An expected influx of workers into Narrandera is likely to accelerate growth in both rental and property prices over the next two years, according to one of the region’s most respected real estate agents.
Both rental and purchase prices have increased steadily in Narrandera over the past decade, at an average rate of around three per cent per year.
The median house value is now $221,143, while average weekly rent is $250. Andrew Pellow, a sales representative at QPL Real Estate, says the rate of growth could jump markedly.
He said prices will likely rise as there could be a lack of accommodation to cater for several hundred employees arriving to work on three solar farm projects in the region in 2019.
One project at Yarabee, which is planned but pending approval, is set to be one the largest solar farms in the world – expected to employee up to 600 workers over the next five years (see page 5 for solar farm story).
“It’s going to put a huge strain on the market. There’s a big question over where we’re going to house these people,” he said.
Mr Pellow said there is already a shortage of quality rentals in Narrandera, with the vacancy rate currently sitting at 1.25 per cent.
“Companies may look to house their workers in Wagga,” he said. “But it would be better for Narrandera if we could accommodate them here, because that way they’ll be spending their money in town.”
“There is a lot of potential accommodation not used at the moment, so I expect rooms will be rented out when workers arrive”.
According to the Australian Bureau of Statistics Census 2016, around 15 per cent of private dwellings in Narrandera are unoccupied, which is much higher than the overall NSW figure of 10 per cent.
Narrandera Mayor Neville Kschenka said the influx of new workers will be a challenge for Narrandera Shire Council in terms of housing, but a real positive for property owners.
“Anyone who has a property available should get it ready… it’s going to be a great opportunity to get a tenant for five years”.
Mr Pellow agreed that it’s happy days for property owners and those ready to purchase something.
“You cannot go wrong with an investment property here.”
Mr Pellow said buying in Narrandera is essentially the opposite of what would be homeowners experience in Sydney.
While rents have risen, property prices remain affordable compared to most other areas in the state.
So the rates of return for investors are huge – currently averaging around eight per cent per year.
“It’s a hell of a lot cheaper to buy than rent in Narrandera… you can still get a decent property for say $160,000.”
“It’s a good time to buy a house to live in yourself, too. If you can save up for a deposit and lawyer fees, then you’ll find your mortgage will be less than rent.”
Some 116 properties were sold in Narrandera over the last financial year, up more than 15 per cent from the previous year.
“Generally you get a 100 residential properties sold in any given year,” Mr Pellow said.
Investors make up about 35 per cent of all buyers, though Narrandera remains off the radar from foreign investors who have taken a big slice of the Sydney market.
“A lot of investors here are actually locals. But we’re getting people coming from Sydney, Wollongong and others areas too… but the foreign investors tend to only be interested in the really big stuff.”
Around 41 per cent of residents in Narrandera own their house outright, which is much higher than the overall figure for Australia – 31 per cent.
Some 28 per cent of Narrandera residents are paying off their mortgage and 26 per cent are renters, according to the Australian Bureau of Statistics 2016 Census.
Both weekly rental costs and average mortgage repayments in Narrandera are about half the national average.