Mudgee continues run as NSW regional hotspot

Mudgee has confirmed its hotspot status with house prices increasing 17.22% over the year ending January 2013, the biggest price growth of all regional New South Wales areas, according to Residex.

The median house price in the area is now $299,500, with prices increasing 9.46% per year over the last 10 years. Prices increased 1.99% for the year ending January 2012.

Rents increased 16.13% over the last year to $360, giving yields of 6.28%.

And sales figures increased 15.09% to 497 sales.

It’s the second time Mudgee has hit the headlines recently, after being declared the top-performing NSW housing market in September last year.

The historic area is in the central west of New South Wales, 270 kilometres north-west of Sydney.

As a wine growing district with more than 40 wineries, the town attracts holiday makers and has a well-established hospitality sector.

The gold rush town has kept many of its heritage buildings with a number of historical buildings on the state heritage list.

It also benefits from nearby mining activities with six nearby resources projects tipped to open in the next three to five years.

“We’re in the fortunate position where we have quite a bit of mining nearby but not on our doorstep so we have the economic benefits but not the cosmetic problems with mining,” local agent Bruce McGregor from Raine & Horne told Property Observer.

“We have a strong history of investment. We’re fortunate to have pushed first-home buying 25 years ago and once you start that it flows and flows. Our investment in new homes has been driven by outside investors to some extent. The benefits of depreciation on a new home and government assistance has appealed to people from outside our area.

He says most of the vacant rental properties on the market right now are furnished serviced properties which cater to cyclical contract workers on nearby mine sites. He says their rental books show a vacancy rate at around 3%.

A two bedroom home at 8 Gladstone Street (pictured below) on 727 square metres has just sold for around $255,000. It last sold for $73,500 in 2001, according to RP Data.

Agent Scott Fittler from Raine & Horne Mudgee says the property could rent for $320 $340 per week, giving a potential gross rental yield of 6.93%.

And a four bedroom house at 162 Denison Street (pictured below) on 1,036 square metres is listed for $375,000. It last sold for $317,000 in 2010 according to RP Data.

Agent Chandelle Woods from Professionals Mudgee says the property has a rental potential of $395 per week, giving a potential gross rental yield of 5.48%.

Meanwhile, the Blue Mountains had a bad year, with house prices dropping 2.14% in the year to January 2013, the biggest drop in regional New South Wales. They fell 0.2% in the previous year. Rents have stayed flat while sales numbers dropped 3.47%.

But long term statistics have confirmed the New South Wales Central Coast as the worst performing rural housing market in Australia over the last 10 years.

House prices grew just 1.6% per year on average over the last decade, growing just 0.31% in the year ending January 2013.