Magann O’Rourke Loader Property Valuers and Consultants Port Macquarie (MOLP) can clearly see in latest statistics that sales rates have improved significantly at most residential subdivisions in the area, driven by improved sentiment and record low interest rates. Subdivision projects that have been quiet or even dormant for some time, are now progressing with new stages.
There has been increasingly strong demand for residential property under $450,000 for up to a year now with more expensive property remaining quiet. In recent months, sentiment appears to be improving for more expensive housing stock as well.
Whilst sales rates and time on market have improved in the residential sector, this has not yet flowed through to higher prices, although we would expect this will be a possibility over the next 12 months given market conditions.
Retail property in the Port Macquarie area has struggled in recent years, along with retail property across the board in Australia. Whilst there is no formal tracking of vacancies in Port Macquarie, anectodal evidence suggest that vacancies may have increased in the retail sector as tenants struggle under the weight of lower consumer sentiment, increased internet sales and generally sluggish economic activity. Rental levels have generally remained stable, however incentives are likely to be required to attract tenants, especially in more fringe locations. There have been few benchmark sales in order to obtain a view on Investor sentiment. Based on sales in other areas, we would expect that yields/capitalisation rates for retail property should be in the vicinity of 8% to 10%, although a strong tenant on long lease terms may show tighter yields. With low interest rates, a lower dollar and improved sentiment we feel that the retail market may slowly recover over the next 12 to 18 months.
The industrial market in Port Macquarie is sluggish for sales and leasing and this has been the case for a number of years. Despite the slow activity, in our view rental and property values appear to have stabilised after falling due to the effects of the Global Financial Crisis. There have been a number of transactions for sales and leasing in the last 12 months, although some of these properties may have been on the market for a significant period of time. In our view, we expect generally sluggish conditions to continue in this market although values will remain stable. Most transactions are driven by owner occupiers with little investor interest or activity.
The market for office space has been sluggish for sales and leasing. There are no formal tracking of vacancies although we believe the vacancy level to be fairly stable. Some specialist sectors such as Medical premises have shown strong growth in areas that are rapidly developing as Medical precincts. This includes Lord Street and Highfields Place near the Port Macquarie Base hospital. The largest employer in town, Essential Energy, has been downsizing in recent years and has potential to flow through to increased vacancies over the next 12 -18 months. The new Charles Sturt University Campus may also have an impact as this tenant moves from its existing commercial premises to relocate to the campus. Overall we see this market as being generally stable, although there are some downside risks as a result of the potential impacts from major space users such as Essential Energy.