Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
John Canavan from John Canavan First National Real Estate expects the Mansfield property market to strengthen further over the remainder of 2011, on the back of a moderating market during 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 Canavan said in the First National Property Market Mid Year Update 2011 released this week. “Financial uncertainty combined with rising living and utility costs are slowing the market down elsewhere, but conditions are still good for homebuyers, particularly investors, in the Mansfield region. “The State Budget decision to lower stamp duty prices for first home buyers should help stimulate this segment of the market. “Consumer confidence, as a result of uncertainty about economic, global and market conditions is causing people to feel more vulnerable, so they are saving more and spending less, all of which is impacting on the property market.” Mr Canavan said in the main, property prices are expected to trend upwards, or remain flat, with house and apartment/strata property prices increasing by between 1 and 5 per cent, while land price increases will be more moderate, up to 1 per cent. According to Mr Canavan, investor activity in the region is expected to increase by between 1 and 5 per cent. “Growth is expected to result from ongoing shortage of supply of rental properties, increased second buyer activity and easing of bank lending criteria,” Mr Canavan said. “However, it is retirees who are expected to generate the strongest growth in activity for the remainder of 2011, although the first home buyer sector is expected to gain momentum from early 2012 as the lower stamp duty begins to take effect.”
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 may 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 Canavan said. “Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property.” Mr Canavan considers Stamp Duty should be abolished altogether, but not if it is replaced by some other form of tax such as a broad-based land tax or death duties. “This would stimulate the market and increase sales,” Mr Canavan said. Mr Canavan believes any talk of abolishing negative gearing should cease immediately to avoid causing unnecessary concern in the marketplace. The exclusion of any of these policy changes from the recently announced Victorian state budget may be an indication that the Government is not intending to take the matters any further. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, John Canavan from John Canavan First National Real Estate on 03 5775 2792