Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Matthew Hutchinson from First National Real Estate Coastside expects the Dapto property market to steady for the remainder of 2011, on the back of a falling market over the first half of the year. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Mr Hutchinson said in the network’s Property Outlook 2011 Mid Year Update released this week. “Housing affordability, the threat of interest rates increasing, tight lending criteria from major banks and consumer uncertainty 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 a maximum of around 1 per cent. “Impacts of natural disasters and rising utility and petrol prices are also attributed to the softening of the Dapto and Shellharbour property market, although increased investor interest is strengthening the apartment/strata property prices, where increases could be as much as 5 per cent,” Mr Hutchinson. “Flat land prices are seen in the slow-selling land releases as well as the reduction of the number of new homes currently being built.” Mr Hutchinson 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. “First home buyers are opting to remain in rental accommodation, due to tighter lending restrictions and a reduction in incentives, which has seen an increase in demand for rental properties over the last 3 to 6 months,” Mr Hutchinson. “The increased demand in rental properties will push rents up further, along with a flattening of sales to investors which is reducing new supply.” According to Mr Hutchinson, Investors are expected to represent the strongest growth in activity due to improved buying conditions, increased second buyer activity and better rental yields.
“Investor activity is expected to increase by between 1 and 5 per cent, driven by low interest rates, and increasing weekly returns,” Mr Hutchinson. 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 Hutchinson. “Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property.” Mr Hutchinson considers Stamp Duty should be abolished altogether, as it would stimulate activity in the real estate sector, representing the single biggest issue for property purchasers across the board. “Should Stamp Duty need to be replaced with another tax, death duties would have a lesser impact on the day-to-day budgets of families than an across-theboard land tax,” Mr Hutchinson. “And any talk of abolishing negative gearing should cease immediately. 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. “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, Matthew Hutchinson, First National Real Estate Coastside on 02 4295 5033