Media release – date CREMORNE PROPERTY MARKET SET TO MODERATE IN 2012 Andrew Thomas from First National Real Estate Cremorne expects the Cremorne property market is set to moderate in the coming six months, due to global economic events, namely the impact of China withdrawing from property purchasing in Australia and the European recession. Mr Thomas said in the First National 2012 Property Market Outlook released this week, growth will be underpinned by investors returning to the market due to a strong performing rental sector. “The key challenge facing the Cremorne property market in the first half of 2012 is reduced confidence in the security of property, especially as they are impacted by interest rate fluctuations and the global economy,” Mr Thomas said. “Real estate will still be an attractive investment for property investors, but even more so when shares are showing signs of weakness and decline. Over the long term, property has remained an excellent solid investment.” According to the Outlook, residential property prices are expected to remain relatively flat, across all property sectors, of houses, apartment/strata and land, with movements of up to 1 per cent. “House prices should hold with first home buyers offsetting the reluctant investor who is waiting for prime market conditions to optimise returns on investment dollars,” Mr Thomas said. “Land prices may suffer as a result of high building costs making established homes a more affordable option than building new ones.” Mr Thomas said the rental market will continue to perform strongly with vacancy rates expected to tighten further, decreasing by between 10 and 20 per cent, with high demand for rental properties of up to $700 per week. “This strong demand and a shortage of available properties will place upward pressure on weekly rent prices which are expected to increase by between 5 and 10 per cent,” Mr Thomas said. Investor activity is expected to increase by up to 5 per cent, representing the strongest growth in activity for the Cremorne region as a result of improved security with the shortage of rental properties available. Interest rates are expected to decrease as a result of pressure on the Australian dollar from other currencies, which should improve market conditions and bolster consumer confidence, steadying the market by the middle of the year.
Mr Thomas said there may be an increase in mortgage defaults in the Cremorne region as a result of a high percent of homes being owned by bankers and the current economy has dictated a stabilisation in salary and bonuses being paid. The economic events in Europe and America are expected to impact on consumer confidence, and the introduction of the carbon tax is expected to further erode consumer confidence. - copy ends Issued by: First National Real Estate For further information or to receive a copy of the 2012 Property Outlook, Andrew Thomas, Principal from First National Real Estate Cremorne, on 02 9904 1234