Upper Hunter property market goes cold

THE Upper Hunter has gone from one of Australia’s hottest property markets to a bargain hunter’s playground in less than two years.

With the exodus of mining construction contractors over the past nine months, hundreds of ‘‘for sale’’ signs have sprung up advertising properties for tens of thousands of dollars less than what they would have sold for 18 months ago.

Michael Cruickshanks from LJ Hooker Singleton estimated there were fewer than 200 properties for sale in Singleton in June 2012 compared with more than 300 at the same time this year.

‘‘For someone who has just bought their house in the last couple of years, taking a cut of $10,000 to $20,000 is going to put them back to similar to what they paid for it or worse,’’ Mr Cruickshanks said.

A search of domain.com.au on Thursday showed there were more than 300 properties for sale in Singleton and surrounds. The median house price was $410,000, the average time on the market was 30 days and the average discount was 5.3 per cent.

The website showed there were 230 properties for sale in Muswellbrook with a median price of $323,000.

The average time on the market was 95 days and the average discount was 4.9 per cent.

Australian Property Monitors data shows that 108 of 402  houses advertised for sale in the Singleton local government area sold in the six months to June 2013, a 0.7 per cent drop on the previous six months.

In Muswellbrook 76 of 336 houses advertised for sale sold in the six months to June, a drop of 1.1 per cent.

Renters are also demanding lower rents.

Australian Property Monitors data shows there was a 17.3 per cent fall in the rental price for a unit in Singleton for the six months to June 2013. In Muswellbrook the fall was 13.3 per cent. 

As a result, renters, who were camping in local parks at the height of the mining boom, are now demanding their landlords drop their rents.

‘‘In June this year we leased 21 properties and in June the previous year we only leased six,’’ Mr Cruickshanks said. ‘‘People are now moving from place to place to get cheaper rent. If they were paying $450 a week for a three-bedroom duplex, now they can get a four-bedroom place with a rumpus.’’

Singleton real estate agent Sue Shaddock said the downturn was the worst she had seen in 20 years.

‘‘I haven’t seen vacancy rates this high for over 10 years,’’ Ms Shaddock said. ‘‘It’s hit us harder and quicker than previous downturns.’’

Australian Property Monitors senior economist Andrew Wilson said the downturn in the Upper Hunter’s property market was similar to what had occurred in central Queensland. 

‘‘It’s basically a dual-edged sword of decreased mining sector activity and an increase in investor activity. As a result, we are seeing reduced demand and increased supply,’’ Dr Wilson said.

‘‘I’d describe the current situation as more of a bottoming out rather than a fall.’’

Opinions about the relative severity and likely length of the slump vary among Upper Hunter real estate agents but all agree there has been a significant drop-off in the market since late last year.

‘‘Something similar to this happened in the late 1990s and early 2000s when Rio Tinto got rid of a lot of senior staff. A lot of people lost their jobs and took redundancies and left town. That took two or three years to fix itself,’’ Michael Cruickshanks said. 

‘‘If they put workers back on again it can all turn around in six months. ’’

LJ Hooker Muswellbrook licensee Phillip Lawler said this was the third major property downturn in three decades.

‘‘When you get a situation where there is some economic pressure and political pressure the coal industry tends to wrap itself up a little bit and protect itself,’’ he said.

‘‘The reality is the coal industry has massive ongoing contracts to fulfil so they have to keep operating. I think the worst of it is over and there will be consistent growth over the next six to 12 months.’’

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