council LGA comprises Residential, Rural, Commercial, Industrial,
Infrastructure, Environmental, Waterways and Public and Private Recreation zones.
78,707 properties were valued at the Base Date of 1 July 2015, and valuations are reflective of the
property market at that time. Previous Notices of Valuation issued to owners for the Base Date of 1
July 2013.
The Lake Macquarie City LGA property market has experienced increases in values broadly across
all sectors aside from Protection and Recreation zones (which only comprise less than 1% of total
LGA property value). Total land values increased by around 12% in Base Year 2015 and an overall
rise of around 19% since the last General Valuation Year.
Residential land has been the strongest market segment, increasing by around 13% in base year
2015 and overall by 21% over the two years since the 2013 General Valuation Year. Business zoned
land has also performed well, rising by almost 5% in 2015 and overall 9% over the past two years.
The next best performing segment was Non-urban which increased by 10% over the past year and
around 18% over the past two years.
Valuation changes in the LGA and percentage changes between the Council Valuation years of 1
July 2013 and 1 July 2015 and the Land Tax Valuation year of 2014 are as follows:
Preston Rowe Paterson Final Report
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Zone Zone Code
Number of
Entries
2015 Total Land
Values
Prior Annual
Valuation (2014)
%
Change
Prior Local
Government
Valuation (2013)
%
Change
Residential R1, R2, R3 70,253 19,251,778,361$ 17,014,048,428$ 13% 15,950,046,827$ 21%
Rural
RU2, RU3, RU4,
RU6, R 1,460 607,760,540$ 551,349,150$ 10% 514,749,510$ 18%
Commercial B1, B2, B3, B4, B7 2,074 1,091,742,626$ 1,005,945,820$ 9% 970,742,430$ 12%
Industrial IN1, IN2, IN4 845 436,953,830$ 414,533,110$ 5% 412,211,330$ 6%
Infrastructure SP1, SP2, SP3 496 153,455,874$ 149,533,754$ 3% 151,206,324$ 1%
Environmental E1, E2, E3, E4 2,085 607,031,735$ 580,617,442$ 5% 557,396,581$ 9%
Public Recreation RE1, RE2 1,266 140,030,961$ 141,758,027$ -1% 138,136,150$ 1%
Waterways W1 191 3,105,600$ 3,105,600$ 0% 3,063,100$ 1%
Undetermined/Z
one change
/Village Z 33 14,625,950$ 14,626,949$ 0% 14,265,949$ 3%
Protection P 2 573,000$ 573,000$ 0% 593,000$ -3%
Open Space O 2 264,500$ 253,800$ 4% 250,000$ 6%
Totals 78,707 22,307,322,977$ 19,876,345,080$ 12% 18,712,661,201$ 19%
Properties Valued and Total Land Value
1.2 State & Local Government Legislation for Lake Macquarie City Council LGA
Lake Macquarie Local Environmental Plan 2014 gazetted on 12 September 2014 with
commencement 28 days after gazettal, on 10 October 2014. There has been seven (7)
amendments since the previous valuation.
All zone and value changes have been accounted for in the final values.
The Lake Macquarie City Council is governed by the Lake Macquarie Local Environmental Plan
2004 and the Lake Macquarie Local Environmental Plan 2014. The LEP 2014 is based on the
standardised Local Environmental Plan prescribed by the New South Wales Legislation.
1.3 Market Overview and Sales of Particular Interest
Preston Rowe Paterson Newcastle & Central Coast (PRP) have undertaken significant analysis of
the Lake Macquarie City Council district property market to provide an accurate and reliable basis
of valuation. 1,542 sales have been analysed to enable the establishment and verification of land
values as at 1 July 2015. These analysed sales also support the grading across components.
Analysed sales reports are provided to Land and Property Information on a consistent basis
throughout the year. The added value of improvements are also analysed to enable the accurate
deduction of land values. PRP undertakes this process using the Paired Sales Approach and the
Replacement Cost Approach.
In analysing sales before or after 1 July it is sometimes necessary to adjust the contract price in
terms of market movement, depending upon particular market segment activity. In the Lake
Macquarie City LGA this year, sales and resales of residential zoned properties generally indicated
increasing values throughout the year. Rental and commercial rental analysis demonstrated a
similar trend, although the latter category is particularly difficult to interpret definitively due to lower
levels of evidence amongst highly varied properties and lease conditions.
1.4 Significant Issues and Developments
Boolaroo Industrial Area
The Boolaroo industrial area has had a further reduction in land value at the end of Munibung
Road where vacant land sales during 2015 have provided evidence of further reductions in land
value due to contamination’/electricity easements etc.
Preston Rowe Paterson Final Report
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Wyee Residential – Amendment 61
Comprises allotments known as the Wyee West Paper Subdivision which were rezoned from rural to
residential when Amendment 61 to the Lake Macquarie LEP was undertaken.
Following the rezoning there has been a significant number of speculative purchases within the
area.
Waterfront/Waterfront Reserve Allotments Lake Macquarie
There was a significant variation in factors applied throughout the waterfront components within
Lake Macquarie. Whilst land values increased overall by just over 7% for the period this was not a
homogenous increase.
Variations reflect the disparities in amenity, water access, locality demographics, previous land
value movements, accessibility and allotment aspect.
Beaches at Catherine Hill Bay
Rosecorp’s development Beaches at Catherine Hill Bay has been selling fast with 85% of the off the
plan lots sold for Releases 1, 2 and 4. 250 lots out of 294 have now sold with prices ranging from high
$200,000s up to low $600,000s.
Trinity Point
Trinity Point is a residential and commercial estate located on the shores of Lake Macquarie.
Stages 1-4 of the residential subdivision are completed and Johnson Property Group have approval
to develop the remaining stages of 98 residential lots and 23 medium density housing.
Belle Apartments Development
The $35 million Belle Apartments development at Belmont is nearing completion. The development
will comprise ground level retail shops with 110 1, 2 and 3 bedroom apartments over four levels
above.
Vivid Apartments Development
The seven storey Vivid Apartment development has commenced construction at Charlestown.
Comprising of apartments and retail space, this development is within walking distance to the
popular Charlestown Square.
Waterview Apartments Project
Ten years after it was first approved, the Waterview Apartments project is set to resume building.
This significant project has been waiting for the right time to be released. Waterview will comprise
four three storey buildings on the corner of Victoria and Walter Streets with views of Belmont Bay.
Lead Abatement Strategy Areas (LAS)
The lead contamination issues in the Boolaroo, Argenton and Speers Point area from the former
Pasminco Aluminium Smelter continue to receive high media coverage. Following discussion with
our District Valuer it was decided that the best way to manage the LAS areas would be to group
them into R2 and R3 specific components. This required identification of the affected properties
and changes to four components.
Preston Rowe Paterson Final Report
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LEP Conversion and Amendments
The new standardised Local Environmental Plan for Lake Macquarie was gazetted on 12
September 2014 with commencement from 10 October 2014. Since the introduction of the LEP we
have successfully managed seven amendments, several which have required the rezoning of a
large number of properties.
Little Pelican – Component EXX
Component EXX is used to accommodate just 5 entries that are all the same defined size of about
148.8sq.m. All entries are waterfront land facing the Swansea Channel within Lake Macquarie.
All of the land is reclaimed swampland located on Crown Land, with individuals given tenure
through long term permissive occupancies. These entries are interesting in that they are both
14G/14I Basis; being both heritage listed and permissive occupancies over Crown land.
1.5 Significant Value Changes
1.5.1 Summary of Valuation Changes to Residential Land
Changes since previous General Valuation (2013)
In Lake Macquarie LGA, residential zoned land has increased by 21% over the two year period
since the last General Valuation Year. The residential property market has seen a strong upswing
and sustained period of demand over the past two years.
Changes since previous Valuation Year (2014)
Of the two year increase outlined above, 13% has been recorded during the previous base year.
The upswing described above has gathered momentum over the past 12 months in particular as
confidence in the market has consolidated. Of the 137 residential zoned components, 133
recorded increases during the past 12 months with the most significant being the Toronto, Fennell
Bay, Blackalls Park and Fassifern areas which increased by approximately 25 – 29%. Only one
component (WFQ) comprising waterfront lands recorded a fall in values. This property class has not
experienced the same level of demand as the broader residential market.
1.5.2 Summary of Valuation Changes to Industrial Land
Changes since previous General Valuation (2013)
In Lake Macquarie LGA industrial zoned land has increased by 6% over the two year period since
the last General Valuation year. The industrial property market has shown stability and slight
upward movement in value with demand increasing over the past 2 years.
Changes since previous Valuation Year (2014)
Of the two year increase outlined above, 5% was recorded during the previous base year.
Confidence in the industrial sector has increased more strongly over the past 12 months. Of the 13
industrial zoned components, all recorded increases during the past 12 months with the most
significant being ISE Edgeworth which increased by 7%, ISG Cardiff/Boolaroo and ISK Toronto.
1.5.3 Summary of Valuation Changes to Commercial Land
Changes since previous General Valuation (2013)
In Lake Macquarie LGA, commercial zoned land has increased by 12% over the two year period
since the last General Valuation Year. The commercial property market has seen a moderate
upswing and sustained period of demand over the past two years.
Preston Rowe Paterson Final Report
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Changes since previous Valuation Year (2014)
Of the two year increase outlined above, 9% has been recorded during the previous Base Year.
The upswing described above has gathered momentum over the past 12 months in particular as
confidence in the market has consolidated. All the 16 commercial zoned components, recorded
increases during the past 12 months.
1.5.4 Summary of Valuation Changes to Rural Land
Changes since previous General Valuation (2013)
In Lake Macquarie LGA, rural zoned land has increased by 18% over the two year period since the
last General Valuation Year. The rural property market has seen a moderate upswing and
sustained period of demand over the past two years
Changes since previous Valuation Year (2014)
Of the two year increase outlined above, 10% has been recorded during the previous Base Year.
The upswing described above has gathered momentum over the past 12 months in particular as
confidence in the market has consolidated. Most of the rural zoned components, recorded
increases during the past 12 months except for 3 components which held steady and the small
component EXX Permissive Occupations Pelican which was regraded down.
Preston Rowe Paterson Final Report
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2 Disclaimer – Purpose of this Report
The purpose of this report is to describe the process and considerations for the 1 July 2015 Valuation
of Lake Macquarie City Council Local Government Area. 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 enquiries 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.lpi.nsw.gov.au/valuation.
3 LGA Overview
3.1 Location of the District
The Lake Macquarie City Council area is located on the east coast of Australia in the Hunter
Region of New South Wales. It is only 60 minutes to Sydney on the M1, 10 minutes to Newcastle, 25
minutes to the Port of Newcastle, 35 minutes to Hunter Valley wine country and 40 minutes to
Newcastle Airport.
The Lake Macquarie City LGA has a total land area of 787.4km². It connects with Newcastle City
LGA in the north, Wyong Council LGA in the south, and Cessnock in the west.
3.2 Principal Towns
The centrepiece of the Lake Macquarie district is a lake about twice the size of Sydney Harbour,
recognised as one of the largest coastal saltwater lakes in Australia. Around the lake and along
the coastline are relaxed town centres and villages.
Town centres are located at Swansea, Belmont, Charlestown, Cardiff, Glendale, Warners Bay,
Mount Hutton, Toronto, and Morisset.
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Swansea is the southern entrance to the city. With a population of 4,638, it is situated in a unique
and beautiful location, boasting both lakeside and beach living. The commercial centre has 98
operating businesses with Coles, Woolworths and McDonalds being the major businesses.
Belmont is the major service centre for the east of the lake offering a diverse range of retail,
financial and professional services. With a population of 6,476, Belmont is the sailing capital of the
Hunter. The commercial centre has 246 businesses operating and provides services to more than
50,000 residents of Lake Macquarie. Major businesses include Coles, Woolworths and Aldi.
Charlestown Is the central business district of Lake Macquarie and a prominent major regional
centre characterised by the Charlestown Square retail shopping centre. New high-rise
development and major bus interchange adds to the diverse business mix of retail, entertainment
and business services. Major businesses include Myer, Target, Coles, Woolworths, Big W, Rebel Sport,
Centrelink Regional Office, Department of Housing, Reading and Hoyts Cinema Complexes with
476 businesses operating in the commercial centre. Charlestown boasts a population of 11,725.
Cardiff is renowned for outstanding manufacturing industries, automotive sales and support services
and is a significant employment area that supports approximately 15,000 jobs. The Cardiff Industrial
Park is home to many leading manufacturers. The commercial centre houses 107 businesses with
Woolworths, Aldi and Bi-Low being the major businesses. Cardiff is conveniently located on the
main northern rail link and is serviced by public transport. The population of Cardiff is 5,796.
Warners Bay has a main street which is opposite the lake providing a vibrant and cosmopolitan feel
to the centre. The suburb boasts superior housing, a strong retail sector, and the Lake Macquarie
Performing Arts Centre. The nearby Hillsborough Road Industrial Precinct services the homemaker
market and specialist manufacturing. In the commercial centre there are 139 businesses
operating, including restaurants and cafes that support the relaxed lifestyle. Home to a population
of 7,009 Warners Bay is a popular suburb with residents and visitors.
Mount Hutton is a large village centre conveniently located for surrounding suburbs. Lake
Macquarie Fair, Mount Hutton’s retail centre, contains two supermarkets, one major discount
department store and over 55 speciality stores. Major businesses include Coles, Woolworths, Big W
and Best and Less. Mount Hutton offers it population of 3,107 an affordable lifestyle that is central
to many of the city’s facilities.
Glendale provides excellent facilities and a commercial centre that is fast becoming the logistics
services and transport hub of the city. It successfully combines industrial and commercial property
with residential and recreational areas. Glendale is home to Stockland Glendale, an eight-screen
cinema complex and the Hunter Sports Centre, which offers world-class facilities. Ninety four
businesses operating in the commercial centre including Woolworths, Target, Coles, Kmart, JB Hi-Fi
and Bunnings Hardware. Glendale has a population of 2,997.
Toronto is just 10 minutes from the M1 Motorway and a perfect location for business to service the
Central Coast, Newcastle and the wider Hunter region. With 210 businesses operating it is the
commercial hub of western Lake Macquarie. Major businesses include Woolworths, Coles, and Aldi
Toronto offers its residents a beautiful relaxing and safe lakeside community. Toronto is home to
5,161 people.
Morisset is designated as an emerging regional centre, with population projections indicating a
doubling of population over the next 25 years. Conveniently located on the main north rail link,
Morisset is only 60 minutes by the M1 Motorway to Sydney’s northern suburbs. Morisset is the major
commercial and retail centre of southern Lake Macquarie, complimented by a large industrial park
and manufacturing industries. The commercial centre has 114 businesses operating, including
Coles, Woolworths, Bunnings and Sanitarium Health Foods. Morisset is nestled between the
Watagan Ranges and the lake and has a population of 3,108 residents.
Preston Rowe Paterson Final Report
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3.3 Main Industries
Lake Macquarie’s economic strength is built upon its diverse landscape and natural resource base,
with key industries developing out of timber, agriculture, water and minerals.1
Manufacturing and Engineering
Development of industrial lands, investment in major roads and freight rail infrastructure, new
research and development facilities, skills development and training and the rollout of the National
Broadband Network are together paving a dynamic future for manufacturing and engineering in
Lake Macquarie City. With close to 15,000 people employed locally in advanced manufacturing,
this technology driven industry sector is recognised as a significant provider of jobs in the city.2
Retail and Commercial
The City has 10 town centres serving as hubs for the local communities that circle Lake Macquarie.
Each of these centres has its own uniquely identifiable and community-based retail and
commercial precincts. Geographic dispersal makes each independently viable and successful,
and facilities access to economically and socially diverse markets around the Lake.
In addition to the town centres is the City’s hub for commercial and retail activities, Charlestown.
Home to GPT’s $840 million major regional shopping centre, Charlestown Square, as well as a
significant number of commercial and mixed-used developments.3
Tourism
Lake Macquarie is blessed with an abundance of natural beauty. Nature-based tourism, from
beach, to lake, to forest, is supported by a range of high-0quality accommodation, food and
entertainment options.4
3.4 Significant Retail Centres
At 17.7% retail trade has the highest proportion of employment in Lake Macquarie relative to other
industries. The supermarket and grocery store sector employs the most residents making up 3.04%
of total employments.
Lake Macquarie boasts some of the Hunter’s busiest centres, along with a variety of shopping strips
in each town centre. Belmont and Toronto are examples of town centres offering comprehensive
shopping facilities, featuring both national retail outlets and stores with their own unique style.
Charlestown Square is a major retail centre. It contains a concentration of mixed use, business,
higher order retailing, employment, professional and social services and generally includes civic
functions and facilities. It has public transport interchanges to provide a high level of public
transport service and accessibility. A redevelopment has significantly expanded the Centre, almost
doubling its size to 88,000m². With major stores including Myer, Target, Big W, Woolworths, Coles
and Reading Cinemas, along with around 280 specialty stores including JB Hi-Fi, Rebel Sport, City
Beach, Best & Less. It also has approximately 3,500 parking spaces.
Stockland Glendale features over 50,000m² of retail space, including more than 70 stores, a host of
national chains and an eight-screen cinema complex. Major stores include Woolworths, Coles,
Target, Kmart, Aldi and Greater Union.
1 http://www.dantia.com.au/
2 http://www.dantia.com.au/engineering-and-manufacturing/
3 http://www.dantia.com.au/retail-commercial/
4 http://www.dantia.com.au/tourism/
Preston Rowe Paterson Final Report
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Lake Macquarie Fair, Mount Hutton is a 15,000m² centre with easy parking for 850 cars and a strong
fresh food offer. Major retailers include B W and Woolworths and over 43 specialty retailers
including the Reject Shop, Noni B, Millers, and Bakers Delight.
3.5 Types of Residential Development
Lake Macquarie City LGA is characterised by scattered villages surrounding the lake and larger
regional centres close to transport links and major commercial centres.
Residential development has traditionally been towards the three bedroom family home, with the
2011 Census indicating that in Lake Macquarie 86.4% of all homes were this configuration,
compared to 69.5% in New South Wales.
Planning reviews and controls have been encouraging medium density housing development
around the main regional centres of Belmont and Charlestown with apartment buildings selling
well.
Lake Macquarie is also home to a high percentage of the aging population and retirement villages
are numerous throughout the LGA.
4 State & Local Government Legislation for LGA
The Lake Macquarie LEP classifies land into certain zones depending on the use of the land. These
zones allow properties in same zones to be managed in components and valued by mass
valuation methodology.
Lake Macquarie Local Environmental Plan 2004 gazetted on 19 March 2004. This plan covers
certain areas of Lake Macquarie which are deferred matter.
Lake Macquarie Local Environmental Plan 2014 gazetted on 12 September 2014 with
commencement 28 days after gazettal, on 10 October 2914. There has been seven (7)
amendments since the previous valuation.
All zone and value changes have been accounted for in the final values delivered to Land and
Property Information.
The Lake Macquarie City Council is governed by the Lake Macquarie Local Environmental Plan
2004 and the Lake Macquarie Local Environmental Plan 2014. The LEP 2014 is based on the
standardised Local Environmental Plan prescribed by the New South Wales Legislation.
The Plan aims to make local environmental planning provisions for land in the Lake Macquarie City
Council LGA in accordance with the relevant standard environmental planning instrument under
Section 33A of the Act.
Planning documents guide Council when determining proposed development within the city. There
are three levels of planning instruments that apply within a LGA. These are:
Local Plans (including LEPs and Development Control Plans (DCPs)
Regional Plans
State environmental Planning Policies (SEPP)
The LEP is prepared to guide planning decisions and control development through land use zoning
and development standards.
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Lake Macquarie Development Control Plan 2014 (DCP) applies to the entire Lake Macquarie LGA
except the deferred matter areas at Garden Suburb, Whitebridge and Catherine Hill Bay where
DCP No 1 remains effective.
The particular aims of this Plan are as follows:
To make local environmental planning provisions for land in Lake Macquarie City in accordance
with the relevant standard environmental planning instrument under Section 33A of the Act
To recognise the importance of Lake Macquarie City and its waterways and the coast as an
environmental, social, recreational and economic asset to Lake Macquarie City and the Hunter
and Central Coast regions
To implement a planning framework that protects areas of significant conservation importance
while facilitating development and public facilities in appropriate areas that are accessible to a
range of population groups to accommodate Lake Macquarie City’s social and economic needs.
To promote the efficient and equitable provision of public services, infrastructure and amenities.
To facilitate a range of accommodation types throughout Lake Macquarie city so that housing
stock meets the diversity of community needs and is affordable to as large a proportion of the
population as possible.
To apply the principles of ecologically sustainable development.
To encourage development that enhances the sustainability of Lake Macquarie City, including the
ability to adapt to and mitigate against climate change.
Lower Hunter Regional Strategy (LHRS)
The LHRS is a 25 year strategy that provides a planning framework to guide local planning in the five
local government areas of Newcastle, Lake Macquarie, Port Stephens, Maitland and Cessnock.
The LHRS provides for 115,000 new homes to cater for a projected population growth of 160,000
people and plans for up to 66,000 new jobs for the Lower Hunter Region. The LHRS identifies the
following for Lake Macquarie:
o Charlestown as a regional centre
o Morisset and Glendale/Cardiff as emerging regional centres
o 36,000 new dwellings
o Significant employment increases for the area including growth at Glendale/Cardiff and
Charlestown
Lifestyle 2030 Strategy (LS2030)
Adopted by Council in 2013, the LS2030 provides the direction for the future urban and rural land
use pattern based on achieving the principles of sustainability.
LS2030 provides the long-term direction for the overall development of the city and describes
council’s high level policies for managing private and public development in Lake Macquarie.
LS2030 is a long-range land use strategic plan and policy document.
State Environmental Planning Policies (SEPPs)
State significant sites are areas with State or regional planning significance because of their social,
economic or environmental characteristics.
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They are typically large sites owned by the State government that have:
The ability to be redeveloped to achieve State government policy objectives, particularly
those relating to delivery of housing and jobs
State or regional environmental conservation or natural resource significance, or
State or regional cultural, heritage or historical significance.
These sites can play a particularly important role in increasing the supply of housing and employment
in key locations, and improving housing choice and affordability.
Amendments to the zones and planning controls for State significant Sites can be made through a
State Environmental Planning Policy. In most cases, the State Environmental Planning Policy will
amend the relevant local environmental plan.
Lake Macquarie City Council’s website contains more information of the SEPPs that affect the LGA.
5 Market Overview and Sales of Particular Interest
Residential
During base year 2015, an increase of 13% was recorded for residential zoned lands. The residential
property market has seen a period of sustained demand over recent years. The upswing has
gathered momentum over the past 12 months in particular as confidence in the market has
consolidated.
Historically low interest rates has combined with other factors such as a subdued share market to
make investment in property an attractive proposition. The capital growth demonstrated over the
recent past has further encouraged investors (including international), as returns on residential
property have become comparatively stronger than other investment options. The ongoing
strength of the rental market has also continued to underpin investor confidence and returns during
this period.
Of the 137 residential zoned components, 133 recorded increases during the past 12 months with
the most significant being the Toronto, Fennell Bay, Blackalls Park and Fassifern areas which
increased by approximately 25 – 29%. Only one component (WFQ) comprising waterfront lands
recorded a fall in values. This property class has not experienced the same level of demand as the
broader residential market.
In terms of developing areas, Morisset is clearly experiencing a period of rapid growth and
demand, as evidenced by sales of englobe land in the area. A number of development site sales
have occurred during base year 2015, demonstrating significant value increases and a broader
confidence in the fundamentals of the area. Significant new housing is being constructed with
strong take-up levels evident. Cooranbong and Cameron Park are also continuing to meet the
demands for new affordable housing in the region with solid demand and increasing land values.
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SID: 358442 PID: 163425, 163426, 163427,163429
Address: 64, 68, 70, 72 Warners Bay Road Warners Bay
Sale Price: $4,100,000 Analysed LV at contract: $3,500,000
Zone: R2 Component: ADJ – Warners Bay
Analysis:
Improved although considered to be a development site. Tar sealed road. Services available to
boundary. Irregular shaped holding comprising 5 contiguous lots with 4 lots fronting Warners Bay
Road. The site is near level to road with only very gentle undulations and is predominantly cleared.
Split zoned with one large RU4 lot of 9,332.6m² in area and the balance R2 zoned. (A split of roughly
60/40). Ready access off Warners bay Road. Adjoins a seniors living medium density development
to the east and low density residential surrounding. To the rear is riparian corridor.
Improved by three dwellings which are of nominal value only in terms of holding income/risk
minimisation while development plans are finalised. Sold by Knight Frank Brisbane with a lapsed DA
for a 120 bed aged care facility. While this DA has lapsed, the market is highly likely to attribute
value to this in terms of site de-risking value and studies conducted which can be leveraged
upon for any new DA. As such, a value has been attributed to this. The selling agent, Russell Allison
confirmed as much, indicating that the buyers are confident of obtaining development approval
for an aged care facility having done their due diligence in this regard. Considered to be
representative of the market.
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SID: 366181 PID: 118950
Address: 34 Thomas Street Cardiff
Sale Price: $600,000 Analysed LV at contract: $600,000
Zone: R3 Component: AZB – Cardiff/Glendale/Edgeworth
Analysis:
Vacant land. Tar sealed kerb & guttered. All services available. Irregular shaped corner site, set to
road level before falling moderately from the Thomas St frontage to the rear with a slight cross fall.
Some medium level vegetation exists across approximately two thirds of the site. Located within
very close (opposite) proximity to commercial properties including local shops and other key
amenities such as rail and major roads. Surrounding development predominantly comprises well
established low density dwellings along with more modern medium density villa developments.
Small scale medium density development site sold without DA approval by PRD Nationwide at
auction. An estimated yield of 8 units would reflect $75,000 per unit which is at the upper end of
expectations. Considering this site was marketed for sale at $400,000 in 2013, this sale evidences a
spike in the market for such development sites. Although at the extreme upper end, this sale is
considered to be representative of the market.
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SID: 366923 PID: 171307
Address: 7 Stockton Street Morisset
Sale Price: $1,430,000 Analysed LV at contract: $1,380,000
Zone: R3 Component: AZI – Morisset/Bonnells Bay/Cooranbong
Analysis:
Improved. Tar sealed frontage along Stockton Street with unsealed access off partially formed
Goodwin St. Electricity and telephone connected with on-site septic. Predominantly cleared, near
regular shaped corner lot with minor undulations. Located approximately 1 kilometre north west of
the Morisset Town Centre with all key amenities within reasonable proximity. Surrounding
development comprises a mixture of similar rural dwelling/development sites and recently
constructed low to medium density housing.
Improved by a circa 1950's single level weatherboard and metal dwelling considered to add
nominal value only as holding income/risk mitigation value. A DA was lodged in April for a 26 lot
subdivision which would reflect circa $53,000 per lot. Sold by Ray White Newcastle and is
considered to be representative of the market which is currently experiencing unprecedented
demand in this developing area.
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SID: 368684 PID: 159318
Address: 20 Goonda Prom Wangi Wangi
Sale Price: $135,000 Analysed LV at contract: $135,000
Zone: R2 Component: AMD Wangi Views
Analysis:
Vacant land. Heavily vegetated. Near rectangular shaped residential allotment falling below the
road frontage. Good view corridors. The land is located within an established residential location
and is fully serviced.
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SID: 362320 PID: 155026
Address: 47 Lake View Road Kilaben Bay
Sale Price: $370,000 Analysed LV at contract: $370,000
Zone: R2 Component: AFR Toronto/Coal Point, Kilaben Bay
Analysis:
Vacant land. The land is slightly irregular in shape and falls below the road frontage to the rear
boundary, with a general easterly crossfall. It is fully serviced. The front section is cleared and
represents a standard residential block, the rear is zoned E2 and is mostly uncleared. Lake View
Road is tar sealed with concrete kerb and guttering. Surrounding development comprises
residential and rural lifestyle allotments improved with a variety of improvements.
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Commercial
The City has 10 town centres serving as hubs for the local communities that circle Lake Macquarie.
Each of these centres has its own uniquely identifiable and community-based retail and
commercial precincts. Geographic dispersal makes each independently viable and successful,
and facilities access to economically and socially diverse markets around the Lake.5
Over the last two years, Newcastle and the Lower Hunter have seen a stabilisation in values across
most non-residential sectors. This has resulted in a more positive outlook for property. Vendors are
still required to meet the market but there is more consistent purchaser demand, especially for
investment property, although certain sectors of the industrial market, eg heavy engineering, are
still recovering from the cessation of the resources boom.
Overall, we are seeing greater buyer confidence from both investors and owner occupiers, which
may be the result of the flow on impacts of interest rate cuts in 2012 and 2013, no interest rate
increases in 2014, and a reduction of 25 basis points in February and May 2015 to 2.0% and no
change to the rate since, as well as a more positive general market perception due to widespread
news media articles depicting a strengthening residential property market.
The results of recent commercial auctions indicate that prime commercial property at the lower
end (< $10,000,000) is finding a market with surprisingly firm yields, yet second tier property struggles
to find a market. Prime properties are those strong “blue chip” tenants on lengthy leases or
properties which are presented in good condition, being in prime locations with good exposure
and access to transport links which have a growth potential.
The emergence of self-managed super funds has seen strong interest in investment properties at
the lower end, especially in the low interest environment where there are few alternative high yield
investments available.
This is also evident in the higher price range in regional areas (> $10,000,000) where yields for office
oriented properties are showing a weighting around 8% to 9% for good quality properties with
acceptable lease profiles. Whilst we are aware of yields below 7%, this generally only applies to the
Sydney metropolitan area or to a particular asset class that can offer very long term leases (15
years plus) to national tenants, ie supermarkets, fast food, service stations, etc; but, again, this
premium decreases outside the metropolitan area.
Commercial land, comprising of zones B1 through to B7, recorded an annual increase of 9% for
Base Date 2015. Increases were fairly uniform across the zones.
Many of the fringe neighbourhood shop type areas did not demonstrate significant value
increases, although underlying land values have naturally increased as a function of rising
residential values surrounding.
5 http://www.dantia.com.au/retail-commercial/
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SID: 365238 PID: 108621
Address: 57 Main Road Boolaroo
Sale Price: $375,000 Analysed LV at contract: $264,000
Zone: B1 Component: BTA – Neighbourhood Centre – Whole LGA
Analysis:
Sale of ex-service station site. The land is zoned B1 Neighbourhood Centre. The land comprises two
adjoining separate lots, with the boundaries between the lots sitting between the office building
and the workshop building on the site. The land sits slightly above the road alignment, and falls to
the rear. Corner allotment with a frontage to Main Street and Fifth Street.
The property is currently rented with two tenancies, an automotive workshop comprising of three
car bays and a small office used in conjunction with the hardstand area used as an automotive
car yard.
Sold by local real estate agent - Bill Shepard Real Estate. Purchased showing about a 9% yield on
the purchase price, with the agent noting the property is likely to have some residual
contamination from previous use as a service station. Purchaser thinks the cost of remediation if the
use is changed would be about $100,000 as a worst case scenario. The property can continue to
operate with the current uses and tenancies until the site is redeveloped possibly in the future.
This was apparently a former Caltex service station. Caltex sold the site to the current vendor and
he has just sold the property again. Caltex would be regarded as the polluter. Note hypothetical
difference between what the market pays for a contaminated site like this - operating and our
hypothetical valuation under the provisions of 6A(2) that in essence ignores the contamination
while the property is in use.
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SID: 337248 PID: 3272826
Address: 195 Main Road Speers Point
Sale Price: $1,520,000 Analysed LV at contract: $1,140,100
Zone: B1 Component: BTA – Neighbourhood Centre – Whole LGA
Analysis:
Erected upon the land is a circa 1950's part two level brick, fibro and metal former RSL club building
with adjoining carpark. Surrounding development comprises of commercial premises and
residential dwellings. Sold by Cushman And Wakefield Sydney. Advertised as development site
although no DA, nominal value attached to improvements.
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SID: 366939 PID: 153216
Address: 142 Brighton Avenue Toronto
Sale Price: $275,000 Analysed LV at contract: $275,000
Zone: B4 Component: BTI Mixed Use – Toronto/Morisset
Analysis:
Vacant land. Regular shaped inside lot. Moderate rise to rear, steady easterly crossfall. Partly
uncleared. Tar sealed kerb and guttered street. Electricity, water, sewer, telephone available.
Surrounding development comprises detached dwellings and medium density residential flat
buildings. Shopping centre car park opposite and private hospital at rear. Considered to be
representative of the market. Sold by Knight Frank, Newcastle.
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SID: 339649 PID: 136607
Address: 64 Burwood Street Kahibah
Sale Price: $310,000 Analysed LV at contract: $310,000
Zone: B1 Component: BTA - Neighbourhood Centre –Whole LGA
Analysis:
Vacant land. Regular shaped lot which rises moderately to rear. Tar sealed kerb and guttered
street. Electricity, water, sewer, telephone available. Rear lane access.
Surrounding development predominantly comprises of detached housing. Sold at auction by Ray
White Lake Macquarie Newcastle.
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Industrial
Lake Macquarie City has a diversity of industries and a broadly qualified and experienced
workforce. In addition to identified target industries, the following sectors form an integral part of
the City’s economy: mining, power generation, and construction and trades. Industrial areas
where vacant land is still proving popular and available include Cameron Park, Morisset and
Bennetts Green which provides a convenient location for strata industrial bays/units. Further to the
east, in more established smaller industrial areas, most sales are improved. There was one vacant
land sale occurring at Caves Beach.
The broader industrial sector over the past two years has seen high levels of investment and supply.
In 2014 industrial investment was at record high levels with supply increasing during 2015. High
investment and supply has led to positive conditions for tenants with incentives starting to increase
in some markets.
According to latest research from Colliers International, the industrial sector is experiencing
declining rents and firming yields, similar to the commercial sector. Domestic investors accounted
for up to 70% of purchases in 2014, up from 40% in 2011. Supply of industrial land is still strong with
tenant demand now being dominated by transport and logistics, retail and wholesale trade with a
decrease coming from manufacturing businesses.
Lake Macquarie and Newcastle LGA have not realised some of this strength due to the close ties
the region has to the mining sector. With many industrial businesses relying on this sector for growth,
some have experienced a down turn since the contraction of mining activities in the region,
however the broader industry outlook is more positive with industrial upturn now being
experienced.
Smaller industrial shed market is showing strong activity. Sales activity has been greater for those
units and buildings up to 400m2, whilst larger buildings are requiring competitive rents and
incentives. Owner occupiers are buying many buildings using self managed super funds offering
them a strong investment with a good tenant and a friendly landlord.
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SID: 32559 PID: 3495201
Address: 109 Stenhouse Drive Cameron Park
Sale Price: $4,780,000 Analysed LV at contract: $1,570,000
Zone: IN1 Component: ISW – Cameron Park
Analysis:
Improved with two industrial warehouses and office space on an area of 1.188 hectares within
Cameron Park Industrial Estate in close proximity to M1. Ground improvements include extensive
landscaping, metal wire fencing and concrete hardstand area. Leased to long term secure tenant
Veolia Environmental Services for 10 years + 5 year option to 2020.
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SID: 339590 PID: 140126
Address: 23 Strathmore Road Caves Beach
Sale Price: $290,000 Analysed LV at contract: $290,000
Zone: IN2 Component: ISH – Caves Beach
Analysis:
Vacant allotment of 951m2, fully cleared in popular local industrial estate. Perimeter fencing in
place. Near level topography. Cleared site. Tar sealed kerb and guttered street. Electricity, water,
sewer, telephone available. Shows $305/m2.
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SID: 372165 PID: 117753
Address: 7 Pennant Street Cardiff
Sale Price: $4,050,000 Analysed LV at contract: $1,025,000
Zone: IN2 Component: ISG Cardiff/Boolaroo
Analysis:
Improved with metal clad warehouse/workshop facility with gantry crane, ground floor showroom
and offices on 7968m2 allotment in established Cardiff Industrial Estate. Leased to long term secure
tenant O’Donnell Griffin on 6 year lease + 6 year option to renew.
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Rural Locations within the LGA
Rural land recorded an annual increase of 10% for Base Date 2015. The upswing described above
has gathered momentum over the past 12 months in particular as confidence in the market has
consolidated. Most of the rural zoned components, recorded increases during the past 12 months
except for 3 components which held steady and the small component EXX Permissive Occupations
Pelican which was regraded down.
SID: 363612 PID: 171150
Address: 228 Tobins Road Mandalong
Sale Price: $575,000 Analysed LV at contract: $553,500
Zone: E3 Component: EEW West LM >5HA
Analysis:
Vacant land. The land is irregular in shape. The majority is zoned E2 and is uncleared. The land rises
steadily to steeply to the north from a predominantly cleared valley adjoining the road. The land is
partially serviced. Tobins Road is unsealed. Surrounding development comprises a mix of rural
properties with varying intensity of use. The land is improved with a small older style cabin. Sold
mortgagee in possession by Ray White Morisset. Market sale.
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SID: 366972 PID: 171327
Address: 77A Yarrawonga Park Road Yarrawonga Park
Sale Price: $795,000 Analysed LV at contract: $795,000
Zone: E2 Component: EEI West LM >5HA
Analysis:
Vacant land. Slightly irregular parcel of gently undulating, uncleared land. Includes about 1010 m2
of residential zoned land fronting Yarrawonga Park Road which is a bitumen sealed road with
gravel verges. Nearby development comprises older style dwellings to the west and north with
rural/residential properties to the south and east.
Sold by Avery, Toronto after having been on the market since 2011 with a number of agents.
Market sale.
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SID: 359674 PID: 3781905
Address: 28 Cockburns Lane Cardiff Heights
Sale Price: $485,000 Analysed LV at contract: $485,000
Zone: RU4 Component: RRE Primary Production > 5HA
Analysis:
Vacant land. Cockburns Lane is a narrow tar sealed lane with grassed verges. The allotment is
situated at the end of the lane. It is irregular in shape and falls moderately from the frontage
through to the rear boundary which adjoins the railway line. The property is fully serviced and is
cleared. The immediate surrounding development comprises a mixture of detached residential
dwellings of varying age, style and construction.
Considered a market transaction. Sold by Dowling Real Estate
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6 Significant Issues and Developments
6.1 Significant Developments – From Prior to Current Annual Valuation
Below is a summary of significant Development Applications. Most of these Development
Applications are for developments permissible within the current zoning therefore no special
consideration is required:
Property
PID Address Suburb DA Date Description
111450 ,
111451 52 & 60 Ada St Cardiff 4/12/2014
DA 1085/2013 - Medical Centre, Shop, Restaurants or Cafes, Recreational
Facility and Subdivision
137446 83 Wallsend St Kahibah 6/03/2015 DA 1827/2014 Multi dwelling housing - seven units and strata subdivision
110079 31 Hayden Brook Rd Booragul 25/02/2015
DA 1298/2014 Staged development - 11 X Seniors Housing Dwellings (Self
contained), 8 X Affordable Housing Dwellings and associated subdivision
99970 9 George St Belmont 23/02/2015 DA 820/2014 Multiple Dwelling Housing
118089 McDonalds Quarry 108 Reservoir Road Glendale 20/04/2015
DA 1488/2014 Rehabilitation of a Dormant Quarry - Eastern McDonalds
Quarry
3364755 44 Wilson Road Mount Hutton 6/05/2015
DA 236/2015 Childcare Centre - Earthworks, Retaining Walls, Landscaping,
Rainwater Tank
3629126 15 Templar Place Bennetts Green 13/05/2015 DA 231/2015 Light Industrial
3671636 125 Alton Road Cooranbong 19/05/2015 DA 307/2015 291 Residential lot Subdivision
3619109 113 Munibung Rd Boolaroo 20/05/2015 DA 239/2015 Light Industy
118089 106 Reservoir Road Glendale 1/06/2015 DA 1614/2014 Earthworks - Remediation of Quarry (McDonalds Quarry)
3481065,35
55813,
3349592,
3349590
71, 41, 49 Trinity Point Drive Public Reserve
69C Trinity Point Drive Morisset Park 22/06/2015
DA 1503/2014 Marina and associated building, car parking, landscaping and
stromwater infrastructure
3637068 55 Caves Beach Road Caves Beach 23/06/2015 DA 1376/2014 Mixed Use Development
3629122 5 Templar Place Bennetts Green 10/07/2015 DA 691/2015 Light Industry and ancillary office
162944 36 Queen Street Warners Bay 13/07/2015 DA 726/2014/A Multiple Dwelling Housing
120542 273 Charlestown Road Charlestown 14/07/2015
DA 746/2015 Service Station (Alterations to existing building and
replacement of underground fuel storage tanks.
3495693 100 Oakdale Road Redhead 15/07/2015 DA 1489/2014 Rehabilitation of a Dormant Quarry - Oakdale Quarry
3729477 108A Munibung Road Boolaroo 22/07/2015 DA 515/2015 Industrial Warehouse
124676 93 Pacific Highway Charlestown 31/07/2015 DA 54/2015 Service Station and Restaurant
2960586,
3634777 617 & 615 Freemans Drive Cooranbong 27/07/2015
DA 714/2014 Utility Installation - Sewage Treatment Plant and Water
Recycling Facility
117303 7 Newcastle Street Cardiff 12/08/2015
DA 641/2015 Multiple Dwelling Housing and Subdivision (Retaining existing
house and create two additional dwellings)
171297 5 Stockton Street Morisset 9/09/2015
DA 277/2014 Small Lot Housing, Dual Occupancy - attached, multiple
dwelling housing and subdivision
3513909 48 Trinity Point Drive Morisset Park 17/09/2015 DA 907/2015 Eight Dwellings and Subdivision (small lot housing)
Boolaroo Industrial Area
The Boolaroo industrial area has had a further reduction in land value at the end of Munibung
Road where vacant land sales during 2015 have provided evidence of further reductions in land
value due to contamination/electricity easements etc.
Wyee Residential – Amendment 61
Comprises allotments known as the Wyee West Paper Subdivision which were rezoned from rural to
residential when Amendment 61 to the Lake Macquarie LEP was undertaken.
They do not possess any essential infrastructure (sealed roads, drainage, sewer, water, power or
telecommunications) which would allow council to consent to dwellings on these allotments.
Council has been considering charging individual land owners section 94 contributions to develop
this area.
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Following the rezoning there has been a significant number of speculative purchases within the
area. The sale of PID 170028 highlights this. This has been sold twice throughout the year – initially in
March for $94,000 then resold in October for $50,000. In both instances it was marketed through a
local agent who has advised that the initial purchase was undertaken as a speculative play and
was considered in excess of market value at the time of purchase. This has been verified with the
resale price of $50,000.
Talks were undertaken with the District Valuer prior to application of a factor to this component and
it was agreed that as this and a number of other sales were speculative in nature and considered
out of line to factor the component to reflect the general increase within the greater established
residential area rather than the full application of the increase implied by factors on speculative
sales.
Waterfront/Waterfront Reserve Allotments Lake Macquarie
There was a significant variation in factors applied throughout the waterfront components within
Lake Macquarie. Whilst land values increased overall by just over 7% for the period this was not a
homogenous increase. Component factors varied from 1.23 in Valentine to 0.94 in Coal Point.
Nor were factor increases within some components uniform across all allotments with significant
handcrafting undertaken in certain areas. Component WMB for example comprised of 692
allotments across six suburban localities with varying factors applied from 1.17 in Fishing Point to 1.05
in Wangi Wangi and parts of Dobell Drive in Wangi Wangi factored in the 0.9’s.
Variations reflect the disparities in amenity, water access, locality demographics, previous land
value movements, accessibility and allotment aspect.
LEP Conversion and Amendments
The new standardised Local Environmental Plan for Lake Macquarie was gazetted on 12
September 2014 with commencement from 10 October 2014. The previous contractor delivered
final values prior to the commencement of the new LEP. As part of hand over of the roll the
previous contractor changed the roll to the new zone template without having regard to value
changes caused by the zone changes.
This LEP conversion process not only converted zones but also other planning layers including, but
not limited to, building heights, lots size and FSRs. Therefore the roll was handed over with the
changes to components and zones but no amendments to values based on these changes.
PRP undertook an entire review of these changes and worked through amendments to values and
other issues.
Since the introduction of the LEP we have successful managed seven amendments, several which
have required the rezoning of a large number of properties. Amendments included:
A deferred matter in Warners Bay commercial precinct was amended to consolidate B3
zonings.
Forty nine properties in a “Paper Subdivision” at Killingworth were rezoned from R2 to E2.
Rezoning of several R3 properties in Charlestown to RE1.
6.2 Significant Developments – From Prior to Current Local Government Council Rating Valuation
Trinity Point is a residential and commercial estate located on the shores of Lake Macquarie.
Once fully developed, Trinity Point will include 189 residential lots and medium-density housing, 150
tourism and residential apartments, a 188-berth marina, restaurants, cafe and outdoor dining
Preston Rowe Paterson Final Report
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facilities. The project also includes a 300-seat conference centre, serviced meeting rooms, public
boardwalks and other community facilities.
Stages 1-4 of the residential subdivision are completed and Johnson Property Group have approval
to develop the remaining stages of 98 residential lots and 23 medium density housing.
The Belle Apartment development at Belmont is nearing completion. The $35 million development
will comprise ground level retail shops with 110 1, 2 and 3 bedroom apartments over four levels
above.
The residential units have been aimed at the more affordable level of new units available in close
proximity of the Belmont retail area and will be in contrast to the higher priced apartments situated
close to the waterfront.
The majority of the units have been sold off the plan with the general price level of the 1 bedroom
units below $300,000, 2 bedroom units below $350,000 and 3 bedroom units below $450,000.
Rosecorp’s development Beaches at Catherine Hill Bay has been selling fast with 85% of the off the
plan lots sold for Releases 1, 2 and 4. 250 lots out of 294 have now sold with prices ranging from high
$200,000s up to low $600,000s. The next stage due for sale, will be Release 5 in February 2016. Civil
works are still underway with Montefiore Road currently closed for construction.
The seven storey Vivid Apartments development has commenced construction at Charlestown.
Comprising of apartments and retail space, this development is within walking distance to the
popular Charlestown Square.
Proving that the latest real estate wave is not restricted to Newcastle, the backers of the Waterview
Apartments project at Belmont have dusted off their consent and are set to resume building.
This is a significant project that has been waiting for the right time to be released to the market and
that time has arrived.
Waterview will comprise four three-storey buildings on the corner of Victoria and Walter Streets with
views of Belmont Bay. Each of the 20 apartments will feature three bedrooms and high-end
finished.6
Lead Abatement Strategy Areas (LAS)
The lead contamination issues in the Boolaroo, Argenton and Speers Point area from the former
Pasminco Aluminium Smelter continue to receive high media coverage.
Significantly Lake Macquarie City Council previously considered residential lands within the defined
LAS area to be complying development if a residential dwelling or extension was to be
constructed. This policy changed during 2014 with complying development requiring a site
investigation with a site clearance required from a suitably qualified consultant prior to approval for
a dwelling or addition.
The media have reported several articles were owners applied for dwelling and/or extensions and
were required to go through the process of site clearance. These site clearances required
specialist consultant advice and often the removal of about 100 mm of topsoil and replacement of
soil and turf. It was reported there was one case of up to $60,000 in additional costs.
We considered that these properties were now subject to a further financial burden that need
additional attention.
Following discussion with our District Valuer it was decided that the best way to manage the LAS
areas would be to group them into R2 and R3 specific components. This required identification of
6 Newcastle Herald, 4 November 2015
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the affected properties and changes to four components. Scrutiny of these areas to date does
not indicate any adverse effects to land values from the contamination. Additional sales analysis
was undertaken to identify any adverse effects on values associated with Council’s change in
policy and the media attention.
Overall for the two components created within the LAS area both showed increases since the last
base date of over 20% with primary factors applied to the component of around 1.18 (18%
increase). These two components were amongst the components showing the highest increases
in Lake Macquarie.
Little Pelican – Component EXX
Component EXX is used to accommodate just 5 entries that are all the same defined size of about
148.8sq.m. All entries are waterfront land facing the Swansea Channel within Lake Macquarie.
All of the land is reclaimed swampland located on Crown Land, with individuals given tenure
through long term permissive occupancies. These entries are interesting in that they are both
14G/14I Basis; being both heritage listed and permissive occupancies over Crown land.
Originally there were 14 permissive occupies with cottages within the location of little Pelican, and
over time this has been reduced to just 5. It is well known locally that it is Crown Land’s intention to
incorporate all of the remaining 5 permissive occupancies holdings back into publicly owned and
operated lands for public access and public use.
The permissive occupancy agreements have proven to be onerous in that these properties cannot
be rented or transferred. Any breaches of the agreements have resulted in the tenure being
surrendered. The process of terminating these permissive occupancies has to date taken many
years.
Based on the very restrictive nature of the permissive occupancies and no possible market for re-
sale of these properties whatsoever; we have reduced the 2015 land values to reflect the use of
the land as a very basic cottage only.
7 Significant Value Changes
7.1 Significant Value Changes – From Prior to Current Annual Valuation
The residential segment of the market has shown the most significant price growth within Lake
Macquarie since the 2014 Base Date. Residential property is far and away the largest and
influential segment of the local Lake Macquarie property market, based on a segmentation by
zone.
Generally Lake Macquarie includes many suburbs that would be regarded within the Lower Hunter
as affordable, with a large proportion of residential zoned property having land values under
$200,000.
Investors have been particularly active over the last year within the lower priced suburbs
throughout Lake Macquarie. These have tended to show the highest returns for investors.
The availability of negative gearing to investors and increasing numbers of foreign investors buying
property within Lake Macquarie have all resulted in the recorded price growth that was evidenced
from this year’s Annual Program. Investors are progressively paying more money for property
investments, particular over the last year.
We can report that some of the lowest graded values within Lake Macquarie have shown the
highest increases in values/prices. Properties that are the most affordable, with associated problem
issues such as flooding, main roads, poorly maintained dwellings and property amongst housing
commission, for example, have all shown the greatest increases – starting from a low base.
Preston Rowe Paterson Final Report
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Higher valued/priced properties within Lake Macquarie, including the many waterfronts, prestige
locations near beaches and rural properties have increased also; but at a lower rate.
This has caused a phenomenon known as a convergence or compression of values to occur across
the entire district where the price differential between the better quality properties and the lower
quality properties is reduced over time.
This year has also seen historically low interest rates continue for yet another year, coupled with
inflation that is lower than last year and considered under control by the RBA. Most economic
commentators are pointing to stable interest rates or even the prospect of further interest rate
reductions over the next 12 months.
At the Government level, both the State and Federal Governments are heavily investing in
infrastructure spending. This investment on roads, rail and other infrastructure facilities has been very
pronounced within Newcastle LGA, with little being spent directly into Lake Macquarie; but is
having a flow on effect within Lake Macquarie, with much of the workforce for these projects
residing within the suburbs of Lake Macquarie.
Within Lake Macquarie there are a small number of Coal Mining operations. The pronounced
downturn in investment spending and general cost cutting within the Coal Industry within Lake
Macquarie has been geographically noticeable in terms of layoffs of staff; however Lake
Macquarie has not experienced the drop-off in prices/values that many of the districts further up
the Hunter Valley in the outer hunter have been experiencing.
This mostly is because Lake Macquarie has a more diversified business base than some of the
districts further up the valley and out in the Hunter Valley Coal Chain.
New building and renovations has been increasing with Lake Macquarie, and generally replacing
any reduction in investment by mines, but this trend of spending on building is far more
pronounced within the neighbouring district of Newcastle. Again Lake Macquarie is a supplier of
labour into the higher growth centre of Newcastle LGA, so receives flow on benefits in term of
aggregate demand for property owners in Lake Macquarie.
Further investment spending by both government and private industry is expected within Lake
Macquarie. While Newcastle is about to experience historic high levels of investment by both
government and developers, especially within the CBD, Lake Macquarie to a much lesser extent is
also forecasting more urban development and far less government spending. Lake Macquarie will
be a beneficiary of this spending being so geographically close to Newcastle.
Ongoing annual verification and identification of entries requiring corrections within Lake
Macquarie’s values for 2015 were significantly affected by zoning changes to numerous properties
with many increases due to increased development potential of higher zones, and many
decreases due to decreased development potential of lower zones.
Some examples of significant Annual Value Changes:
ISG Cardiff/Boolaroo – as mentioned due to site specific electricity easements and contamination
issues, several sites were significantly reduced on the back of 2014 significant reductions.
ISH Caves Beach experienced an overall increase due to having one vacant land sale as
evidence in this traditionally closely held area. This was an opportunity to increase values, although
they were conservatively increased and did not rise to the level of the one sale at 23 Strathmore
Road. Land Value rose from $232,000 in 2013 (General Valuation Year) and 2014 to $280,000 in
2015.
ISB Bennetts Green, 25 Stratham Street experienced a significant decline in value going from
$114,000 (2013) and $128,000 (2014) down to $7000 in 2015. As part of verification, this entry was
identified as being owned by Council with unlikely utilisation so a nominal value was assigned.
Preston Rowe Paterson Final Report
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ISW Cameron Park, 119 Stenhouse Drive experienced a significant increase in value going from
$643,000 in 2013 and 2014 up to $890,000 in 2015. This increase was required due to recent sales
evidence, and to improve grading on an allotment that had historically been kept low.
7.2 Significant Value Changes – From Prior to Current Local Government Council Rating
Valuation
The last General Valuation year within Lake Macquarie was 2013. Two years have passed since
then, with both the last two years being characterised as high growth years in an historical context.
This is coupled with inflation being relatively stable and “under control” over the last two years.
Overall, the last two year period represents the accumulation of values over two very strong growth
years with the economic drivers and complications highlighted in 7.1 still expected to continue over
the coming 2016 annual program.
8 Overview of the Quality Assurance Process
LPI has been provided with a detailed Valuation Analysis Report, which details the Quality
Assurance Process of PRP 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 basis’ have been correctly determined and all concessions and
allowances have been supplied. Additionally properties that had land values amended through
the objection or reascertainment 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
6.6.1. 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.
Colin Pugsley
Director
Contract Services Manager
B.Ec, B.Bus(Land Ec), MBA,
FAPI Certified Practising Valuer
Reg No: VAL3315
Preston Rowe Paterson Valuation Analysis Report
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