Media release – Date MIDLAND PROPERTY MARKET STEADIES FOR 2012 Cambell Giles from First National Real Estate Giles Jones expects the region’s property market to continue to moderate and perform steadily, with signs of an increase in sales volumes, following a falling market in the latter half of 2011. “Improving market conditions and the market bottoming out will underpin the Midland property market for the coming 12 months,” Mr Giles said in the First National 2012 Property Market Outlook released this week. The key challenges in 2012 are seen by Mr Giles as new government policies, such as the flow on effects of new taxes, uncertainty surrounding the world economy and ongoing regional investments. “The economic events in Europe and America are expected to impact on buyer confidence, as the market reacts to constantly changing news and every nuance being reported in the media,” Mr Giles said. “Strategic planning for the region and the expected announcement of construction start date for regional hospital will be significant factors affecting the Midland property market in the coming six months, as they will create major public awareness of the Swan region. “With the current TPS4 for the shire of Mundaring out for public comment and the current review of infill development through proposed zoning changes around the Midland town centre in the City of Swan, the eastern region of Perth has been put to the forefront of people’s minds. “Added to this is the upgrade to the Great Eastern Highway and Roe Highway interchange and the publicity it brings coupled with recently completed large bulky good complex is generating wider public awareness of the Midland Region’s revitalisation and further adding to its appeal for home buyers and renters.” According to the Outlook, residential property prices for all sectors, houses, apartment/strata and land in the Midland region are expected to trend upwards, with increases of up to 1 per cent. “The upswing on property values is seen as a result of improved market conditions, namely decreasing interest rates, lower house prices and growing sales volumes,” Mr Giles said. The rental market should see vacancy rates in Midland flatten in 2012, given that vacancy rates are already low and the pressure for rental accommodation in general is high. Weekly rents are expected to head upwards due to the tight rental market, with increases of up to 1 per cent expected. Mr Giles expects investors will spearhead growth activity in the Midland property market, with increases in investor activity expected to be between 1 and 5 per cent, driven by improved
affordability through lower interest rates and reducing house prices, better yields and improved returns. “The rental yields may make investors come out on top in growth, but first home buyers and upgraders are also in prime position to capitalise on current market conditions,” Mr Giles said. Interest rates are expected to decrease by between 0.25 to 0.5 per cent which should strengthen the Midland property market by stimulating activity, particularly among investors. “The impending introductions of the Minerals Resource Rent Tax and Carbon Tax represent further challenges for the Midland property market,” Mr Giles said. “These taxes always generate a mixed response, so understanding the full impact will only be possible once they are in effect. “They are expected to affect the Midland property market at the very least, by reducing consumer confidence and adding to existing nervousness.” As always, says Mr Giles, the strength of the rural community is significant to the Midland property market. The full impact of the late rains in 2011 is yet to be seen. “The outcome will depend on the damage caused by these seasonal factors, which may affect the rural economy and, ultimately, buyer confidence,” Mr Giles said. “However, the rural community is on target for a very good year. “In particular, the lifestyle market in the Midland region will benefit from owners and buyers being able to sell other properties in order to obtain their lifestyle option.” The Midland commercial property market will continue to perform well with ongoing demand for office space in 2012. “There has been continued demand for industrial space with vacancy rates remaining tight in 20122, however, office space vacancies are high in new developed property but properties with existing fitouts are being leased up,” Mr Giles said. “Commercial property prices increased by around 5 per cent in 2011, due mainly in the lower end of the market due to finance issues on higher valued properties.” -
copy ends –
Issued by: First National Real Estate For further information or to receive a copy of the 2011 Property Outlook, Cambell Giles, Principal from First National Giles Jones, on 08 9274 5033.