Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
David Jones from Highlands First National expects the Mittagong property market to further steady for the remainder of 2011, on the back of a moderating market over the first half of the year due to ongoing nervousness and global uncertainty. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Mr Jones said in the network’s Property Outlook 2011 Mid Year Update released this week. “However, housing affordability, the threat of increasing interest rates, reducing consumer confidence and tight lending criteria from major banks will continue to impact the market in the coming six months. “In the main, property prices across all segments (house, apartment/strata and land) are expected to remain relatively flat, with any movements kept to between 1 and 5 per cent. “Although, a lack of demand could see apartment/strata property prices fall by as much as between 5 and 10 per cent.” Mr Jones believes the rental market is expected to remain strong, with vacancy rates tightening and trending downwards by between 5 and 10 per cent, while weekly rents will trend upwards. “A shortage of available rental accommodation and ongoing strong demand will underpin any rent increases,” Mr Jones said. According to Mr Jones, the lack of government incentives will keep investors at bay and the New Tenancy Act which further favours tenants, will also serve as a disincentive for investors. “But the astute investor has a real opportunity of capitalising on a market that favours the investor,” Mr Jones said. “Upgraders are expected to represent the strongest growth in activity for the 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 Jones said. “Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property. Although, this could be an each-way bet, but until the tax is introduced and the impacts felt, it is difficult to predict the outcome on property transactions.” Mr Jones considers Stamp Duty should be abolished altogether, as it would deliver on the promise of eliminating indirect taxes such as these when the GST was introduced. “The mooted plans for replacing it with other taxes such as a broad-based land tax, including the family home, or death duties should not be carried through and any talk of abolishing negative gearing should cease immediately,” Mr Jones said. The exclusion of any of these proposed policy changes from the recently announced NSW state budget may be an indication that the Government does not intend to take such matters any further. “It is hoped that the change in NSW government will see some changes in planning policy to enable developers to release more land at a more affordable development cost and with reduced red tape,” Mr Jones said. “There is, however, a budget loss to be recovered and this may impact on the ability of the new government to effectively move forward with their plans.” - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, David Jones, Highlands First National on 02 4872 2998