Media release – date ALICE PROPERTY MARKET STEADIES FURTHER FOR 2012 David Forrest from First National Real Estate Framptons expects the Alice Springs property market to remain flat into 2012, although there are some factors that may produce highlights for the year. “The high proportion of government employees in Alice Springs will continue to bolster the market, providing good employment opportunities,” Mr Forrest said in the First National 2012 Property Market Outlook released this week. “However, consumer confidence will be the key determining factor in whether the market improves to any great extent in 2012.” Mr Forrest said continued pessimism amongst buyers kept the market on a downward trend, and he expects this to continue into 2012. “Alice Springs is insulated to an extent from global issues, however, the severity of the global situation makes it unlikely that it will remain completely unscathed,” Mr Forrest said. “There may only be a slight effect from the global economic situation, but the Alice Springs market will continue with relatively stable median prices. “The biggest issue the market faces is the significant reduction in sales numbers which were 60 per cent in the unit market alone, this year. Residential property prices in Alice Springs are expected to remain relatively flat, with the potential for upward and downward movements of up to 1 per cent – depending on what happens with interest rates. “Significant decreases in interest rates will improve consumer sentiment and may help stimulate market activity,” Mr Forrest said. Mr Forrest expects the rental market to remain flat in 2012, although, he says, “vacancy rates in the early part of the year will be subject to seasonal conditions such as employment contracts finishing and new people moving in during the Christmas and New Year festive season. “High demand for good properties will see weekly rents trend upwards, potentially by up to 5 per cent.” According to Mr Forrest, investor activity is expected to increase by between 5 and 10 per cent, driven by interest rate reductions and strong regional employment. “The strongest growth, however, is expected to be from the upgrader segment, due to continued strong employment in Alice Springs,” Mr Forrest said.
“Mount Johns Valley will continue to attract steady interest for vacant lots in the prestige sector of the market.” Interest rates, which will determine what happens in 2012 with the Alice Springs property market, are expected to decrease by up to 5 basis points in 2012, providing a slight kick to the market as the year progresses. The carbon tax is expected to produce higher home prices on its introduction, which may unsettle consumers once again. On the commercial front, sales and leasing have been relatively busy in 2011, says Mr Forrest. “Some significant sales such as an office building in Alice Springs, and a new government office block being built in the CBD catering for growth in the government sector, will impact on the ability of ‘B’ class tenancies’ to attract premium rates,” he said. “First National Commercial’s sale of Jacana House in Darwin for $58 million underscores the demand for A grade, energy efficient commercial buildings in the Territory. “Commercial property prices will remain fairly stable in 2012, following the trend of 2011, although there is potential for some movements of up to 5 per cent.” The anticipated decrease in interest rates may assist the commercial property market in Alice Springs, but banks’ lending criteria will also need to change to have any significant impact. - copy ends – Issued by: First National Real Estate For further information or to receive a copy of the 2011 Property Outlook, David Forrest, Principal from First National Real Estate Framptons, on 08 8952 7833.