Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Greg Lambert from First National Real Estate Total Realty expects the Crows Nest 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 Lambert 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 around 5 per cent. “There is potential for house and apartment/strata property prices to increase by as much as 10 per cent as the shortage of properties for sale continues to place pressure on the market, especially with limited new projects being built,” Mr Lambert said. Mr Lambert believes the rental market is expected to remain strong, with vacancy rates tightening and trending downwards, decreasing by between 5 and 10 per cent, while weekly rents will trend upwards by similar percentages. “A shortage of available rental accommodation and ongoing strong demand will underpin any rent increases,” Mr Lambert said. Investor activity is expected to increase by between 10 and 20 per cent, driven by increasing weekly returns as a result of continued demand, increased second buyer activity and easing of bank lending criteria. “However, it is the Upgrader market that is expected to represent the strongest growth in activity for the region,” Mr Lambert 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 Lambert said. Mr Lambert 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 Lambert said. “Existing infrastructure is sagging under the pressure of the current population and upgrades are required to the public transport sectors in particular to ensure the demand currently enjoyed by the Crows Nest property market remains.” 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 Lambert 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, Greg Lambert, First National Real Estate Total Realty on 02 9906 5377