Sydneysiders love this Central West town - and they're prepared to pay

The house might not be much to look at, but the property in this popular NSW Central West town has everything treechangers are chasing – and they’re prepared to pay top dollar for it.

On offer for the first time in 100 years, ‘Womera’ and ‘Springville’ in Orange, sold for $11.4 million last week – $1.4 million above the reserve.

With 966ha to work with, ‘Womera’ enjoys a reliable 710mm annual rainfall and boasts rich volcanic basalt soils. As well as the four-bedroom brick home, there’s the old manager’s cottage, a bore, five stand shearing shed, two machinery sheds, five silos, steel cattle yards, sheep yards, grain storage shed, 24 paddocks and a double frontage to Weandre Creek.

Next door, ‘Springville’ offers a further 450ha with five paddocks, steel cattle or sheep yards, a shearing shed, machinery shed and Nubrygyn Creek frontage, as well as building entitlement.

While three buyers registered – two locals and another from WA – the eventual buyer was a neighbour from the Euchareena District.

While larger properties such as these are still the outliers in terms of price, Orange has experienced a 30 percent rise in prices for houses in the past 12 months.

McGrath Real Estate Orange and Molong principal Scott Petersen said COVID had accelerated interest in the area, which is about 250km west of Sydney, as more people embraced remote working.

“Orange is an easy drive from Sydney – between three and 3.5 hours or a 40-minute flight – and we get four very distinct seasons here in Orange – Sydneysiders appreciate that,” Mr Petersen said. “Sydney people also love what this region offers – the food, wine and events, the employment from the mining sector, good schools.”

The events calendar is a major drawcard for food and wine lovers, with more than 60 wineries in the region.

Emptynesters and retirees are also drawn by the reliable health services in the region.

“We have the best hospital this side of the Blue Mountains,” he said. “It has all the specialists and a really good oncology unit. The hospital is a very important factor for retirees coming to Orange.”

There has been a substantial increase in the number of Australians earning high incomes who are renting their homes instead of owning them, and this may be another element contributing to higher market demand and continually rising rents, according to new research.

The portion of households with an annual income of $140,000 per year (in 2021 dollars), went from 8 percent of the private rental market in 1996 to 24 percent in 2021, according to research by the Australian Housing and Urban Research Institute (AHURI). The AHURI study highlights that longer-term declines in the rate of home ownership in Australia are likely the cause of this trend.

The biggest challenge this creates is the flow-on effect on lower-income households because they may face stronger competition for a limited supply of rental stock, and they also have less capacity to cope with rising rents that look likely to keep going up due to the entrenched undersupply.

The 2024 ANZ CoreLogic Housing Affordability Report notes that weekly rents have been rising strongly since the pandemic and are currently re-accelerating. “Nationally, annual rent growth has lifted from a recent low of 8.1 percent year-on-year in October 2023, to 8.6 percent year-on-year in March 2024,” according to the report. “The re-acceleration was particularly evident in house rents, where annual growth bottomed out at 6.8 percent in the year to September, and rose to 8.4 percent in the year to March 2024.”

Rents are also rising in markets that have experienced recent declines. “In Hobart, rent values saw a downturn of -6 percent between March and October 2023. Since bottoming out in October, rents have now moved 5 percent higher to the end of March, and are just 1 percent off the record highs in March 2023. The Canberra rental market was the only other capital city to see a decline in rents in recent years, where rent values fell -3.8 percent between June 2022 and September 2023. Since then, Canberra rents have risen 3.5 percent, and are 1 percent from the record high.”

The Productivity Commission’s review of the National Housing and Homelessness Agreement points out that high-income earners also have more capacity to relocate to cheaper markets when rents rise, which creates more competition for lower-income households competing for homes in those same areas.

ANZ CoreLogic notes that rents in lower-cost markets have risen the most in recent years, so much so that the portion of earnings that lower-income households have to dedicate to rent has reached a record high 54.3 percent. For middle-income households, it’s 32.2 percent and for high-income households, it’s just 22.9 percent. ‘Housing stress’ has long been defined as requiring more than 30 percent of income to put a roof over your head.

While some high-income households may aspire to own their own homes, rising property values have made that a difficult and long process given the years it takes to save a deposit. ANZ CoreLogic data shows it now takes a median 10.1 years in the capital cities and 9.9 years in regional areas to save a 20 percent deposit to buy a property.

It also takes 48.3 percent of income in the cities and 47.1 percent in the regions to cover mortgage repayments at today’s home loan interest rates, which is far greater than the portion of income required to service rents at a median 30.4 percent in cities and 33.3 percent in the regions.

Sydneysiders love this Central West town – and they’re prepared to pay

This may be contributing to continually rising weekly rents