A NEARLY 30 per cent jump in Wagga house building approvals last financial year could be repeated as pent up demand and continuing low interest rates drive good times in construction.
According to the latest annual retrospective analysis of the Wagga property market by Fitzpatricks Real Estate, the city council approved 493 residential buildings in the 2015-16 financial year, an increase of 29.3 per cent over the previous 12 months.
Fitzpatricks director, Richard Fitzpatrick, said it was his guess the following year’s approval rate would be similar, but would then ease because the high growth rate was not sustainable.
Mr Fitzpatrick said Wagga’s strong population growth – it increased by 897 in 2015-16 and is forecast to reach 80,410 in 20 years if the current growth rate of 1.4 per cent is maintained – was a major factor behind the boom.
“It comes back to population growth,” he said.
“If you have another 800 or 900 people a year that is more than 300 dwellings needed each year.”
There was a 10 per cent increase in house sales and a 6.25 per cent rise in the median house price to $340,000 in 2015-16.
Prices and sales have dipped since July, but that has been blamed on short-term factors, such the wet and cold winter delaying the traditional spring sales upswing.
Already, there has been a bounce back, according to Mr Fitzpatrick, with his firm selling 10 houses in the past week.
“Ten in a week is a very good figure when last financial year there were 1137 houses sold in Wagga,” Mr Fitzpatrick said.
Mr Fitzpatrick said a low 2.18 per cent residential rental vacancy rate augured well for property investment for the third year in a row.
Tatton was Wagga’s most expensive suburb in which to buy, according to Fitzpatrick’s sales, with a median house price of $495,000.
It was followed by Boorooma ($425,000) Bourkelands ($415,000), Lloyd ($409,000) and Gobbagombalin ($395,000).
The five cheapest suburbs were Mount Austin ($228,500), Ashmont ($233,500), Tolland ($237,500), Kooringal ($295,000) and Glenfield Park ($309,500).
These prices compare to $621,000 for NSW and $1.022 million for Sydney.
The average weekly rent for a house in Wagga last financial year was $330, up 3.125 per cent, while the average rent for a home unit was $260, up 4 per cent.
Wagga households spent 31.1 per cent of their income paying back their mortgages compared to the state average of 37.18 per cent. Some 322 residential blocks were sold in Wagga last financial year, up 18 per cent.