Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Michael Rumble from First National Real Estate Hawks Nest expects the Hawks Nest property market to steady 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 Rumble said in the network’s Property Outlook 2011 Mid Year Update released this week. “Housing affordability, the threat of interest rates increasing 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 (house, apartment/strata and land) are expected to remain flat, with any movements kept to a maximum of between 1 and 5 per cent. “Housing affordability, threat of interest rate increases and tight lending criteria from major banks are the major reasons for the anticipated slow down in market,” Mr Rumble said. “The lack of investors in the market will see house prices trend downwards, while a shortage of rental properties will keep pressure on apartment/strata property prices which are expected to trend upwards. “High land prices for the current market are expected to see land prices head downwards.” Mr Rumble 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 by similar percentages. “A shortage of available rental accommodation and ongoing demand will underly any rent increases,” Mr Rumble said. According to Mr Rumble, investors are expected to represent the strongest growth in activity due to increased second buyer activity and better rental yields.
“Investor activity is expected to increase by between 1 and 5 per cent, driven by the ongoing shortage of rental properties and strong demand,” Mr Rumble 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 Rumble said. “Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property.” Mr Rumble considers Stamp Duty should be abolished altogether, and not replaced by other taxes such as death duties or a broad-based land tax, in line with the promises made when the GST was introduced. Any talk of abolishing negative gearing should also cease immediately. Lower immigration levels would certainly impact on the local Hawks Nest property market – but impacts could be both positive and negative, according to Mr Rumble. 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 Rumble 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, Michael Rumble, First National Real Estate Hawks Nest on 02 4997 0262