Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Steven Crooks from First National Pacific expects the Avalon property market to soften further for the remainder of 2011, on the back of a falling market over the first half of the year. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,”Mr Crooks saidin the network’s Property Outlook 2011 Mid Year Update released this week. “Housing affordability, the threat of interest rates increasing, reducing consumer confidence and tight lending criteria from major banks will help to moderate the market in the coming six months. “The general economy is expected to see property prices across all segments of house, apartment/strata and land, trend downwards, with any movements kept to a maximum of between 1 and 5 per cent.” Mr Crooks believes the rental market is expected to weaken slightly, with vacancy rates flattening, along with weekly rents. Movements are expected to be around 1 per cent. According to Mr Crooks, investor activity is expected to increase by between 1 and 5 per cent. “This incres will be driven by the excellent value being offered in the market and an increase in second buyer activity, where Upgraders are expected to represent the strongest growth in activity,” Mr Crooks said. The Government’s move to introduce a carbon tax is not supported by First National members, primarily as a result of concerns about the impact on confidence, the economy, saleability of existing housing stock, and values. “However, more customers will seek energy efficient features when looking to buy a new home, due to the rising household energy costs and the challenge of maintaining a healthy home budget,” Mr Crooks said.
“Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property. “Although, this could be an each-way bet, but until the tax is introduced and the impacts felt, it is difficult to predict the outcome on property transactions.” Mr Crooks consides Stamp Duty should be abolished altogether, as it would promote more efficient use of existing housing stocks. “This should only happen as long as the mooted plans for replacing it with other taxes such as a broad-based land tax, including the family home, or death duties are not carried through,” Mr Crooks said. “And any talk of abolishing negative gearing should cease immediately.” Lower immigration levels would certainly impact on the property market – but impacts could be both positive and negative, according to Mr Crooks. “Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices,” Mr Crooks said. “However, existing infrastructure is sagging under the pressure of the current population.” The exclusion of any of these proposed policy changes from the recently announced NSW state budget may be an indication that the Government does not intend to take such matters any further. “It is hoped that the change in NSW government will see some changes in planning policy to enable developers to release more land at a more affordable development cost and with reduced red tape.” “There is, however, a budget loss to be recovered and this may impact on the ability of the new government to effectively move forward with their plans.” - copy ends – Issued by: First National Real Estate Avalon. For further information or to receive a copy of the 2011 Property Outlook, Steven Crooks, First National Pacific, on 02 9973 4888