Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Robyn Fox from First National Inverell expects the Inverell property market to further steady for the remainder of 2011, on the back of a moderating 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,” Ms Fox said in the network’s Property Outlook 2011 Mid Year Update released this week. “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 up to 1 per cent. “As more people look to downsize, there is the potential for apartment/strata property prices in the locality to trend upwards with slight increases of up to 1 per cent,” Ms Fox said. “The shortage of available land for development in the region will keep pressure on land prices which have the potential to trend upwards, increasing marginally by up to 1 per cent.” Ms Fox believes the rental market is expected to remain strong, with vacancy rates easing and trending upwards, increasing by between 1 and 5 per cent, while weekly rents will also trend upwards with increases of between 1 and 5 per cent. “A shortage of available rental accommodation and ongoing demand will underpin any rent increases,” Ms Fox said. According to Ms Fox, investors are expected to represent the strongest growth in activity for the region as a result of increased second buyer activity and better rental yields and returns.
“Investor activity is expected to slightly increase by up to 1 per cent, although seasonal factors, leading into the winter months, will soften activity to some extent,” Ms Fox 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. “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 Fox said. Ms Fox considers Stamp Duty should be abolished altogether, as it would deliver on the promise of eliminating indirect taxes such as these when the GST was introduced. “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 Fox said. Lower immigration levels is also not supported as impacts could be both positive and negative, according to Ms Fox. “Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices,” Ms Fox 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,” Ms Fox 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, Robyn Fox, First National Inverell on 02 6722 3799