Media release – date KOSCIUSKO PROPERTY MARKET SET TO IMPROVE IN 2012 Gordon Jenkinson from First National Real Estate Kosciusko expects the current trend of a falling market in the Kosciusko region is set to continue into 2012, due to supply exceeding demand, the general economic outlook and banks’ lending practices, however there is potential for the market to improve as the year progresses. Mr Jenkinson said in the First National 2012 Property Market Outlook released this week, stamp duty concessions being phased out by the middle of 2012 will have a major impact on the Kosciusko property market which is already suffering with a lack of buyers and very little money to spend. “General economic conditions are critical to the region’s property market which relies heavily on tourism so consumer confidence and discretionary spending are key factors impacting on how it performs,” Mr Jenkinson said. “Between 70 to 80 per cent of our local economy is tourism and so it is very seasonal and significantly affected by general economic conditions as tourism and leisure are seen as discretionary, non-essential spending and sows when confidence drops.” As always, in the Snowy Mountains, the economic outlook is dependent on good snow falls in May, June, July and August for the skiing and snow sports industry, which in turn provides water for the rivers, streams and lakes for summer tourism and the farming community. “I hope next year’s winter brings a bumper snow season to tempt tourists into the region so that perhaps the rental market will underpin the local property market in 2012,” Mr Jenkinson said. According to the Outlook, an oversupply of stock and strict bank lending practices are placing downward pressure on property prices in the Kosciusko district which is expected to see decreases of between 5 and 10 per cent across all sectors of houses, apartment/strata and land. On the land front, the Outlook says ongoing strong demand for rural commodities and if the Australian dollar drops in value to the US dollar, demand for good land will remain high, which may push upward pressure on land prices. Mr Jenkinson expects vacancy rates to tighten, decreasing by up to 1 per cent due to a shortage of stand-alone houses for rent and the market being strongly reliant on seasonal factors where the busy winter ski season sees no vacancies. “This shortage of supply to meet increasing demand for stand-alone houses will place upwards pressure on weekly rent prices, which are expected to increase by up to 5 per cent,” Mr Jenkinson said.
Investor activity is expected to increase by up to 5 per cent in the next 6 months as a result of falling property prices producing rising yields. But Mr Jenkinson expects retirees to represent the strongest growth in activity sector with the Kosciusko area being seen as a great place to live by the 50-65 year olds who are fit and health and mainly work remotely or are self-funded retirees. Interest rates are expected to remain unchanged for the coming six months, but even so, default mortgages are expected to increase in the Kosciusko region due to deteriorating local economic conditions and decreasing building activity will place a strain on local tradespeople who may be forced to seek employment opportunities elsewhere. The economic events in Europe and America are expected to impact on consumer confidence, given Australia is much more part of the global economy and so is more reactive to international happenings. The introduction of the carbon tax is expected to affect the Kosciusko property market, further eroding consumer confidence. - copy ends Issued by: First National Real Estate For further information or to receive a copy of the 2012 Property Outlook, Gordon Jenkinson, Principal from First National Real Estate Kosciusko, on 02 6457 2000