Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Philip Madirazza from First National David Kay expects the Belmore/South West Sydney property market to further steady for the remainder of 2011, on the back of a moderating market over the first half of the year due to the short supply of available stocks. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Mr Madirazza said in the network’s Property Outlook 2011 Mid Year Update released this week. “However, housing affordability, the threat of interest rates increasing, reducing consumer confidence and tight lending criteria from major banks will continue to impact the market in the coming six months.” In the main, property prices across all segments (house, apartment/strata and land) are expected to remain relatively flat, with any movements kept to a maximum of between 1 and 5 per cent. “Rapid growth over the last two years is keeping pressure on apartment/strata property prices which are in short supply and may see some prices increases of up to 5 per cent,” Mr Madirazza said. “Land and house prices will remain flat.” Mr Madirazza believes the rental market is expected to remain strong, with vacancy rates tightening and trending downwards, decreasing by between 1 and 5 per cent, while weekly rents will trend upwards by between 5 and 10 per cent. “A shortage of available rental accommodation and ongoing demand will underpin any rent increases,” Mr Madirazza said. Mr Madirazza expects investor activity to increase by between 1 and 5 per cent, driven by low interest rates, and increasing weekly returns. “However, it is the first home buyers that are expected to represent the strongest growth in activity for the region,” Mr Madirazza 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. “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 Madirazza said. Mr Madirazza considers Stamp Duty should be abolished altogether, as it would deliver on the promise of eliminating indirect taxes such as these when the GST was introduced. “The mooted plans for replacing it with other taxes such as a broad-based land tax, including the family home, or death duties should not be carried through and any talk of abolishing negative gearing should cease immediately,” Mr Madirazza 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 Madirazza said. “The planned changes to allow higher density will have a positive impact for growth in the Belmore/South West area and allowing higher density in and around the town’s centre promotes employment opportunities and small business opportunities which are all positive for the local economy. “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, Philip Madirazza, First National David Kay on 02 9750 9244