Lake Macquarie City Local Government Area (004) · The Lake Macquarie City Council area is located in the Hunter Region of New South Wales, only 90 kilometres north of Sydney. It

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Final Report 2015

Lake Macquarie City Local Government Area

(004)

Submitted: November 5 2015

Preston Rowe Paterson Final Report

1

Table of Contents

1 Executive Summary ............................................................................................................................. 2

1.1 LGA Overview 2 1.2 State & Local Government Legislation for Lake Macquarie City Council LGA 3 1.3 Market Overview and Sales of Particular Interest 3 1.4 Significant Issues and Developments 3 1.5 Significant Value Changes 5

1.5.1 Summary of Valuation Changes to Residential Land 5 1.5.2 Summary of Valuation Changes to Industrial Land 5 1.5.3 Summary of Valuation Changes to Commercial Land 5 1.5.4 Summary of Valuation Changes to Rural Land 6

2 Disclaimer – Purpose of this Report .................................................................................................. 7 3 LGA Overview ...................................................................................................................................... 7

3.1 Location of the District 7 3.2 Principal Towns 7 3.3 Main Industries 9 3.4 Significant Retail Centres 9 3.5 Types of Residential Development 10

4 State & Local Government Legislation for LGA ........................................................................... 10 5 Market Overview and Sales of Particular Interest ....................................................................... 12 6 Significant Issues and Developments ............................................................................................ 30

6.1 Significant Developments – From Prior to Current Annual Valuation 30 6.2 Significant Developments – From Prior to Current Local Government Council

Rating Valuation 31 7 Significant Value Changes .............................................................................................................. 33

7.1 Significant Value Changes – From Prior to Current Annual Valuation 33 7.2 Significant Value Changes – From Prior to Current Local Government Council

Rating Valuation 35 8 Overview of the Quality Assurance Process ................................................................................ 35


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1 Executive Summary

1.1 LGA Overview

The Lake Macquarie City Council area is located in the Hunter Region of New South Wales, only 90

kilometres north of Sydney. It is conveniently located 20 minutes from the Newcastle CBD and 40

minutes to the Hunter Valley Wine Country. The Lake Macquarie City LGA has a total land area of

787.4 km². It connects with Newcastle City LGA in the north, Wyong Council LGA in the south, and

Cessnock in the west.

Lake Macquarie City Council is home to one of the biggest salt water lakes in Australia with a

circumference of 174km and about twice the size of Sydney Harbour. To the east there is 11km of

coastline with four patrolled beaches. To the west is the Watagan Mountains incorporating 13

forests.

Lake Macquarie is a desirable place to live and work and it is the fastest growing city in the Hunter

and one of the largest cities in NSW. It accounts for 36% of the Lower Hunter population.

78,707 properties were valued this year with a total land value of $22,307,322,977.

The Lake Macquarie City Council LGA comprises Residential, Rural, Commercial, Industrial,

Infrastructure, Environmental, Waterways and Public and Private Recreation zones.

78,707 properties were valued at the Base Date of 1 July 2015, and valuations are reflective of the

property market at that time. Previous Notices of Valuation issued to owners for the Base Date of 1

July 2013.

The Lake Macquarie City LGA property market has experienced increases in values broadly across

all sectors aside from Protection and Recreation zones (which only comprise less than 1% of total

LGA property value). Total land values increased by around 12% in Base Year 2015 and an overall

rise of around 19% since the last General Valuation Year.

Residential land has been the strongest market segment, increasing by around 13% in base year

2015 and overall by 21% over the two years since the 2013 General Valuation Year. Business zoned

land has also performed well, rising by almost 5% in 2015 and overall 9% over the past two years.

The next best performing segment was Non-urban which increased by 10% over the past year and

around 18% over the past two years.

Valuation changes in the LGA and percentage changes between the Council Valuation years of 1

July 2013 and 1 July 2015 and the Land Tax Valuation year of 2014 are as follows:


3

Zone Zone Code

Number of

Entries

2015 Total Land

Values

Prior Annual

Valuation (2014)

%

Change

Prior Local

Government

Valuation (2013)

%

Change

Residential R1, R2, R3 70,253 19,251,778,361$ 17,014,048,428$ 13% 15,950,046,827$ 21%

Rural

RU2, RU3, RU4,

RU6, R 1,460 607,760,540$ 551,349,150$ 10% 514,749,510$ 18%

Commercial B1, B2, B3, B4, B7 2,074 1,091,742,626$ 1,005,945,820$ 9% 970,742,430$ 12%

Industrial IN1, IN2, IN4 845 436,953,830$ 414,533,110$ 5% 412,211,330$ 6%

Infrastructure SP1, SP2, SP3 496 153,455,874$ 149,533,754$ 3% 151,206,324$ 1%

Environmental E1, E2, E3, E4 2,085 607,031,735$ 580,617,442$ 5% 557,396,581$ 9%

Public Recreation RE1, RE2 1,266 140,030,961$ 141,758,027$ -1% 138,136,150$ 1%

Waterways W1 191 3,105,600$ 3,105,600$ 0% 3,063,100$ 1%

Undetermined/Z

one change

/Village Z 33 14,625,950$ 14,626,949$ 0% 14,265,949$ 3%

Protection P 2 573,000$ 573,000$ 0% 593,000$ -3%

Open Space O 2 264,500$ 253,800$ 4% 250,000$ 6%

Totals 78,707 22,307,322,977$ 19,876,345,080$ 12% 18,712,661,201$ 19%

Properties Valued and Total Land Value

1.2 State & Local Government Legislation for Lake Macquarie City Council LGA

Lake Macquarie Local Environmental Plan 2014 gazetted on 12 September 2014 with

commencement 28 days after gazettal, on 10 October 2014. There has been seven (7)

amendments since the previous valuation.

All zone and value changes have been accounted for in the final values.

The Lake Macquarie City Council is governed by the Lake Macquarie Local Environmental Plan

2004 and the Lake Macquarie Local Environmental Plan 2014. The LEP 2014 is based on the

standardised Local Environmental Plan prescribed by the New South Wales Legislation.

1.3 Market Overview and Sales of Particular Interest

Preston Rowe Paterson Newcastle & Central Coast (PRP) have undertaken significant analysis of

the Lake Macquarie City Council district property market to provide an accurate and reliable basis

of valuation. 1,542 sales have been analysed to enable the establishment and verification of land

values as at 1 July 2015. These analysed sales also support the grading across components.

Analysed sales reports are provided to Land and Property Information on a consistent basis

throughout the year. The added value of improvements are also analysed to enable the accurate

deduction of land values. PRP undertakes this process using the Paired Sales Approach and the

Replacement Cost Approach.

In analysing sales before or after 1 July it is sometimes necessary to adjust the contract price in

terms of market movement, depending upon particular market segment activity. In the Lake

Macquarie City LGA this year, sales and resales of residential zoned properties generally indicated

increasing values throughout the year. Rental and commercial rental analysis demonstrated a

similar trend, although the latter category is particularly difficult to interpret definitively due to lower

levels of evidence amongst highly varied properties and lease conditions.

1.4 Significant Issues and Developments

Boolaroo Industrial Area

The Boolaroo industrial area has had a further reduction in land value at the end of Munibung

Road where vacant land sales during 2015 have provided evidence of further reductions in land

value due to contamination’/electricity easements etc.


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Wyee Residential – Amendment 61

Comprises allotments known as the Wyee West Paper Subdivision which were rezoned from rural to

residential when Amendment 61 to the Lake Macquarie LEP was undertaken.

Following the rezoning there has been a significant number of speculative purchases within the

area.

Waterfront/Waterfront Reserve Allotments Lake Macquarie

There was a significant variation in factors applied throughout the waterfront components within

Lake Macquarie. Whilst land values increased overall by just over 7% for the period this was not a

homogenous increase.

Variations reflect the disparities in amenity, water access, locality demographics, previous land

value movements, accessibility and allotment aspect.

Beaches at Catherine Hill Bay

Rosecorp’s development Beaches at Catherine Hill Bay has been selling fast with 85% of the off the

plan lots sold for Releases 1, 2 and 4. 250 lots out of 294 have now sold with prices ranging from high

$200,000s up to low $600,000s.

Trinity Point

Trinity Point is a residential and commercial estate located on the shores of Lake Macquarie.

Stages 1-4 of the residential subdivision are completed and Johnson Property Group have approval

to develop the remaining stages of 98 residential lots and 23 medium density housing.

Belle Apartments Development

The $35 million Belle Apartments development at Belmont is nearing completion. The development

will comprise ground level retail shops with 110 1, 2 and 3 bedroom apartments over four levels

above.

Vivid Apartments Development

The seven storey Vivid Apartment development has commenced construction at Charlestown.

Comprising of apartments and retail space, this development is within walking distance to the

popular Charlestown Square.

Waterview Apartments Project

Ten years after it was first approved, the Waterview Apartments project is set to resume building.

This significant project has been waiting for the right time to be released. Waterview will comprise

four three storey buildings on the corner of Victoria and Walter Streets with views of Belmont Bay.

Lead Abatement Strategy Areas (LAS)

The lead contamination issues in the Boolaroo, Argenton and Speers Point area from the former

Pasminco Aluminium Smelter continue to receive high media coverage. Following discussion with

our District Valuer it was decided that the best way to manage the LAS areas would be to group

them into R2 and R3 specific components. This required identification of the affected properties

and changes to four components.


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LEP Conversion and Amendments

The new standardised Local Environmental Plan for Lake Macquarie was gazetted on 12

September 2014 with commencement from 10 October 2014. Since the introduction of the LEP we

have successfully managed seven amendments, several which have required the rezoning of a

large number of properties.

Little Pelican – Component EXX

Component EXX is used to accommodate just 5 entries that are all the same defined size of about

148.8sq.m. All entries are waterfront land facing the Swansea Channel within Lake Macquarie.

All of the land is reclaimed swampland located on Crown Land, with individuals given tenure

through long term permissive occupancies. These entries are interesting in that they are both

14G/14I Basis; being both heritage listed and permissive occupancies over Crown land.

1.5 Significant Value Changes

1.5.1 Summary of Valuation Changes to Residential Land

Changes since previous General Valuation (2013)

In Lake Macquarie LGA, residential zoned land has increased by 21% over the two year period

since the last General Valuation Year. The residential property market has seen a strong upswing

and sustained period of demand over the past two years.

Changes since previous Valuation Year (2014)

Of the two year increase outlined above, 13% has been recorded during the previous base year.

The upswing described above has gathered momentum over the past 12 months in particular as

confidence in the market has consolidated. Of the 137 residential zoned components, 133

recorded increases during the past 12 months with the most significant being the Toronto, Fennell

Bay, Blackalls Park and Fassifern areas which increased by approximately 25 – 29%. Only one

component (WFQ) comprising waterfront lands recorded a fall in values. This property class has not

experienced the same level of demand as the broader residential market.

1.5.2 Summary of Valuation Changes to Industrial Land


In Lake Macquarie LGA industrial zoned land has increased by 6% over the two year period since

the last General Valuation year. The industrial property market has shown stability and slight

upward movement in value with demand increasing over the past 2 years.


Of the two year increase outlined above, 5% was recorded during the previous base year.

Confidence in the industrial sector has increased more strongly over the past 12 months. Of the 13

industrial zoned components, all recorded increases during the past 12 months with the most

significant being ISE Edgeworth which increased by 7%, ISG Cardiff/Boolaroo and ISK Toronto.

1.5.3 Summary of Valuation Changes to Commercial Land


In Lake Macquarie LGA, commercial zoned land has increased by 12% over the two year period

since the last General Valuation Year. The commercial property market has seen a moderate

upswing and sustained period of demand over the past two years.


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Of the two year increase outlined above, 9% has been recorded during the previous Base Year.


confidence in the market has consolidated. All the 16 commercial zoned components, recorded

increases during the past 12 months.

1.5.4 Summary of Valuation Changes to Rural Land


In Lake Macquarie LGA, rural zoned land has increased by 18% over the two year period since the

last General Valuation Year. The rural property market has seen a moderate upswing and

sustained period of demand over the past two years


Of the two year increase outlined above, 10% has been recorded during the previous Base Year.


confidence in the market has consolidated. Most of the rural zoned components, recorded

increases during the past 12 months except for 3 components which held steady and the small

component EXX Permissive Occupations Pelican which was regraded down.


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2 Disclaimer – Purpose of this Report

The purpose of this report is to describe the process and considerations for the 1 July 2015 Valuation

of Lake Macquarie City Council Local Government Area. The report has been produced on behalf

of the Valuer General.

The land values have been specifically made for rating and taxing purposes. Land values

produced as part of this process should not be used for any other purpose without the specific

agreement of the Valuer General.

Land values must have regard to specific requirements and assumptions in rating and taxing

legislation. Consequently these valuations may vary from market levels.

The land values have been determined using a methodology prescribed by the Rating and Taxing

Valuation Procedures Manual. The Manual allows mass valuation methodologies that involve

assessing large numbers of properties as a group to be utilised where appropriate. Mass valuation

methodologies are by their nature likely to be less accurate than individually assessed valuations,

however are utilised worldwide for rating and taxing purposes to deliver valuations within an

acceptable market range.

Town planning, land use and other market information contained in this report has been compiled

based on enquiries undertaken during the valuation process. Third parties should make their own

inquiries into these details and should not rely on the contents of this report.

The Valuer General disclaims any liability to any person who acts or omits to act on the basis of the

information contained in this report.

More information on the valuation process is available from the Land and Property Information

website at www.lpi.nsw.gov.au/valuation.

3 LGA Overview

3.1 Location of the District

The Lake Macquarie City Council area is located on the east coast of Australia in the Hunter

Region of New South Wales. It is only 60 minutes to Sydney on the M1, 10 minutes to Newcastle, 25

minutes to the Port of Newcastle, 35 minutes to Hunter Valley wine country and 40 minutes to

Newcastle Airport.

The Lake Macquarie City LGA has a total land area of 787.4km². It connects with Newcastle City

LGA in the north, Wyong Council LGA in the south, and Cessnock in the west.

3.2 Principal Towns

The centrepiece of the Lake Macquarie district is a lake about twice the size of Sydney Harbour,

recognised as one of the largest coastal saltwater lakes in Australia. Around the lake and along

the coastline are relaxed town centres and villages.

Town centres are located at Swansea, Belmont, Charlestown, Cardiff, Glendale, Warners Bay,

Mount Hutton, Toronto, and Morisset.

http://www.lpi.nsw.gov.au/valuation


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Swansea is the southern entrance to the city. With a population of 4,638, it is situated in a unique

and beautiful location, boasting both lakeside and beach living. The commercial centre has 98

operating businesses with Coles, Woolworths and McDonalds being the major businesses.

Belmont is the major service centre for the east of the lake offering a diverse range of retail,

financial and professional services. With a population of 6,476, Belmont is the sailing capital of the

Hunter. The commercial centre has 246 businesses operating and provides services to more than

50,000 residents of Lake Macquarie. Major businesses include Coles, Woolworths and Aldi.

Charlestown Is the central business district of Lake Macquarie and a prominent major regional

centre characterised by the Charlestown Square retail shopping centre. New high-rise

development and major bus interchange adds to the diverse business mix of retail, entertainment

and business services. Major businesses include Myer, Target, Coles, Woolworths, Big W, Rebel Sport,

Centrelink Regional Office, Department of Housing, Reading and Hoyts Cinema Complexes with

476 businesses operating in the commercial centre. Charlestown boasts a population of 11,725.

Cardiff is renowned for outstanding manufacturing industries, automotive sales and support services

and is a significant employment area that supports approximately 15,000 jobs. The Cardiff Industrial

Park is home to many leading manufacturers. The commercial centre houses 107 businesses with

Woolworths, Aldi and Bi-Low being the major businesses. Cardiff is conveniently located on the

main northern rail link and is serviced by public transport. The population of Cardiff is 5,796.

Warners Bay has a main street which is opposite the lake providing a vibrant and cosmopolitan feel

to the centre. The suburb boasts superior housing, a strong retail sector, and the Lake Macquarie

Performing Arts Centre. The nearby Hillsborough Road Industrial Precinct services the homemaker

market and specialist manufacturing. In the commercial centre there are 139 businesses

operating, including restaurants and cafes that support the relaxed lifestyle. Home to a population

of 7,009 Warners Bay is a popular suburb with residents and visitors.

Mount Hutton is a large village centre conveniently located for surrounding suburbs. Lake

Macquarie Fair, Mount Hutton’s retail centre, contains two supermarkets, one major discount

department store and over 55 speciality stores. Major businesses include Coles, Woolworths, Big W

and Best and Less. Mount Hutton offers it population of 3,107 an affordable lifestyle that is central

to many of the city’s facilities.

Glendale provides excellent facilities and a commercial centre that is fast becoming the logistics

services and transport hub of the city. It successfully combines industrial and commercial property

with residential and recreational areas. Glendale is home to Stockland Glendale, an eight-screen

cinema complex and the Hunter Sports Centre, which offers world-class facilities. Ninety four

businesses operating in the commercial centre including Woolworths, Target, Coles, Kmart, JB Hi-Fi

and Bunnings Hardware. Glendale has a population of 2,997.

Toronto is just 10 minutes from the M1 Motorway and a perfect location for business to service the

Central Coast, Newcastle and the wider Hunter region. With 210 businesses operating it is the

commercial hub of western Lake Macquarie. Major businesses include Woolworths, Coles, and Aldi

Toronto offers its residents a beautiful relaxing and safe lakeside community. Toronto is home to

5,161 people.

Morisset is designated as an emerging regional centre, with population projections indicating a

doubling of population over the next 25 years. Conveniently located on the main north rail link,

Morisset is only 60 minutes by the M1 Motorway to Sydney’s northern suburbs. Morisset is the major

commercial and retail centre of southern Lake Macquarie, complimented by a large industrial park

and manufacturing industries. The commercial centre has 114 businesses operating, including

Coles, Woolworths, Bunnings and Sanitarium Health Foods. Morisset is nestled between the

Watagan Ranges and the lake and has a population of 3,108 residents.


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3.3 Main Industries

Lake Macquarie’s economic strength is built upon its diverse landscape and natural resource base,

with key industries developing out of timber, agriculture, water and minerals.1

Manufacturing and Engineering

Development of industrial lands, investment in major roads and freight rail infrastructure, new

research and development facilities, skills development and training and the rollout of the National

Broadband Network are together paving a dynamic future for manufacturing and engineering in

Lake Macquarie City. With close to 15,000 people employed locally in advanced manufacturing,

this technology driven industry sector is recognised as a significant provider of jobs in the city.2

Retail and Commercial

The City has 10 town centres serving as hubs for the local communities that circle Lake Macquarie.

Each of these centres has its own uniquely identifiable and community-based retail and

commercial precincts. Geographic dispersal makes each independently viable and successful,

and facilities access to economically and socially diverse markets around the Lake.

In addition to the town centres is the City’s hub for commercial and retail activities, Charlestown.

Home to GPT’s $840 million major regional shopping centre, Charlestown Square, as well as a

significant number of commercial and mixed-used developments.3

Tourism

Lake Macquarie is blessed with an abundance of natural beauty. Nature-based tourism, from

beach, to lake, to forest, is supported by a range of high-0quality accommodation, food and

entertainment options.4

3.4 Significant Retail Centres

At 17.7% retail trade has the highest proportion of employment in Lake Macquarie relative to other

industries. The supermarket and grocery store sector employs the most residents making up 3.04%

of total employments.

Lake Macquarie boasts some of the Hunter’s busiest centres, along with a variety of shopping strips

in each town centre. Belmont and Toronto are examples of town centres offering comprehensive

shopping facilities, featuring both national retail outlets and stores with their own unique style.

Charlestown Square is a major retail centre. It contains a concentration of mixed use, business,

higher order retailing, employment, professional and social services and generally includes civic

functions and facilities. It has public transport interchanges to provide a high level of public

transport service and accessibility. A redevelopment has significantly expanded the Centre, almost

doubling its size to 88,000m². With major stores including Myer, Target, Big W, Woolworths, Coles

and Reading Cinemas, along with around 280 specialty stores including JB Hi-Fi, Rebel Sport, City

Beach, Best & Less. It also has approximately 3,500 parking spaces.

Stockland Glendale features over 50,000m² of retail space, including more than 70 stores, a host of

national chains and an eight-screen cinema complex. Major stores include Woolworths, Coles,

Target, Kmart, Aldi and Greater Union.

1 http://www.dantia.com.au/

2 http://www.dantia.com.au/engineering-and-manufacturing/

3 http://www.dantia.com.au/retail-commercial/

4 http://www.dantia.com.au/tourism/


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Lake Macquarie Fair, Mount Hutton is a 15,000m² centre with easy parking for 850 cars and a strong

fresh food offer. Major retailers include B W and Woolworths and over 43 specialty retailers

including the Reject Shop, Noni B, Millers, and Bakers Delight.

3.5 Types of Residential Development

Lake Macquarie City LGA is characterised by scattered villages surrounding the lake and larger

regional centres close to transport links and major commercial centres.

Residential development has traditionally been towards the three bedroom family home, with the

2011 Census indicating that in Lake Macquarie 86.4% of all homes were this configuration,

compared to 69.5% in New South Wales.

Planning reviews and controls have been encouraging medium density housing development

around the main regional centres of Belmont and Charlestown with apartment buildings selling

well.

Lake Macquarie is also home to a high percentage of the aging population and retirement villages

are numerous throughout the LGA.

4 State & Local Government Legislation for LGA

The Lake Macquarie LEP classifies land into certain zones depending on the use of the land. These

zones allow properties in same zones to be managed in components and valued by mass

valuation methodology.

Lake Macquarie Local Environmental Plan 2004 gazetted on 19 March 2004. This plan covers

certain areas of Lake Macquarie which are deferred matter.

Lake Macquarie Local Environmental Plan 2014 gazetted on 12 September 2014 with

commencement 28 days after gazettal, on 10 October 2914. There has been seven (7)

amendments since the previous valuation.

All zone and value changes have been accounted for in the final values delivered to Land and

Property Information.

The Lake Macquarie City Council is governed by the Lake Macquarie Local Environmental Plan

2004 and the Lake Macquarie Local Environmental Plan 2014. The LEP 2014 is based on the

standardised Local Environmental Plan prescribed by the New South Wales Legislation.

The Plan aims to make local environmental planning provisions for land in the Lake Macquarie City

Council LGA in accordance with the relevant standard environmental planning instrument under

Section 33A of the Act.

Planning documents guide Council when determining proposed development within the city. There

are three levels of planning instruments that apply within a LGA. These are:

Local Plans (including LEPs and Development Control Plans (DCPs)

Regional Plans

State environmental Planning Policies (SEPP)

The LEP is prepared to guide planning decisions and control development through land use zoning

and development standards.


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Lake Macquarie Development Control Plan 2014 (DCP) applies to the entire Lake Macquarie LGA

except the deferred matter areas at Garden Suburb, Whitebridge and Catherine Hill Bay where

DCP No 1 remains effective.

The particular aims of this Plan are as follows:

To make local environmental planning provisions for land in Lake Macquarie City in accordance

with the relevant standard environmental planning instrument under Section 33A of the Act

To recognise the importance of Lake Macquarie City and its waterways and the coast as an

environmental, social, recreational and economic asset to Lake Macquarie City and the Hunter

and Central Coast regions

To implement a planning framework that protects areas of significant conservation importance

while facilitating development and public facilities in appropriate areas that are accessible to a

range of population groups to accommodate Lake Macquarie City’s social and economic needs.

To promote the efficient and equitable provision of public services, infrastructure and amenities.

To facilitate a range of accommodation types throughout Lake Macquarie city so that housing

stock meets the diversity of community needs and is affordable to as large a proportion of the

population as possible.

To apply the principles of ecologically sustainable development.

To encourage development that enhances the sustainability of Lake Macquarie City, including the

ability to adapt to and mitigate against climate change.

Lower Hunter Regional Strategy (LHRS)

The LHRS is a 25 year strategy that provides a planning framework to guide local planning in the five

local government areas of Newcastle, Lake Macquarie, Port Stephens, Maitland and Cessnock.

The LHRS provides for 115,000 new homes to cater for a projected population growth of 160,000

people and plans for up to 66,000 new jobs for the Lower Hunter Region. The LHRS identifies the

following for Lake Macquarie:

o Charlestown as a regional centre

o Morisset and Glendale/Cardiff as emerging regional centres

o 36,000 new dwellings

o Significant employment increases for the area including growth at Glendale/Cardiff and

Charlestown

Lifestyle 2030 Strategy (LS2030)

Adopted by Council in 2013, the LS2030 provides the direction for the future urban and rural land

use pattern based on achieving the principles of sustainability.

LS2030 provides the long-term direction for the overall development of the city and describes

council’s high level policies for managing private and public development in Lake Macquarie.

LS2030 is a long-range land use strategic plan and policy document.

State Environmental Planning Policies (SEPPs)

State significant sites are areas with State or regional planning significance because of their social,

economic or environmental characteristics.


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They are typically large sites owned by the State government that have:

The ability to be redeveloped to achieve State government policy objectives, particularly

those relating to delivery of housing and jobs

State or regional environmental conservation or natural resource significance, or

State or regional cultural, heritage or historical significance.

These sites can play a particularly important role in increasing the supply of housing and employment

in key locations, and improving housing choice and affordability.

Amendments to the zones and planning controls for State significant Sites can be made through a

State Environmental Planning Policy. In most cases, the State Environmental Planning Policy will

amend the relevant local environmental plan.

Lake Macquarie City Council’s website contains more information of the SEPPs that affect the LGA.

5 Market Overview and Sales of Particular Interest

Residential

During base year 2015, an increase of 13% was recorded for residential zoned lands. The residential

property market has seen a period of sustained demand over recent years. The upswing has

gathered momentum over the past 12 months in particular as confidence in the market has

consolidated.

Historically low interest rates has combined with other factors such as a subdued share market to

make investment in property an attractive proposition. The capital growth demonstrated over the

recent past has further encouraged investors (including international), as returns on residential

property have become comparatively stronger than other investment options. The ongoing

strength of the rental market has also continued to underpin investor confidence and returns during

this period.

Of the 137 residential zoned components, 133 recorded increases during the past 12 months with

the most significant being the Toronto, Fennell Bay, Blackalls Park and Fassifern areas which

increased by approximately 25 – 29%. Only one component (WFQ) comprising waterfront lands

recorded a fall in values. This property class has not experienced the same level of demand as the

broader residential market.

In terms of developing areas, Morisset is clearly experiencing a period of rapid growth and

demand, as evidenced by sales of englobe land in the area. A number of development site sales

have occurred during base year 2015, demonstrating significant value increases and a broader

confidence in the fundamentals of the area. Significant new housing is being constructed with

strong take-up levels evident. Cooranbong and Cameron Park are also continuing to meet the

demands for new affordable housing in the region with solid demand and increasing land values.


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SID: 358442 PID: 163425, 163426, 163427,163429

Address: 64, 68, 70, 72 Warners Bay Road Warners Bay

Sale Price: $4,100,000 Analysed LV at contract: $3,500,000

Zone: R2 Component: ADJ – Warners Bay

Analysis:

Improved although considered to be a development site. Tar sealed road. Services available to

boundary. Irregular shaped holding comprising 5 contiguous lots with 4 lots fronting Warners Bay

Road. The site is near level to road with only very gentle undulations and is predominantly cleared.

Split zoned with one large RU4 lot of 9,332.6m² in area and the balance R2 zoned. (A split of roughly

60/40). Ready access off Warners bay Road. Adjoins a seniors living medium density development

to the east and low density residential surrounding. To the rear is riparian corridor.

Improved by three dwellings which are of nominal value only in terms of holding income/risk

minimisation while development plans are finalised. Sold by Knight Frank Brisbane with a lapsed DA

for a 120 bed aged care facility. While this DA has lapsed, the market is highly likely to attribute

value to this in terms of site de-risking value and studies conducted which can be leveraged

upon for any new DA. As such, a value has been attributed to this. The selling agent, Russell Allison

confirmed as much, indicating that the buyers are confident of obtaining development approval

for an aged care facility having done their due diligence in this regard. Considered to be

representative of the market.


14

SID: 366181 PID: 118950

Address: 34 Thomas Street Cardiff

Sale Price: $600,000 Analysed LV at contract: $600,000

Zone: R3 Component: AZB – Cardiff/Glendale/Edgeworth

Analysis:

Vacant land. Tar sealed kerb & guttered. All services available. Irregular shaped corner site, set to

road level before falling moderately from the Thomas St frontage to the rear with a slight cross fall.

Some medium level vegetation exists across approximately two thirds of the site. Located within

very close (opposite) proximity to commercial properties including local shops and other key

amenities such as rail and major roads. Surrounding development predominantly comprises well

established low density dwellings along with more modern medium density villa developments.

Small scale medium density development site sold without DA approval by PRD Nationwide at

auction. An estimated yield of 8 units would reflect $75,000 per unit which is at the upper end of

expectations. Considering this site was marketed for sale at $400,000 in 2013, this sale evidences a

spike in the market for such development sites. Although at the extreme upper end, this sale is

considered to be representative of the market.


15

SID: 366923 PID: 171307

Address: 7 Stockton Street Morisset


Zone: R3 Component: AZI – Morisset/Bonnells Bay/Cooranbong

Analysis:

Improved. Tar sealed frontage along Stockton Street with unsealed access off partially formed

Goodwin St. Electricity and telephone connected with on-site septic. Predominantly cleared, near

regular shaped corner lot with minor undulations. Located approximately 1 kilometre north west of

the Morisset Town Centre with all key amenities within reasonable proximity. Surrounding

development comprises a mixture of similar rural dwelling/development sites and recently

constructed low to medium density housing.

Improved by a circa 1950's single level weatherboard and metal dwelling considered to add

nominal value only as holding income/risk mitigation value. A DA was lodged in April for a 26 lot

subdivision which would reflect circa $53,000 per lot. Sold by Ray White Newcastle and is

considered to be representative of the market which is currently experiencing unprecedented

demand in this developing area.


16

SID: 368684 PID: 159318

Address: 20 Goonda Prom Wangi Wangi


Zone: R2 Component: AMD Wangi Views

Analysis:

Vacant land. Heavily vegetated. Near rectangular shaped residential allotment falling below the

road frontage. Good view corridors. The land is located within an established residential location

and is fully serviced.


17

SID: 362320 PID: 155026

Address: 47 Lake View Road Kilaben Bay


Zone: R2 Component: AFR Toronto/Coal Point, Kilaben Bay

Analysis:

Vacant land. The land is slightly irregular in shape and falls below the road frontage to the rear

boundary, with a general easterly crossfall. It is fully serviced. The front section is cleared and

represents a standard residential block, the rear is zoned E2 and is mostly uncleared. Lake View

Road is tar sealed with concrete kerb and guttering. Surrounding development comprises

residential and rural lifestyle allotments improved with a variety of improvements.


18

Commercial

The City has 10 town centres serving as hubs for the local communities that circle Lake Macquarie.

Each of these centres has its own uniquely identifiable and community-based retail and

commercial precincts. Geographic dispersal makes each independently viable and successful,

and facilities access to economically and socially diverse markets around the Lake.5

Over the last two years, Newcastle and the Lower Hunter have seen a stabilisation in values across

most non-residential sectors. This has resulted in a more positive outlook for property. Vendors are

still required to meet the market but there is more consistent purchaser demand, especially for

investment property, although certain sectors of the industrial market, eg heavy engineering, are

still recovering from the cessation of the resources boom.

Overall, we are seeing greater buyer confidence from both investors and owner occupiers, which

may be the result of the flow on impacts of interest rate cuts in 2012 and 2013, no interest rate

increases in 2014, and a reduction of 25 basis points in February and May 2015 to 2.0% and no

change to the rate since, as well as a more positive general market perception due to widespread

news media articles depicting a strengthening residential property market.

The results of recent commercial auctions indicate that prime commercial property at the lower

end (< $10,000,000) is finding a market with surprisingly firm yields, yet second tier property struggles

to find a market. Prime properties are those strong “blue chip” tenants on lengthy leases or

properties which are presented in good condition, being in prime locations with good exposure

and access to transport links which have a growth potential.

The emergence of self-managed super funds has seen strong interest in investment properties at

the lower end, especially in the low interest environment where there are few alternative high yield

investments available.

This is also evident in the higher price range in regional areas (> $10,000,000) where yields for office

oriented properties are showing a weighting around 8% to 9% for good quality properties with

acceptable lease profiles. Whilst we are aware of yields below 7%, this generally only applies to the

Sydney metropolitan area or to a particular asset class that can offer very long term leases (15

years plus) to national tenants, ie supermarkets, fast food, service stations, etc; but, again, this

premium decreases outside the metropolitan area.

Commercial land, comprising of zones B1 through to B7, recorded an annual increase of 9% for

Base Date 2015. Increases were fairly uniform across the zones.

Many of the fringe neighbourhood shop type areas did not demonstrate significant value

increases, although underlying land values have naturally increased as a function of rising

residential values surrounding.

5 http://www.dantia.com.au/retail-commercial/


19

SID: 365238 PID: 108621

Address: 57 Main Road Boolaroo


Zone: B1 Component: BTA – Neighbourhood Centre – Whole LGA

Analysis:

Sale of ex-service station site. The land is zoned B1 Neighbourhood Centre. The land comprises two

adjoining separate lots, with the boundaries between the lots sitting between the office building

and the workshop building on the site. The land sits slightly above the road alignment, and falls to

the rear. Corner allotment with a frontage to Main Street and Fifth Street.

The property is currently rented with two tenancies, an automotive workshop comprising of three

car bays and a small office used in conjunction with the hardstand area used as an automotive

car yard.

Sold by local real estate agent - Bill Shepard Real Estate. Purchased showing about a 9% yield on

the purchase price, with the agent noting the property is likely to have some residual

contamination from previous use as a service station. Purchaser thinks the cost of remediation if the

use is changed would be about $100,000 as a worst case scenario. The property can continue to

operate with the current uses and tenancies until the site is redeveloped possibly in the future.

This was apparently a former Caltex service station. Caltex sold the site to the current vendor and

he has just sold the property again. Caltex would be regarded as the polluter. Note hypothetical

difference between what the market pays for a contaminated site like this - operating and our

hypothetical valuation under the provisions of 6A(2) that in essence ignores the contamination

while the property is in use.


20

SID: 337248 PID: 3272826

Address: 195 Main Road Speers Point


Zone: B1 Component: BTA – Neighbourhood Centre – Whole LGA

Analysis:

Erected upon the land is a circa 1950's part two level brick, fibro and metal former RSL club building

with adjoining carpark. Surrounding development comprises of commercial premises and

residential dwellings. Sold by Cushman And Wakefield Sydney. Advertised as development site

although no DA, nominal value attached to improvements.


21

SID: 366939 PID: 153216

Address: 142 Brighton Avenue Toronto


Zone: B4 Component: BTI Mixed Use – Toronto/Morisset

Analysis:

Vacant land. Regular shaped inside lot. Moderate rise to rear, steady easterly crossfall. Partly

uncleared. Tar sealed kerb and guttered street. Electricity, water, sewer, telephone available.

Surrounding development comprises detached dwellings and medium density residential flat

buildings. Shopping centre car park opposite and private hospital at rear. Considered to be

representative of the market. Sold by Knight Frank, Newcastle.


22

SID: 339649 PID: 136607

Address: 64 Burwood Street Kahibah


Zone: B1 Component: BTA - Neighbourhood Centre –Whole LGA

Analysis:

Vacant land. Regular shaped lot which rises moderately to rear. Tar sealed kerb and guttered

street. Electricity, water, sewer, telephone available. Rear lane access.

Surrounding development predominantly comprises of detached housing. Sold at auction by Ray

White Lake Macquarie Newcastle.


23

Industrial

Lake Macquarie City has a diversity of industries and a broadly qualified and experienced

workforce. In addition to identified target industries, the following sectors form an integral part of

the City’s economy: mining, power generation, and construction and trades. Industrial areas

where vacant land is still proving popular and available include Cameron Park, Morisset and

Bennetts Green which provides a convenient location for strata industrial bays/units. Further to the

east, in more established smaller industrial areas, most sales are improved. There was one vacant

land sale occurring at Caves Beach.

The broader industrial sector over the past two years has seen high levels of investment and supply.

In 2014 industrial investment was at record high levels with supply increasing during 2015. High

investment and supply has led to positive conditions for tenants with incentives starting to increase

in some markets.

According to latest research from Colliers International, the industrial sector is experiencing

declining rents and firming yields, similar to the commercial sector. Domestic investors accounted

for up to 70% of purchases in 2014, up from 40% in 2011. Supply of industrial land is still strong with

tenant demand now being dominated by transport and logistics, retail and wholesale trade with a

decrease coming from manufacturing businesses.

Lake Macquarie and Newcastle LGA have not realised some of this strength due to the close ties

the region has to the mining sector. With many industrial businesses relying on this sector for growth,

some have experienced a down turn since the contraction of mining activities in the region,

however the broader industry outlook is more positive with industrial upturn now being

experienced.

Smaller industrial shed market is showing strong activity. Sales activity has been greater for those

units and buildings up to 400m2, whilst larger buildings are requiring competitive rents and

incentives. Owner occupiers are buying many buildings using self managed super funds offering

them a strong investment with a good tenant and a friendly landlord.


24

SID: 32559 PID: 3495201

Address: 109 Stenhouse Drive Cameron Park


Zone: IN1 Component: ISW – Cameron Park

Analysis:

Improved with two industrial warehouses and office space on an area of 1.188 hectares within

Cameron Park Industrial Estate in close proximity to M1. Ground improvements include extensive

landscaping, metal wire fencing and concrete hardstand area. Leased to long term secure tenant

Veolia Environmental Services for 10 years + 5 year option to 2020.


25

SID: 339590 PID: 140126

Address: 23 Strathmore Road Caves Beach


Zone: IN2 Component: ISH – Caves Beach

Analysis:

Vacant allotment of 951m2, fully cleared in popular local industrial estate. Perimeter fencing in

place. Near level topography. Cleared site. Tar sealed kerb and guttered street. Electricity, water,

sewer, telephone available. Shows $305/m2.


26

SID: 372165 PID: 117753

Address: 7 Pennant Street Cardiff


Zone: IN2 Component: ISG Cardiff/Boolaroo

Analysis:

Improved with metal clad warehouse/workshop facility with gantry crane, ground floor showroom

and offices on 7968m2 allotment in established Cardiff Industrial Estate. Leased to long term secure

tenant O’Donnell Griffin on 6 year lease + 6 year option to renew.


27

Rural Locations within the LGA

Rural land recorded an annual increase of 10% for Base Date 2015. The upswing described above

has gathered momentum over the past 12 months in particular as confidence in the market has

consolidated. Most of the rural zoned components, recorded increases during the past 12 months

except for 3 components which held steady and the small component EXX Permissive Occupations

Pelican which was regraded down.

SID: 363612 PID: 171150

Address: 228 Tobins Road Mandalong


Zone: E3 Component: EEW West LM >5HA

Analysis:

Vacant land. The land is irregular in shape. The majority is zoned E2 and is uncleared. The land rises

steadily to steeply to the north from a predominantly cleared valley adjoining the road. The land is

partially serviced. Tobins Road is unsealed. Surrounding development comprises a mix of rural

properties with varying intensity of use. The land is improved with a small older style cabin. Sold

mortgagee in possession by Ray White Morisset. Market sale.


28

SID: 366972 PID: 171327

Address: 77A Yarrawonga Park Road Yarrawonga Park


Zone: E2 Component: EEI West LM >5HA

Analysis:

Vacant land. Slightly irregular parcel of gently undulating, uncleared land. Includes about 1010 m2

of residential zoned land fronting Yarrawonga Park Road which is a bitumen sealed road with

gravel verges. Nearby development comprises older style dwellings to the west and north with

rural/residential properties to the south and east.

Sold by Avery, Toronto after having been on the market since 2011 with a number of agents.

Market sale.


29

SID: 359674 PID: 3781905

Address: 28 Cockburns Lane Cardiff Heights


Zone: RU4 Component: RRE Primary Production > 5HA

Analysis:

Vacant land. Cockburns Lane is a narrow tar sealed lane with grassed verges. The allotment is

situated at the end of the lane. It is irregular in shape and falls moderately from the frontage

through to the rear boundary which adjoins the railway line. The property is fully serviced and is

cleared. The immediate surrounding development comprises a mixture of detached residential

dwellings of varying age, style and construction.

Considered a market transaction. Sold by Dowling Real Estate


30

6 Significant Issues and Developments

6.1 Significant Developments – From Prior to Current Annual Valuation

Below is a summary of significant Development Applications. Most of these Development

Applications are for developments permissible within the current zoning therefore no special

consideration is required:

Property

PID Address Suburb DA Date Description

111450 ,

111451 52 & 60 Ada St Cardiff 4/12/2014

DA 1085/2013 - Medical Centre, Shop, Restaurants or Cafes, Recreational

Facility and Subdivision

137446 83 Wallsend St Kahibah 6/03/2015 DA 1827/2014 Multi dwelling housing - seven units and strata subdivision

110079 31 Hayden Brook Rd Booragul 25/02/2015

DA 1298/2014 Staged development - 11 X Seniors Housing Dwellings (Self

contained), 8 X Affordable Housing Dwellings and associated subdivision

99970 9 George St Belmont 23/02/2015 DA 820/2014 Multiple Dwelling Housing

118089 McDonalds Quarry 108 Reservoir Road Glendale 20/04/2015

DA 1488/2014 Rehabilitation of a Dormant Quarry - Eastern McDonalds

Quarry

3364755 44 Wilson Road Mount Hutton 6/05/2015

DA 236/2015 Childcare Centre - Earthworks, Retaining Walls, Landscaping,

Rainwater Tank

3629126 15 Templar Place Bennetts Green 13/05/2015 DA 231/2015 Light Industrial

3671636 125 Alton Road Cooranbong 19/05/2015 DA 307/2015 291 Residential lot Subdivision

3619109 113 Munibung Rd Boolaroo 20/05/2015 DA 239/2015 Light Industy

118089 106 Reservoir Road Glendale 1/06/2015 DA 1614/2014 Earthworks - Remediation of Quarry (McDonalds Quarry)

3481065,35

55813,

3349592,

3349590

71, 41, 49 Trinity Point Drive Public Reserve

69C Trinity Point Drive Morisset Park 22/06/2015

DA 1503/2014 Marina and associated building, car parking, landscaping and

stromwater infrastructure

3637068 55 Caves Beach Road Caves Beach 23/06/2015 DA 1376/2014 Mixed Use Development

3629122 5 Templar Place Bennetts Green 10/07/2015 DA 691/2015 Light Industry and ancillary office

162944 36 Queen Street Warners Bay 13/07/2015 DA 726/2014/A Multiple Dwelling Housing

120542 273 Charlestown Road Charlestown 14/07/2015

DA 746/2015 Service Station (Alterations to existing building and

replacement of underground fuel storage tanks.

3495693 100 Oakdale Road Redhead 15/07/2015 DA 1489/2014 Rehabilitation of a Dormant Quarry - Oakdale Quarry

3729477 108A Munibung Road Boolaroo 22/07/2015 DA 515/2015 Industrial Warehouse

124676 93 Pacific Highway Charlestown 31/07/2015 DA 54/2015 Service Station and Restaurant

2960586,

3634777 617 & 615 Freemans Drive Cooranbong 27/07/2015

DA 714/2014 Utility Installation - Sewage Treatment Plant and Water

Recycling Facility

117303 7 Newcastle Street Cardiff 12/08/2015

DA 641/2015 Multiple Dwelling Housing and Subdivision (Retaining existing

house and create two additional dwellings)

171297 5 Stockton Street Morisset 9/09/2015

DA 277/2014 Small Lot Housing, Dual Occupancy - attached, multiple

dwelling housing and subdivision

3513909 48 Trinity Point Drive Morisset Park 17/09/2015 DA 907/2015 Eight Dwellings and Subdivision (small lot housing)

Boolaroo Industrial Area

The Boolaroo industrial area has had a further reduction in land value at the end of Munibung

Road where vacant land sales during 2015 have provided evidence of further reductions in land

value due to contamination/electricity easements etc.

Wyee Residential – Amendment 61

Comprises allotments known as the Wyee West Paper Subdivision which were rezoned from rural to

residential when Amendment 61 to the Lake Macquarie LEP was undertaken.

They do not possess any essential infrastructure (sealed roads, drainage, sewer, water, power or

telecommunications) which would allow council to consent to dwellings on these allotments.

Council has been considering charging individual land owners section 94 contributions to develop

this area.


31

Following the rezoning there has been a significant number of speculative purchases within the

area. The sale of PID 170028 highlights this. This has been sold twice throughout the year – initially in

March for $94,000 then resold in October for $50,000. In both instances it was marketed through a

local agent who has advised that the initial purchase was undertaken as a speculative play and

was considered in excess of market value at the time of purchase. This has been verified with the

resale price of $50,000.

Talks were undertaken with the District Valuer prior to application of a factor to this component and

it was agreed that as this and a number of other sales were speculative in nature and considered

out of line to factor the component to reflect the general increase within the greater established

residential area rather than the full application of the increase implied by factors on speculative

sales.

Waterfront/Waterfront Reserve Allotments Lake Macquarie

There was a significant variation in factors applied throughout the waterfront components within

Lake Macquarie. Whilst land values increased overall by just over 7% for the period this was not a

homogenous increase. Component factors varied from 1.23 in Valentine to 0.94 in Coal Point.

Nor were factor increases within some components uniform across all allotments with significant

handcrafting undertaken in certain areas. Component WMB for example comprised of 692

allotments across six suburban localities with varying factors applied from 1.17 in Fishing Point to 1.05

in Wangi Wangi and parts of Dobell Drive in Wangi Wangi factored in the 0.9’s.

Variations reflect the disparities in amenity, water access, locality demographics, previous land

value movements, accessibility and allotment aspect.

LEP Conversion and Amendments

The new standardised Local Environmental Plan for Lake Macquarie was gazetted on 12

September 2014 with commencement from 10 October 2014. The previous contractor delivered

final values prior to the commencement of the new LEP. As part of hand over of the roll the

previous contractor changed the roll to the new zone template without having regard to value

changes caused by the zone changes.

This LEP conversion process not only converted zones but also other planning layers including, but

not limited to, building heights, lots size and FSRs. Therefore the roll was handed over with the

changes to components and zones but no amendments to values based on these changes.

PRP undertook an entire review of these changes and worked through amendments to values and

other issues.

Since the introduction of the LEP we have successful managed seven amendments, several which

have required the rezoning of a large number of properties. Amendments included:

A deferred matter in Warners Bay commercial precinct was amended to consolidate B3

zonings.

Forty nine properties in a “Paper Subdivision” at Killingworth were rezoned from R2 to E2.

Rezoning of several R3 properties in Charlestown to RE1.

6.2 Significant Developments – From Prior to Current Local Government Council Rating Valuation

Trinity Point is a residential and commercial estate located on the shores of Lake Macquarie.

Once fully developed, Trinity Point will include 189 residential lots and medium-density housing, 150

tourism and residential apartments, a 188-berth marina, restaurants, cafe and outdoor dining


32

facilities. The project also includes a 300-seat conference centre, serviced meeting rooms, public

boardwalks and other community facilities.

Stages 1-4 of the residential subdivision are completed and Johnson Property Group have approval

to develop the remaining stages of 98 residential lots and 23 medium density housing.

The Belle Apartment development at Belmont is nearing completion. The $35 million development

will comprise ground level retail shops with 110 1, 2 and 3 bedroom apartments over four levels

above.

The residential units have been aimed at the more affordable level of new units available in close

proximity of the Belmont retail area and will be in contrast to the higher priced apartments situated

close to the waterfront.

The majority of the units have been sold off the plan with the general price level of the 1 bedroom

units below $300,000, 2 bedroom units below $350,000 and 3 bedroom units below $450,000.

Rosecorp’s development Beaches at Catherine Hill Bay has been selling fast with 85% of the off the

plan lots sold for Releases 1, 2 and 4. 250 lots out of 294 have now sold with prices ranging from high

$200,000s up to low $600,000s. The next stage due for sale, will be Release 5 in February 2016. Civil

works are still underway with Montefiore Road currently closed for construction.

The seven storey Vivid Apartments development has commenced construction at Charlestown.

Comprising of apartments and retail space, this development is within walking distance to the

popular Charlestown Square.

Proving that the latest real estate wave is not restricted to Newcastle, the backers of the Waterview

Apartments project at Belmont have dusted off their consent and are set to resume building.

This is a significant project that has been waiting for the right time to be released to the market and

that time has arrived.

Waterview will comprise four three-storey buildings on the corner of Victoria and Walter Streets with

views of Belmont Bay. Each of the 20 apartments will feature three bedrooms and high-end

finished.6

Lead Abatement Strategy Areas (LAS)

The lead contamination issues in the Boolaroo, Argenton and Speers Point area from the former

Pasminco Aluminium Smelter continue to receive high media coverage.

Significantly Lake Macquarie City Council previously considered residential lands within the defined

LAS area to be complying development if a residential dwelling or extension was to be

constructed. This policy changed during 2014 with complying development requiring a site

investigation with a site clearance required from a suitably qualified consultant prior to approval for

a dwelling or addition.

The media have reported several articles were owners applied for dwelling and/or extensions and

were required to go through the process of site clearance. These site clearances required

specialist consultant advice and often the removal of about 100 mm of topsoil and replacement of

soil and turf. It was reported there was one case of up to $60,000 in additional costs.

We considered that these properties were now subject to a further financial burden that need

additional attention.

Following discussion with our District Valuer it was decided that the best way to manage the LAS

areas would be to group them into R2 and R3 specific components. This required identification of

6 Newcastle Herald, 4 November 2015


33

the affected properties and changes to four components. Scrutiny of these areas to date does

not indicate any adverse effects to land values from the contamination. Additional sales analysis

was undertaken to identify any adverse effects on values associated with Council’s change in

policy and the media attention.

Overall for the two components created within the LAS area both showed increases since the last

base date of over 20% with primary factors applied to the component of around 1.18 (18%

increase). These two components were amongst the components showing the highest increases

in Lake Macquarie.

Little Pelican – Component EXX

Component EXX is used to accommodate just 5 entries that are all the same defined size of about

148.8sq.m. All entries are waterfront land facing the Swansea Channel within Lake Macquarie.

All of the land is reclaimed swampland located on Crown Land, with individuals given tenure

through long term permissive occupancies. These entries are interesting in that they are both

14G/14I Basis; being both heritage listed and permissive occupancies over Crown land.

Originally there were 14 permissive occupies with cottages within the location of little Pelican, and

over time this has been reduced to just 5. It is well known locally that it is Crown Land’s intention to

incorporate all of the remaining 5 permissive occupancies holdings back into publicly owned and

operated lands for public access and public use.

The permissive occupancy agreements have proven to be onerous in that these properties cannot

be rented or transferred. Any breaches of the agreements have resulted in the tenure being

surrendered. The process of terminating these permissive occupancies has to date taken many

years.

Based on the very restrictive nature of the permissive occupancies and no possible market for re-

sale of these properties whatsoever; we have reduced the 2015 land values to reflect the use of

the land as a very basic cottage only.

7 Significant Value Changes

7.1 Significant Value Changes – From Prior to Current Annual Valuation

The residential segment of the market has shown the most significant price growth within Lake

Macquarie since the 2014 Base Date. Residential property is far and away the largest and

influential segment of the local Lake Macquarie property market, based on a segmentation by

zone.

Generally Lake Macquarie includes many suburbs that would be regarded within the Lower Hunter

as affordable, with a large proportion of residential zoned property having land values under

$200,000.

Investors have been particularly active over the last year within the lower priced suburbs

throughout Lake Macquarie. These have tended to show the highest returns for investors.

The availability of negative gearing to investors and increasing numbers of foreign investors buying

property within Lake Macquarie have all resulted in the recorded price growth that was evidenced

from this year’s Annual Program. Investors are progressively paying more money for property

investments, particular over the last year.

We can report that some of the lowest graded values within Lake Macquarie have shown the

highest increases in values/prices. Properties that are the most affordable, with associated problem

issues such as flooding, main roads, poorly maintained dwellings and property amongst housing

commission, for example, have all shown the greatest increases – starting from a low base.


34

Higher valued/priced properties within Lake Macquarie, including the many waterfronts, prestige

locations near beaches and rural properties have increased also; but at a lower rate.

This has caused a phenomenon known as a convergence or compression of values to occur across

the entire district where the price differential between the better quality properties and the lower

quality properties is reduced over time.

This year has also seen historically low interest rates continue for yet another year, coupled with

inflation that is lower than last year and considered under control by the RBA. Most economic

commentators are pointing to stable interest rates or even the prospect of further interest rate

reductions over the next 12 months.

At the Government level, both the State and Federal Governments are heavily investing in

infrastructure spending. This investment on roads, rail and other infrastructure facilities has been very

pronounced within Newcastle LGA, with little being spent directly into Lake Macquarie; but is

having a flow on effect within Lake Macquarie, with much of the workforce for these projects

residing within the suburbs of Lake Macquarie.

Within Lake Macquarie there are a small number of Coal Mining operations. The pronounced

downturn in investment spending and general cost cutting within the Coal Industry within Lake

Macquarie has been geographically noticeable in terms of layoffs of staff; however Lake

Macquarie has not experienced the drop-off in prices/values that many of the districts further up

the Hunter Valley in the outer hunter have been experiencing.

This mostly is because Lake Macquarie has a more diversified business base than some of the

districts further up the valley and out in the Hunter Valley Coal Chain.

New building and renovations has been increasing with Lake Macquarie, and generally replacing

any reduction in investment by mines, but this trend of spending on building is far more

pronounced within the neighbouring district of Newcastle. Again Lake Macquarie is a supplier of

labour into the higher growth centre of Newcastle LGA, so receives flow on benefits in term of

aggregate demand for property owners in Lake Macquarie.

Further investment spending by both government and private industry is expected within Lake

Macquarie. While Newcastle is about to experience historic high levels of investment by both

government and developers, especially within the CBD, Lake Macquarie to a much lesser extent is

also forecasting more urban development and far less government spending. Lake Macquarie will

be a beneficiary of this spending being so geographically close to Newcastle.

Ongoing annual verification and identification of entries requiring corrections within Lake

Macquarie’s values for 2015 were significantly affected by zoning changes to numerous properties

with many increases due to increased development potential of higher zones, and many

decreases due to decreased development potential of lower zones.

Some examples of significant Annual Value Changes:

ISG Cardiff/Boolaroo – as mentioned due to site specific electricity easements and contamination

issues, several sites were significantly reduced on the back of 2014 significant reductions.

ISH Caves Beach experienced an overall increase due to having one vacant land sale as

evidence in this traditionally closely held area. This was an opportunity to increase values, although

they were conservatively increased and did not rise to the level of the one sale at 23 Strathmore

Road. Land Value rose from $232,000 in 2013 (General Valuation Year) and 2014 to $280,000 in

2015.

ISB Bennetts Green, 25 Stratham Street experienced a significant decline in value going from

$114,000 (2013) and $128,000 (2014) down to $7000 in 2015. As part of verification, this entry was

identified as being owned by Council with unlikely utilisation so a nominal value was assigned.


35

ISW Cameron Park, 119 Stenhouse Drive experienced a significant increase in value going from

$643,000 in 2013 and 2014 up to $890,000 in 2015. This increase was required due to recent sales

evidence, and to improve grading on an allotment that had historically been kept low.

7.2 Significant Value Changes – From Prior to Current Local Government Council Rating

Valuation

The last General Valuation year within Lake Macquarie was 2013. Two years have passed since

then, with both the last two years being characterised as high growth years in an historical context.

This is coupled with inflation being relatively stable and “under control” over the last two years.

Overall, the last two year period represents the accumulation of values over two very strong growth

years with the economic drivers and complications highlighted in 7.1 still expected to continue over

the coming 2016 annual program.

8 Overview of the Quality Assurance Process

LPI has been provided with a detailed Valuation Analysis Report, which details the Quality

Assurance Process of PRP and outlines that the Verification process and certifies that Land Values

meet all Statistical Measures and Component Data Analysis. In addition, a Quality Statement and

lists of high value and high risk properties is also provided in the Valuation Analysis Report. Checks

have been undertaken to ensure that all properties have been valued land values are consistent

with each other, land value basis’ have been correctly determined and all concessions and

allowances have been supplied. Additionally properties that had land values amended through

the objection or reascertainment process were individually examined to reconcile surrounding land

values and ensure accuracy of the grading of surrounding land values. Benchmarks and

Reference Benchmarks are core elements of the quality assurance processes and are identified

and individually valued in accordance with the Rating and Taxing Procedures Manual Version

6.6.1. Worksheets have been maintained on all properties where calculations are required. We

have also ensured that adjustments and assumptions within the market analysis have been based

on market evidence and have been fully documented and rationalised.

Colin Pugsley

Director

Contract Services Manager

B.Ec, B.Bus(Land Ec), MBA,

FAPI Certified Practising Valuer

Reg No: VAL3315

Preston Rowe Paterson Valuation Analysis Report

36

Lake Macquarie City Local Government Area (004) · The Lake Macquarie City Council area is located in the Hunter Region of New South Wales, only 90 kilometres north of Sydney. It

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