Murrumbidgee NSW property market scorecard: Simon Pressley
GUEST OBSERVER
The New South Wales region of Murrumbidgee has more than rich soils. The property markets of eight of the thirteen local government authorities which make up the region featured in the Top 20% of Australia’s best performed property markets over the last fifteen years.
The LGA of Coolamon, directly north of the region’s unofficial capital of Wagga Wagga, was the state’s best performed property market over the last fifteen years, ranked 6th in Australia. Coolamon has a modest population of 4,308 (ABS 2014) and is renowned for wheat, wool, and old-world charm. Median property values have increased by an average of 10.5% each year and were still a very affordable $162,500 as at December 2014. Average rental yields are 7.7%.
Propertyology conducted a study to compare the historical property market performance of each of Australia’s 550 local government authorities between 2000 and 2014. Given that some property markets have higher rates of growth and others have higher rental yields, Propertyology calculated the ‘total return’ (average annual growth rate plus rental yield) and we then ranked the LGA’s from 1 to 550 based on this performance.
The Murrumbidgee region’s population of 145,000 people has been growing by less than 1% per year (below the national average of 1.5%) however, supply of new housing has been more controlled than bigger profile cities. Affordability, lifestyle, and an unemployment rate below the national average are behind the region’s strong performance.
The region contains one of the most productive and agriculturally diverse areas of Australia. The Murray and Murrumbidgee Rivers replenish the rich, fertile soils which produce over 25% of NSW's fruit and vegetables, 90% of NSW citrus products, and 80% of NSW wine/grape production. Rice, wheat, lamb and beef are also major commodities.
The LGA’s of Junee (ranked 44th), Temora (77th), Cootamundra (151st), Hay (164th), Lockhart (175th), Narrandera (187th), and Murrumbidgee (209th) all featured in Australia’s Top 20%.
The region’s three most populated LGA’s, Wagga Wagga (240th), Leeton (302nd), and Griffith (423rd) didn’t perform as strongly over the last fifteen years as their smaller profile neighbours.
Property sales volumes in parts of the region have been solid during 2014/15. Leeton saw a 15.6% increase in median house values to the year ending May 2015. That is as strong as any market in Australia, other than Sydney. 180 properties have been sold in the Leeton LGA over the last year, the highest level since 2009. With a median house price of $230,000 an investor could buy four properties in Leeton for the cost of one property in Metropolitan Sydney. And, Leeton’s 6% average rental yield is superior to all capital cities.
Leeton is described as Australia's Rice Capital and is home to the SunRice headquarters. Freedom Foods, Berri Juices, Riverina Beef and Murrumbidgee Irrigation are other big employers for the LGA which has some of the most productive citrus, rice, grapes and wheat farms.
Temora (17.6% growth in median house price) and Murrumbidgee (6.5%) have also seen solid growth over the last year. Mild growth in Wagga Wagga (3.2%), Junee (3.7%), and Griffith (1.9%) and a small reduction of 2% in Narrandera are fairly typical of most of Australia during 2014/15.
With Australian agriculture well placed to prosper from opportunities which the Asian Century provides and the very affordable cost of housing within the region, Propertyology believes that the property market outlook for this region is solid. Markets like this have a tendency to produce steady growth year-on-year. While they don’t attract the fanfare of bigger profile cities they usually have less pronounced peaks and troughs and often perform better over time.
Of the 43 LGA’s which make up Greater-Sydney, Blacktown and Camden were the highest ranked with a middle of the road performance of equal 276th.
Simon Pressley is Managing Director of Propertyology, a REIA Hall Of Fame Inductee, property market analyst, accredited property investment adviser, and Buyer’s Agent. Propertyology works exclusively with property investors to purchase properties in strategically chosen locations all over Australia.
