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First Quarter │2013

HORSHAM AREA Property Watch®

Horsham Town Centre

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 October 2012, while rents are based on the

year ending June 2012.

KEY HIGHLIGHTS

In the past 12 months ending October

2012, the median house price

increased by 10.3 per cent, to

$235,500.

Over the past ten years, sellers have

realised an average capital growth

return of 9.1 per cent per annum,

through an average holding period of

7.8 years.

The final vacant land median price

recorded for the February 2012 six

month period was $102,450, equating

to an increase of $31,100 in just three

years.

HORSHAM AREA MARKET OVERVIEW

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

historic and current market trends of the Horsham Area, which encompasses the

suburbs of Horsham and Haven, with a comparison to the wider Horsham Local

Government Area (LGA).

The Horsham Area property market has averaged 192 settled house sales per six

month period over the past decade. At the time of writing, the most recent six

month period ending October 2012 has registered a total of 140 settled sales.

Although this amounts to a figure slightly less than the three year average of 152

sales per six months, it is anticipated that there is a larger portion of sales that

have yet to settle in the month of October. While activity over the three past years

has been fairly robust, the median price has surged to new heights. Twelve

month growth in the median house price recorded a substantial 10.3 per cent

increase to $235,500. It appears that the period of low interest rates in between

2011 to 2012 has assisted in making property more affordable, allowing for

buyers to increase their purchasing power. Early indications have shown that

activity in the Horsham Area house market has picked up throughout the last first

quarter of 2013, with potential home owners interested in brick veneer houses

priced between the $300,000 to $600,000 price range. Investors have also shown

interest in the Horsham market, in particular redevelopment sites at an affordable

price point of up to $150,000.

As displayed in the Horsham Area House Sales Cycle, over the past three years

houses have displayed a consistent level of activity, with a rapidly increasing

median price. However, while the Horsham Area unit market represents only 15.3

per cent of total dwellings, the median unit price has typically pursued a similar

level of growth to that of houses. Only over the past six months has a large price

divergence between houses to unit come around. This could offer investors the

potential to attain stronger yields.

HORSHAM AREA HOUSE & UNIT SALES CYCLE

Prepared by PRDnationwide Research. Source: PDS

257

212 2

39

232

235

204

168

172

179

16

3

234

217

201

209

205

168

165

133 153

153

140

$235,500

$170,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

0

50

100

150

200

250

300

350

200

2 O

CT

200

3 A

PR

200

3 O

CT

200

4 A

PR

200

4 O

CT

200

5 A

PR

200

5 O

CT

200

6 A

PR

200

6 O

CT

200

7 A

PR

200

7 O

CT

200

8 A

PR

200

8 O

CT

200

9 A

PR

200

9 O

CT

201

0 A

PR

201

0 O

CT

201

1 A

PR

201

1 O

CT

201

2 A

PR

201

2 O

CT

Med

ian

sale

pri

ce

Nu

mb

er

of

sale

s

Half year period

House Sales Unit Sales House Median Unit Median

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. © 2013

Your home of property knowledge www.prdresearch.com.au

Research Analyst │Aaron Maskrey P (07) 3370 1702 F (07) 3120 4502 E aaronmaskrey@prd.com.au

PRDnationwide Horsham │Principal Wes Davidson P (03) 5382 0000 F (03) 5382 0600 E wesd@prdhorsham.com.au

Redevelopment

sites under $150,000

are in strong

demand from

investors.

HOUSE PRICE POINTS

Prepared by PRDnationwide Research. Source: PDS

AVERAGE CAPITAL GROWTH

Prepared by PRDnationwide Research. Source: PDS

A resale analysis was undertaken to ascertain the average annual returns

received by investors who exited the Horsham Area house market over the six

months to October 2012. These sellers realised returns of an average 5.0 per

cent per annum, through an average holding period of 7.8 years. While this

amount of capital growth has declined from the ten year average of 9.1 per cent

per annum, it still remains significantly positive.

Observing the House Price Points chart over the October 2012 six month period,

it is shown that the price range of $200,000 to $400,000 has expanded by 7.1 per

cent, to amount to 60.7 per cent of total sales. Historically, the sub $200,000

price point has claimed the majority of home buyers.

Sales activity in the vacant land market surged 121 per cent in the six month

period ending April 2012. This level of high activity has occurred since mid-2006,

but has since quietened down over the most recent October 2012 six months.

During this recent period a total 20 settled sales occurred, with the half of these

sales falling within the $100,000 to $149,000 price range. The median price

appears to have reached a price plateau over the April 2012 six month period,

and has since contracted by 5.1 per cent to $102,450. Due to a lack of prime

land and the ever increasing building costs potential buyers are assessing

established homes as a more viable option both in terms of value and position.

The general sentiment felt among buyers deems that building a new home will

not deliver worthwhile returns in the current market.

Over the past five years, the rental market has grown to amount to 29.6 per cent

of the total dwellings in the Area. When observing the movements of the rental

market within the Horsham Area, rental prices for houses have remained stable

over the June 2012 financial year. The median weekly rent for a standard three

bedroom house was $230 per week, while the rent for a four bedroom house

increased by 22.6 per cent (to $325 p/w). Vacancies in the rental market have

slightly increased over the second half of 2012, providing more expectation that

the weekly median rent for homes will remain fairly stable over 2013.

Looking ahead into 2013, a sustained period of low interest rates should draw

investor activity into the property market, as loans become more affordable

transferring into more attractive yields. Houses should continue to observe steady

growth, while units will likely see a price correction.

HORSHAM AREA VACANT LAND SALES CYCLE

Prepared by PRDnationwide Research. Source: PDS

46.9%

44.8%

28.4%

31.3%

30.0%

25.0%

21.9%

32.1%

36.1%

31.3%

45.0%

25.0%

100.0%

31.3%

23.0%

35.5%

37.3%

25.0%

50.0%

0% 50% 100%

Less than $100,000

$100,000 to $199,999

$200,000 to $299,999

$300,000 to $399,999

$400,000 to $499,999

$500,000 to $599,999

$600,000 to $699,999

Portion of total sales

Price

bra

cke

t

2010 OCT 2011 OCT 2012 OCT

3.7%

14.2%

9.9%

5.0%

0.0% 5.0% 10.0% 15.0%

1998 OCT

1999 APR

1999 OCT

2000 APR

2000 OCT

2001 APR

2001 OCT

2002 APR

2002 OCT

2003 APR

2003 OCT

2004 APR

2004 OCT

2005 APR

2005 OCT

2006 APR

2006 OCT

2007 APR

2007 OCT

2008 APR

2008 OCT

2009 APR

2009 OCT

2010 APR

2010 OCT

2011 APR

2011 OCT

2012 APR

2012 OCT

Average capital growth p.a.

Six

mo

nth

peri

od

$102,450

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

0

20

40

60

80

100

120

140

200

2 O

CT

200

3 A

PR

200

3 O

CT

200

4 A

PR

200

4 O

CT

200

5 A

PR

200

5 O

CT

200

6 A

PR

200

6 O

CT

200

7 A

PR

200

7 O

CT

200

8 A

PR

200

8 O

CT

200

9 A

PR

200

9 O

CT

201

0 A

PR

201

0 O

CT

201

1 A

PR

201

1 O

CT

201

2 A

PR

201

2 O

CT

Med

ian

sale

pri

ce

Nu

mb

er

of

sale

s

Half year period

Number of sales

Median