Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Barry Booth from First National Real Estate Coffs Coast expects the Coffs Harbour property market to steady for the remainder of 2011, on the back of a falling market over the first half of the year as a result of uncertainty in economic, market and global conditions. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Mr Booth said in the network’s Property Outlook 2011 Mid Year Update released this week. “Housing affordability, the threat of interest rates increasing, reducing consumer sentiment and tight lending criteria from major banks will help to moderate the market in the coming six months.” In the main, property prices across all segments (house, apartment/strata and land) are expected to remain flat, with any movements kept to between 1 and 5 per cent. “The lack of consumer confidence, job uncertainty and reduced numbers of first home buyers will underpin property prices through to the end of 2011,” Mr Booth said. “The rising cost of building is keeping land prices flat, bringing them into line with affordability.” Mr Booth believes the rental market is expected to remain strong, with vacancy rates remaining steady or potentially trending downwards, decreasing by up to 10 per cent, with weekly rents increasing by between 1 and 5 per cent. “A lack of housing and increased mortgagee sales will underpin demand while lack of rental accommodation stocks will keep pressure on rental prices,” Mr Booth said. According to Mr Booth, Retirees and investors are expected to represent the strongest growth in activity for the Coffs Harbour district as a result of the lifestyle benefits and improved market conditions
“Investor activity is expected to lift by between 5 and 10 per cent, driven by increased second buyer activity and improved rental yields and weekly returns,” Mr Booth 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 Booth said. “Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property.” Mr Booth considers 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 Booth said. “And any talk of abolishing negative gearing should cease immediately.” Lower immigration levels would certainly impact on the local Coffs Harbour property market – but impacts could be both positive and negative according to Mr Booth. “Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices,” Mr Booth 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,” Mr Booth 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, Barry Booth, First National Real Estate Coffs Coast on 02 6652 1144