Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Ken Purvis from First National Real Estate Bathurst expects the property market to strengthen for the remainder of 2011, on the back of a steadying market over the first half of the year, mainly as a result of expected growth in investor activity. “However, housing affordability, the threat of interest rates increasing, reducing consumer confidence and tight lending criteria from major banks will serve to moderate the market to some extent in the coming six months,” Mr Purvis said in the network’s Property Outlook 2011 Mid Year Update released this week. “Bathurst’s close proximity to Sydney should see house prices trend upwards, with increases of between 1 and 5 per cent. “A shortage in rental properties will see apartment/strata property prices in the region also trend upwards by between 1 and 5 per cent, while land stock shortages will see land prices increase by between 5 and 10 per cent.” Mr Purvis said he believed the rental market is expected to strengthen, with vacancy rates tightening, decreasing by between 1 and 5 per cent and weekly rents trending upwards, increasing by between 5 and 10 per cent as a result of demand outstripping supply. According to Mr Purvis, investors are expected to represent the strongest growth in activity for the Bathurst region. “Investor activity is expected to increase by between 10 and 20 per cent, driven by low available rental stocks and increased demand resulting from the growth attributed to the Charles Sturt University increasing their dental clinic, and the close proximity to Cadia mines,” Mr Purvis said. “The rental sector in Bathurst has always been in high demand, however with the mining increase it now has a high return on all rental properties with an overall a shortage in investment properties. “However, investors will monitor closely and be wary of changes to negative gearing and other tax reforms – which may impact on their levels of interest.”
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 Purvis 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 Purvis considers Stamp Duty should be abolished altogether, as it would stimulate the market and 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 Purvis said. “And any talk of abolishing negative gearing should cease immediately, as any changes to negative gearing may prove detrimental to the real estate industry.” Lower immigration levels would certainly impact on the property market – but impacts could be both positive and negative according to Mr Purvis. “Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices. However, existing infrastructure is sagging under the pressure of the current population,” Mr Purvis said.” 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,” Mr Purvis said. “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
For further information or to receive a copy of the 2011 Property Outlook, Ken Purvis, Principal from First National Real Estate Bathurst, on 02 6332 9444