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Caravan Park Market Review - June 2009

Thursday, 08 October 2009 12:05

A number of factors may have contributed to the later start but generally the beginning of each season is contingent upon the weather. This year Queensland has had a lengthy and well publicised wet season whilst the cool change in the southern states that is relied upon to get people travelling took longer than expected.

We do not believe the later start to this season is a reflection of the financial crisis, although come the end of the season we will be in a better position to reflect on this issue. We also do not believe the scraping of Queensland’s fuel subsidy or an improving Australian Dollar will have a great impact on the remainder of the 2009 tourist season. We, along with a number of operators, remain optimistic that the remainder of the season will be buoyant and extend into the traditional shoulder months of October/November.

Promotion of the Industry through the CRVA is excellent at present with the majority of travel shows giving the industry plenty of air time whilst the print media continue to push the industry as an affordable holiday option.

Permanent and Semi Permanent Park Operators continue to report solid performances, however some seasonal workers Parks have had an indifferent start to the calendar year. In the main this section of the industry has been consistent.

 To the Caravan Park Market and buyer confidence has gained considerable momentum since our March 2009 newsletter. A more positive economic outlook combined with the RBA’s aggressive rate cuts (425 basis points over the past 9 months to a 49 year low of 3%) and an easing in the banks squeeze on lending have all contributed. These factors combined have allowed the market to gain traction as is evident with a number of Parks presently on the market now under contract. We would expect this trend to continue to build throughout the remainder of 2009.

Our advice remains the same as in our March newsletter – if you’ve considered selling in the last year or envisage selling in the next 12 months then the time to act is NOW! There’s limited quality product in the market at present and yet as discussed more buyers are starting to flow back into the market as interest rates and yield gaps engender buyer confidence. Therefore those Parks for sale now will have a greater chance of selling as opposed to those competing with an increase in product in the next 12 months – a case of supply and demand.

For any owners wishing to discuss the market at present or for an obligation free appraisal on the value of your Park please do not hesitate to call one of our experienced brokers.