Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Peter Wrigley from Carolans First National expects the Nambour 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 Wrigley 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 Wrigley said in the main, property prices across all segments (house, apartment/strata and land) are expected to fall, with decreases of between 1 and 5 per cent. “Price reversals will only occur when attitudes of banks changes towards their lending criteria,” Mr Wrigley said. Mr Wrigley believes the rental market is expected to strengthen slightly, due to consistent demand, with vacancy rates and weekly rents flattening out, with movements of up to 1 per cent. He expects investors to represent the strongest growth in activity in the Nambour region, rising by up to 1 per cent. “Investor activity will be driven by bargain hunters seeking to take advantage of increased second buyer activity along with better rental yields and easing of banking lending criteria,” Mr Wrigley 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 Wrigley said.
“A carbon tax may decrease demand for homes that are not currently adapted for energy efficiency.” Mr Wrigely 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. “But, replacing stamp duty with another form of tax, such as a broad-based land tax or death duties is also not supported,” Mr Wrigley 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 Wrigley 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 Wrigley 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. “The introduction of a land tax as a result of increased valuations for the unimproved value of properties has impacted negatively on the market,” Mr Wrigley said. “Excessive infrastructure charges are also dampening development opportunities, which the council should be seeking to promote.” - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Peter Wrigley from Carolans First National, on 07 5441 1344