Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Ian Dart from First National Bay City expects the Grovedale property market to strengthen over the remainder of 2011, on the back of a rising market during the first half of the year. “This will create ideal conditions for investors to capitalise on lower house prices, increasing rents and improved yields,” Mr Dart said in the First National Property Market Mid Year Update 2011 released this week. “Conditions are good for homebuyers, particularly investors, seeking to purchase in the Grovedale region. Strong demand, and short supply is putting a floor under the property market and keeping pressure on prices. “The State Budget decision to lower stamp duty prices for first home buyers should help stimulate this segment of the market.” Mr Dart said in the main, property prices across the board (house, land and apartment/strata) are expected to trend upwards, with house and apartment/strata property prices increasing by between 1 and 5 per cent, and land prices rising by between 5 and 10 per cent. He believes the rental market is expected to strengthen, with vacancy rates trending downwards and decreasing by between 1 and 5 per cent as a result of very high demand. “Weekly rents are expected to trend upwards with increases of between 5 and 10 per cent, again as a result of high demand,” Mr Dart said. Mr Dart expects investor activity in the region is expected to increase by between 5 and 10 per cent, as a result of an ongoing stable market and improved rental returns. “Although, Upgraders are expected to generate the strongest growth in activity for the remainder of 2011, with the first home buyer sector strengthening from early 2012 as the lower stamp duty begins to take effect,” Mr Dart 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 Dart said. Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property.” Mr Dart considers Stamp Duty should be abolished altogether, but not if it is replaced by some other form of tax such as a broad-based land tax or death duties. “And any talk of abolishing negative gearing should cease immediately,” Mr Dart said. Lowering immigration levels would certainly impact on the Grovedale property market – however, there could be both positive and negative outcomes, according to Mr Dart. “For real estate prices, it was considered that immigration should be increased, but for liveability, they should be decreased as the current infrastructure is probably unable to support more people in the state,” Mr Dart said. The exclusion of any of these policy changes from the recently announced Victorian state budget may be an indication that the Government is not intending to take the matters any further. Mr Dart said the Grovedale and surrounding region need faster tracking of new land development. “The system is over burdened with red tape and progress is painfully slow, making supply low at a time of high demand,” he said. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Ian Dart from First National Bay City, on 03 5244 4777