Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Mr Testa Prujean from First National Real Estate Coastal expects the Minyama property market to weaken over the remainder of 2011, on the back of a falling market over the first half of the year due primarily to an insecure job market. “This will create ideal conditions for investors to capitalise on lower house prices, increasing rents and improved yields,” Mr Prujean 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.” In the main, house and land prices are expected to remain flat, while apartment/strata prices are expected to trend downwards, with decreases of between 1 and 5 per cent as a result of an unstable financial future. Mr Prujean believes the rental market is expected to flatten out, with movements of between 1 and 5 per cent, in vacancy rates or weekly rents. “Tenants are opting to stay put and take out longer rental terms, as rents are rising for good rental properties,” Mr Prujean said. “Many couples/families are sharing the more expensive properties to rent. “The flow on effect of all this is that owners are coming under increasing pressure, facing higher costs associated with their investments such as rising body corporate fees.” Investors are expected to represent the strongest growth in activity in the Minyama region, increasing by between 5 and 10 per cent. “This investor activity growth is being driven by lower property prices, increased second buyer activity and better rental yields and returns,” Mr Prujean 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.
“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 Prujean said. “A carbon tax may decrease demand for homes that are not currently adapted for energy efficiency. “Government charges, water and power are up more than 50 per cent in south east Queensland already and predicted to go higher before applying a carbon tax based increase.” Mr Prujean considers Stamp Duty should be abolished altogether, delivering on the promise to remove all indirect taxes such as Stamp Duty, when the GST was introduced as well as stimulating market activity. “But replacing stamp duty with another form of tax, such as a broad-based land tax or death duties is not supported,” Mr Prujean 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 Prujean sees 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 Prujean 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. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Tresta Prujean, from First National Real Estate Coastal, on 07 5477 5107