Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Kim Wiesner from First National Gloucester expects the Gloucester 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 increased investor interest, strong occupancy rates and good rental returns. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Ms Wiesner 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 between 1 and 5 per cent. “While rural property prices have fallen, quality residential and lower end residential properties have been in demand which is serving to keep a floor under property prices in the Gloucester area,” Ms Wiesner said. Ms Wiesner believes the rental market is expected to remain strong, even with vacancy rates easing and trending upwards, increasing between 5 and 10 per cent, and weekly rents also trending upwards by between 1 and 5 per cent. “A shortage of available rental accommodation amid strong demand will underpin any rent increases,” Ms Wiesner said. Investor activity is expected to increase by between 5 and 10 per cent, representing the strongest growth in activity for the region which is being seen as a growing town on the move. “This surge in investor interest is driven by low interest rates, increased second buyer activity, better rental yields and the easing of bank lending criteria,” Ms Wiesner said.
“While the recent approval of gas wells for AGL to the south of Gloucester has dampened enthusiasm in the area for retirees, it has spurred investors to purchase before any perceived price jumps associated with growth of a small town in regional Australia.” 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 housing affordability, consumer 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,” Ms Wiesner 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.” Ms Wiesner considers Stamp Duty should be abolished altogether, as it would promote more efficient use of existing housing stocks. “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,” Ms Wiesner 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,” Ms Wiesner 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, Kim Wiesner, First National Gloucester on 02 6558 9077