Nearby mining activity, solid infrastructure, an airport and country living are some of the reasons the NSW country town of Orange is turning into a veritable river of residential property gold.
Orange, about 260 kilometres north west of Sydney, recorded 921 property sales over the course of 2011 worth $270 million, ranking 54th on RP Data’s list of the top 100 suburbs with the highest aggregate of sales in 2011. Orange ranked at number 144 in 2010.
The vast majority (781) of these sales were houses, with the median price of an Orange house now standing at $296,000. The median unit price is $217,000.
House prices in Orange have been booming, with the town experiencing about 4% house price growth for the year to September 2011, according to the latest ANZ Housing report, the strongest capital growth of all NSW regional areas.
According to RP Data, houses are selling at an average discount of 6.1%, with an average time on market of 110 days. However, RP Data says house prices remained flat over 2011, having experienced strong growth over the two preceding years.
Orange has also attracted its fair share of those seeking a lifestyle change and also taking advantage of the NSW government’s regional relocation grant, which provides a one-off payment of $7,000 to assist home buyers with the cost of relocating from their metropolitan home to a regional home.
About 600 Sydneysiders relocated to Orange, according to James Treloar, former Tamworth mayor and spokesman for Evocities, a campaign comprising the cities of Albury, Armidale, Bathurst, Dubbo, Orange, Tamworth and Wagga Wagga aimed at encouraging capital city residents to move to and invest in one of these regional cities.
Orange is one of the regional economies that is benefiting from mining activity, according to the February property market report from valuers Herron Todd White.
According to the valuation firm, the shortage of available rental property is so severe that motel occupancies are running at a 90% – an extremely high number for a regional town.
“Orange is experiencing a rental housing shortage, with motel occupancies running at around 90%,” HTW says.
The boom in house sales and values in Orange is being partly driven by a number of nearby mining projects under construction.
“Construction of the Cadia East Gold Mine is nearing completion and will become the largest underground mine in Australia, at a cost of approximately $1.9 billion.
“The expansion will prolong mining in the valley for the next 30 years,” says Herron Todd White.
Construction of the mine will finish around April 2012, when an estimated 1,000 contract workers will be stood down.
“This should result in more normal market conditions with a permanent mine workforce of around 750 to 800 people. What impact the mine will have remains to unclear,” says Herron Todd White.
A November report by PRDnationwide noted that the Orange municipality was one of the strongest-performing NSW rental markets, with the mining activity in the Cadis Valley “responsible for much of the growth in rental prices”.
“While the median rent price for a three bedroom house in the region increased 15.8%, rent for two-bedroom units rose 18.8% in the 12 months to September 2011 resulting in a median weekly rent of $238,” says PRDnationwide.
Orange is one of the hotspot picks of Sam Saggers from Positive Real Estate.
He describes Orange as one of the new “boom” mining towns and recommends investors look at properties under $300,000.
He says the market is offering both high capital return and high capital growth – “that anomaly does not align itself all that often, so you have a great opportunity for both in Orange”.
In addition to the benefit of mining activity, Orange is also one of those regional markets with good infrastructure and transport connections to major capital cities.
Raine and Horne CEO Angus Raine says baby boomers will look to buy in towns like Orange (as well as Tamworth and Port Macquarie), because they have “airports that make it easier for friends and families to visit”.
Orange is one of Raine’s “breakout” markets to watch in 2012 because of its standing as a “transport hub town”.
Orange also has one of Australia’s best wine districts, with local wines regularly winning national and international awards and is considered a regional gourmet food capital.
In addition, Orange is home to Schools of Agriculture and Health of Charles Sturt University.
Peter Fisher from the Property Shop Orange is selling a three-bedroom house in Emily Place for $279,000, listed just before Christmas.
He describes the property (pictured above) as a “great starter home or investment”. It is currently being rented at $330 per week, equating to a yield of 6.15% at the current asking price.
It last sold for $199,000 in June 2003.
However, investors should exercise a fair amount of caution in Orange.
Orange, along with Dubbo and Broken Hill in the state's far west, were some of the regional centres hard hit by foreclosures, according to Supreme Court writ figures released in January.