Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR Paul O’Donnell from First National Real Estate Gungahlin expects the Gungahlin property market to strengthen slightly for the remainder of 2011, on the back of a steadying market over the first half of the year. “This steady market is a result of a strong economy, low unemployment and a shortage of housing for the population,” Mr O’Donnell said in the network’s Property Outlook 2011 Mid Year Update released this week. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields. “Housing affordability, the threat of increasing interest rates, reducing consumer confidence and tight lending criteria from major banks will help to moderate the market in the coming six months. “House and apartment/strata property prices are expected to trend upwards, increasing by between 1 and 5 per cent, while land prices are expected to trend downwards, dropping by similar percentages. “The ACT government has recently published details of its land release program, which is set to release thousands of blocks of land in stages in the outer lying areas over the next 4 to 5 years, which should see land prices reinvigorated.” Mr O’Donnell 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, increasing by between 1 and 5 per cent. “A shortage of available rental accommodation and ongoing strong demand will underpin any rent increases,” Mr O’Donnell said. Investor activity is expected to increase by between 1 and 5 per cent, representing the strongest growth in activity for the region, as a result of better rental yields and weekly returns and easing of bank lending criteria. “The recently released details of proposed infrastructure spending by the Government, especially in the Gungahlin region will drive investor activity in the near future,” Mr O’Donnell said.
“New roads, schools and child care facilities, along with an aquatic centre and health complex is expected to spur buyer interest, and plans to move a large government department to Gungahlin only adds to the appeal.” 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 O’Donnell 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 O’Donnell considers Stamp Duty should be abolished altogether, as it would stimulate the property market and 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,” Mr O’Donnell said. Lower immigration levels would certainly impact on the local Gungahlin property market – but impacts could be both positive and negative, according to Mr O’Donnell. “Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices,” Mr O’Donnell said. “However, existing infrastructure is sagging under the pressure of the current population.” 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 O’Donnell 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, Paul O’Donnell, First National Real Estate Gungahlin, on 02 6262 2525