A report showing a slump in Wagga house prices doesn’t quite tell the whole story.
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The Domain Regional House Price Report, compiled by chief economist Doctor Andrew Wilson, showed the median house price had fallen by 4.9 per cent since June. It equated to a 2 per cent fall in the past two years.
However, the market forces of supply and demand might be partly to blame for the result. Builders and investors had reported strong growth in new home construction and data from the Australian Bureau of Statistics (ABS) showed more than $125 million was spent on 447 new homes in the past year.
Dr Wilson said Wagga had been an “underperformer in terms of regional results”, blaming the local economy and unemployment for the numbers.
“The local environment tends to be key to price movements and fewer jobs in Wagga are clearly working their way into the reduced demand for housing,” he said.
“Wagga has had a strong market for a while and now has a sense of consolidation, so it’s moving in an opposite direction to Orange, which was underperforming.”
According to Dr Wilson’s report, Orange grew 6.1 per cent in the past quarter to a median house price of $350,500.
Data from the Department of Employment showed Wagga had an unemployment rate of 3.3 per cent in June, up slightly on the March figures but still lower than the past two years. Orange’s unemployment rate was 5.5 per cent in June, casting doubt on Dr Wilson’s argument.
Fitzpatricks Real Estate director Andrew McLeod said the past quarter had been tough with wet weather and elections dampening sales activity, but his data gave a different result to Dr Wilson’s.
“We’ve found a 6.25 per cent growth in the median house price in Wagga between July 2015 and June 2016,” Mr McLeod said.
“Our data shows the median house price as $340,000, but it’s tough to blanket the whole city. Some parts are up by 10 per cent.”
The Fitzpatricks results are in line with information from Australian Property Monitors’ PriceFinder tool, which showed Wagga outperforming Orange, Albury and Dubbo.
Dubbo’s unemployment rate in June was 3.8 per cent while Albury’s was much higher than the rest of the region at 8.3 per cent.