Media release – Date BENDIGO PROPERTY MARKET SHOWING SIGNS OF RECOVERY Craig Tweed from First National Real Estate Tweed Sutherland expects the 2012 Bendigo property market to be quite subdued and says while there are encouraging signs, there is still some distance to go. “The current steady market in Bendigo is set to continue moderating in 2012, as a result of improved home affordability,” Mr Tweed said in the First National 2012 Property Market Outlook released this week. The key challenge for the 2012 property market is seen by Mr Tweed as keeping vendor price expectations in line with those of buyers. Significant factors affecting the local property market in the coming six months are lack of consumer confidence and interest rate reductions. “Sale of properties will be dependent on confidence and interest rates holding at a low level,” Mr Tweed said. “Job security will also be a major issue, particularly as it pertains to consumer confidence, weighing heavily on people’s minds especially in the first six months of 2012.” The new hospital development, due for commencement in late 2012, will put pressure on rental stock in the latter half of the year. This, together with State and Local government funded building projects will in turn increase employment prospects and lead to stronger demand for rental and purchase of properties. Property prices in Bendigo are expected to remain flat with movements kept to below 1 per cent. “The economic concerns and share market nervousness will keep consumer sentiment low, resulting in fairly steady property prices, coupled with an over supply of listings at the moment,” Mr Tweed said. “Land prices are expected to trend upwards, with increases of between 1 and 5 per cent due to strong demand, good affordability and lack of supply.” The rental market should see vacancy rates ease, trending upwards with increases of between 1 and 5 per cent as a result of an increasing supply of rental stock coming onto the market. Weekly rent prices are expected to remain flat, with potential movements being kept to below 1 per cent. Mr Tweed expects investors to produce the strongest growth in activity, with increases to be in the vicinity of between 5 and 10 per cent as a result of improved affordability, very liveable city, great lifestyle and proximity to Melbourne. Interest rates are expected to decrease by up to 0.25 per cent, which is expected to stimulate activity to some extent.
An over-commitment by some borrowers will see an increase in default mortgages for the Bendigo region. The carbon tax is expected to have an impact on the property market, further reducing consumer confidence. The Bendigo rural property market is expected to remain fairly steady in 2012 as well, with a possible reduction in land farm prices. “The main issues facing the rural property market in the region is farmer debt levels, and I expect rural properties will continue to appeal to lifestyle buyers in particular,” Mr Tweed said. The Bendigo commercial property market is very steady at the moment, with sale prices holding out very well and yields ranging from between 6 per cent and 8 per cent for quality city properties. “Properties available for lease are moving relatively slowly at the moment,” Mr Tweed said. “The difficult economic times of late will keep commercial property prices stable with very little anticipated change in market conditions. Consumer confidence, interest rates and investor confidence are the key factors impacting on the commercial property market in Bendigo.” Decreasing interest rates are expected to help stimulate the commercial property sector and create more buyer interest into 2012. “Bendigo has or many years had a lack of supply of quality commercial properties for sae, and is a very tightly held commercial sector,” Mr Tweed said. For commercial properties, the carbon tax is considered just hot air, where something more practical is required at the commercial property owner level. Between 1 and 5 per cent of clients seek energy efficient features when looking to lease or purchase a commercial property, with solar power being the most popular energy efficient feature in commercial properties, making them more rentable. Sales of commercial properties are expected to increase in the coming 12 months as a result of businesses seeking to trade up. The office market is the commercial property market sector expected to show the strongest growth over 2012. - Copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Craig Tweed, Principal from First National Real Estate Tweed Sutherland, on 03 5440 9500.