Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Glen Graham from First National Macleay Island expects the local property market to weaken over the remainder of 2011, on the back of a falling market over 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 Graham said in the First National Property Market Mid Year Update 2011 released this week. “Restrictive bank lending criteria is holding back the property market as banks adjust their risk profiles for further falls in prices. Even though now is an ideal time to purchase, people are holding onto their money and waiting to see what will happen to the market, property values, the economy and the world.” Mr Graham said in the main, house and land prices are expected to trend downwards, with decreases of between 5 and 10 per cent due to minimal buyer demand. “The Macleay Island property market is “saturated”, having literally hundreds of properties, both houses and land, for sale currently, with very low levels of demand,” Mr Graham said. “This has been a worsening situation since the onset of the GFC and investors are trying to offload properties at the moment. This situation will put downward pressure on prices across the board.” According to Mr Graham, the rental market is expected to strengthen slightly, due to consistent demand, with vacancy rates tightening by 1 to 5 per cent while weekly rents trend upwards, with increases of between 1 and 5 per cent. He expects retirees to represent the strongest growth in activity in the Macleay Island region. 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 Graham said.
“A carbon tax may decrease demand for homes that are not currently adapted for energy efficiency. “ Mr Graham believes Stamp Duty should be abolished altogether, delivering on the promise to remove all indirect taxes such as Stamp Duty, when the GST was introduced. “But replacing stamp duty with another form of tax, such as a broad-based land tax or death duties is not supported,” Mr Graham said. “A broad-based land tax including the family home would ultimately become a tax on tenants and it would reduce investor interest in Queensland. “Death duties should also be taken off the negotiating table, and any talk of abolishing negative gearing should cease immediately.” The exclusion of any of these proposed policy changes from the recently announced Queensland state budget may be an indication that the Government does not intend to take such matters any further. Mr Pick feels the lack of State Government action on new land releases is stifling the market. “The land segment is suffering as a result of high development costs,” Mr Graham said. The Queensland Government has just put a clamp on head works ($28K per block) but developers say they have not touched the water rates and that adds another $25K on top of that, so effectively it costs around $50K to develop a single block of land which is discouraging for investors. Mr Pick said the move by the local Macleay Island council to introduce car parking charges at the mainland port, has the potential to impact negatively on the Island’s property market. “This could add considerably to the cost of living on the Island with many Islanders opting to use cars in lieu of public transport due to its unsuitability,” Mr Graham said. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Glen Graham, from First National Macleay Island, on 07 3409 5013