Morning Briefing: Infrastructure pushes Blue Mountains property ahead

A key infrastructure upgrade has helped an area of New South Wales kick into gear... Auction volumes break the 3,000 barrier again...

Infrastructure pushes Blue Mountains property ahead
A key infrastructure upgrade has helped an area of New South Wales kick into gear, according to the head of a major real estate franchise.

Angus Raine, executive chairman of Raine & Horne, believes the recent upgrade of the Great Westernm Highway to dual carriage way is behind the improved performance of the property markets in the Blue Mountains and regional areas further west.

“Work on the dual carriageway seems to have dragged on since the days of Blaxland, Wentworth and Lawson, but the road's completion earlier this year means the Great Western Highway is virtually an extension of the M4 Motorway,” Raine said.

“This has led to increased traffic to the mountains and beyond, with property interest and prices spiking as a result,” he said.

Raine said prices in the region have jumped 5% - 10% in the past 12 months as a result of the work and Glen Ebzery, principal of Raine & Horne Leura and Raine & Horne Katoomba, said the market is performing at its best for more than a decade.

“The prices that have been achieved for some Blue Mountains properties are unheard of – and well above the highs of the last real estate boom in 2003 and 2004,” Ebzery said.

Those opinions are backed up by Mathew Ward, director of buyers’ agency Aspect, who said after a period under the radar, the region has started moving forward.

“Generally the area is doing quite well, towns like Lithgow and Oberon have been flying under the radar over recent years but they’re starting to pick up,” Ward said.

“The bigger towns like Orange and Bathurst have been solid recently and look they will continue to be solid. There’s good infrastructure spending happening there at the moment and they have a good economic mix as well, they might not get a boom like Sydney, but they’ll be a good slow burn,” he said.

Based in Orange, Ward said the agency is currently dealing with a number of investors who currently see the area as more trustworthy than the Sydney market.

“The way Sydney’s gone at the moment, the gap between its prices and the regions is too big and people are starting to look for the cheaper areas with good returns.

“Most of the stuff we’re doing at the moment is investors. They’re seeing they can get a modern property for $300,000 - $350,000, so they get the depreciation benefits, as well as good growth and returns.

“A lot of them are investors from Sydney who just aren’t trusting of what the Sydney market is doing at the moment.”

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Auction volumes break the 3,000 barrier again
Despite a slight week-on-week dip, auction volumes are set to remain at elevated levels this week.

According to CoreLogic RP Data, Australia’s capital cities are set to hold 3,171 auctions this week, down slightly on the 3,274 held last week.

Final clearance figures from last week show there was a slight strengthening in the national clearance rate, with it increasing to 62.3% from the previous week’s 61.4%.

Melbourne has retained the mantle of the nation’s busiest auction market, with 1,518 homes to go under the hammer in the Victorian capital, marginally down on the 1,567 held last week.

The previous two weeks have seen Melbourne’s clearance rate hover just below 70%, at 69% and 69.8%, and vendors will be hoping there is no softening this week.

In Sydney, vendors will be hoping for an improvement in the clearance rate, with it again ciomming in at below 60% last week.

The harbour city’s rate finalised at 58% last week, down from 58.4% recorded over the previous week.

Last week’s result was also Sydney’s lowest clearance rate since February 2013.  

This week Sydney is scheduled to hold 1,130 auctions, slightly lower than the 1,248 held last week.

If Sydney can’t post a better clearance result than Melbourne this week, it will be 11-straight weeks of dominance for the Victorian capital.

Brisbane will have another relatively busy week by its standards, with 214 auctions scheduled compared to last week’s 198.

Volumes are also up in Adelaide from 121 to 141 and Canberra from 102 to 116.

After holding 39 auctions last week, Perth is scheduled for 38 this week.

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