Mortgagee sales decline 36% on NSW central coast as property market consolidates ahead of brighter 2013

Prospects are looking somewhat brighter for the NSW central coast property market in 2013 with a large decline in mortgagee sales and the market consolidating over the course of 2012.

In-house records from property values Herron Todd White (HTW) show that instructions to provide mortgagee valuations in the popular retirement destination and lifestyle location were down by 36% over 2012.

HTW says it was “heartened” by the fewer mortgagee sales and “happy to see less of this work”.

But the valuation firm added that notwithstanding this improvement, “we understand that lender and mortgage insurers continue to closely monitor the region, indicating to us that the region remains vulnerable as owners struggle with mortgage payments and living costs”.

HTW says its prediction that the central coast market in 2012 would be the year of first-home buyers and investors proved accurate.

“At the half-time oranges break, we saw this as being correct and at the full-time siren, this appears confirmed.

“Once again, sales in the sub-$400,000 category accounted for a majority of the property sales on the central coast.

“This confirms reports from real estate agents that first home buyers and investors are sustaining the market,” says HTW.

Realestate.com.au has over 4,000 listings on the central coast, but only one property advertised as a mortgagee sale – a four-bedroom house set on a 6,700-square-metre semi-rural block in Fountaindale listed with $700,000 hopes through Debbie Montgomery of McLachlan Partners Long Jetty.

The property's asking price has been reduced from $749,000 after failing to sell at auction in November. RP Data records show the property was available for rent in October at $1,600 per week.

Realestate.com.au records 28 mortgagee-in-possession sales since the start of the year.

HTW says there was a “distinct level of neutrality” about the central coast property market in 2012, with the “odd surprise, but no headline grabbing record sales or bargains”.

“At this point, we are a little way short of having confirmed figures for the year, but with the information available, we have concluded that it has been a year of consolidation and possibly getting back into a cycle of values that might remind us of years past.

“These were good times when plans and budget could be made without too many reviews,” says HTW.

The central coast, the ninth largest urban area in Australia, consists of two local government areas – City of Gosford and Wyong Shire.

HTW reports a 2.1% drop in dwelling sales in Gosford sales over the previous year with the median values down by about 2.3% during this period.

In the more volatile unit market, Gosford sales numbers were up by about 4.6%, with the median value falling by 3.8%

There was more sales activity in Wyong, with dwelling sales up by almost 6%, but with a fall in median value of around 1%.

Wyong unit sales were also up by an encouraging 1.7%, but the median sale price fell by close to 4%.

“The worry here is the 30% fall in vacant land sales, but with slightly higher median value," says HTW.

“A reduction in land sales in the Wyong LGA of 30% is better than the previous year, but indicates the statistics are correct when a slowing of building activity is mentioned. We look forward to seeing how this will change with the new first home buyer’s [$15,000] scheme for new dwellings coming into play."

As with weaknesses at the prestige end of the Sydney housing market, HTW notes that apart from Wyong land sales, the other segment that again shown the least activity during 2012 include were dwellings priced over $1 million.