Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
David Sloss from First National Real Estate Sloss & Co expects the Goondiwindi property market to strengthen over the remainder of 2011, on the back of a falling market over the first half of the year as a result of a good cotton crop. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Mr Sloss said in the First National Property Market Mid Year Update 2011 released this week. “Restrictive bank lending criteria is held back the property market as banks adjust their risk profiles for any further falls in prices. “Even though now is an ideal time to purchase, people are holding onto their money and waiting to see what will happen to the market, property values, the economy and the world.” According to Mr Sloss property prices across the board (house, apartment/strata and land) are expected to flatten with potential movements of below 1 per cent. Mr Sloss believes the rental market is expected to remain relatively steady with vacancy rates tightening and trending downwards, decreasing by up to 1 per cent. “Increased demand on rental properties from population growth in the town will result in upwards pressure on weekly rents, with increases of between 1 and 5 per cent,” Mr Sloss said. Mr Sloss expects investors will ultimately benefit from increased second buyer activity, improved rental yields and returns and easing of bank lending criteria. “However, it is the Upgrader segement that is expected to represent the strongest growth in activity, but investor activity is expected to increase by between 1 and 5 per cent as a result of population growth,” Mr Sloss 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.
“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 Sloss said. “A carbon tax may decrease demand for homes that are not currently adapted for energy efficiency. “Increased council rates, water charges, electricity charges and a carbon tax will all impact on living costs along with ambulance levies on electricity accounts. Government charges, water and power are up more than 50 per cent in south east Queensland already and predicted to go higher before applying a carbon tax based increase.” Mr Sloss thinks Stamp Duty should be abolished altogether, delivering on the promise to remove all indirect taxes such as Stamp Duty, when the GST was introduced as well as stimulating market activity particularly with investors. “However, replacing stamp duty with another form of tax, such as a broad-based land tax or death duties is not supported,” Mr Sloss said. “A broad-based land tax including the family home would ultimately become a tax on tenants and it would reduce investor interest in Queensland. “Death duties should also be taken off the negotiating table, and any talk of abolishing negative gearing should cease immediately.” The exclusion of any of these proposed policy changes from the recently announced Queensland state budget may be an indication that the Government does not intend to take such matters any further. Mr Sloss said the lack of State Government action on new land releases is stifling the market. “The land segment is suffering as a result of high development costs,” Mr Sloss said. “The Queensland Government has just put a clamp on head works ($28K per block) but developers say they have not touched the water rates and that adds another $25K on top of that, so effectively it costs around $50K to develop a single block of land which may serve to discourage for investors.” - copy ends – Issued by: First National Real Estate For further information or to receive a copy of the 2011 Property Outlook, David Sloss, Principal from First National Real Estate Sloss & Co, on 07 4671 1922