Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR Brad Dicinoski from First National Evans Head expects the Evans Head property market to moderate 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 Dicinoski said in the network’s Property Outlook 2011 Mid Year Update released this week. “Housing affordability, the threat of interest rates increasing, reducing consumer confidence 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 of houses, apartment/strata and land, are expected to remain flat, with any movements kept to a maximum of up to 1 per cent. “House and apartment/strata property prices are expected to trend downwards, while land prices will stay about the same,” Mr Dicinoski said. Mr Dicinoski believes the rental market is also expected to remain fairly steady, with weekly rent prices moving by between 1 and 5 per cent. According to Mr Dicinoski, investors are expected to represent the strongest growth in activity due to increased better rental yields and easing of bank lending criteria. “Investor activity is expected to increase by between 5 and 10 per cent, driven by low interest rates, and increasing weekly returns as a result of SE Queensland investors returning to the market after dealing with the floods of earlier this year,” Mr Dicinoski said. Mr Dicinoski said interest rates were expected to increase before the end of 2011, but only marginally and more as a reaction to inflationary pressures. 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 Dicinoski said.
“Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property. “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 Dicinoski considers Stamp Duty should be abolished altogether, as it would deliver on the promise to abolish all indirect taxes when the GST was introduced. As such, any plans to replace it with other taxes such as a broad-based land tax, including the family home, or death duties are also not supported. Taxing people wherever they can be taxed only acts as a disincentive to the average person to get ahead. “One of this nation’s biggest issue is an ageing population and the drain that will have on the public wallet,” Mr Dicinoski said. “The government should be encouraging working people to set themselves up for life during the working years, so they are not so reliant on government in their retirement. “This way government monies can be used on other projects so that our nation can prosper with people spending more, generating more GST and ultimately resulting in having more to spend.” Mr Dicinoski said any talk of abolishing negative gearing should cease immediately as it is only serving to have a negative impact on the property market, adding to buyers’ reluctance to commit to purchases. “This will then have a flow on effect to rental affordability and availability as fewer people will purchase and thereby increase pressure on rental accommodation,” Mr Dicinoski said. 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 Dicinoski 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, Brad Dicinoski, First National Evans Head, on 02 6682 6226