Media release – date NORTH SYDNEY PROPERTY MARKET SET TO IMPROVE IN 2012 Mark Smith from First National Real Estate North Sydney expects the current trend of a steadying market for the North Sydney region is set to continue into 2012, with the market improving as the year progresses. Mr Smith said in the First National 2012 Property Market Outlook released this week, “the nervousness in Europe and the fluttering stock market locally seem to be taking any confidence out of the market, which seemed to pick up just after winter with some early positive signs, but then slumped again.” “In 2012, the abolition of stamp duty concessions for first home buyers will definitely affect the market, along with changing global economies making it increasingly difficult to raise finance,” Mr Smith said. “Generally, the lower north shore of Sydney enjoys steady demand due to its proximity to the CBD, good transport network and low crime rates, which will continue to underpin the market in 2012.” According to the Outlook, residential property prices in the North Sydney region are expected to remain relatively flat with movements kept to below 1 per cent. “Demand is still strong however supply is restricted, nevertheless, house prices are not moving up,” Mr Smith said. “First home buyers are still strong in the apartment/strata property sector, however from 1 st January when concessional stamp duty rates are abolished, the first home buyer market will be affected with prices leveling off.” The rental market is expected to see vacancy rates tighten, trending downwards and decreasing by up to 5 per cent with demand outstripping supply, which will put upward pressure on weekly rent prices which are expected to increase by up to 5 per cent as well. Mr Smith expects investor activity to show some growth increasing by between 1 and 5 per cent as they move out of the stock market and capitalise on the strong rental growth predictions. “But, it is the upgrader segment that is expected to show the strongest growth,” he said. Interest rates are expected to decrease by between 0.5 and 0.75 per cent, but it is the economic events in Europe and America which are expected to affect the property market the most. Commercial property prices in the North Sydney region are expected to fall as vacancies increase and more and more strata office space comes onto the market increasing supply.
“The new NABORS rating will begin to impact more on the commercial property market in North Sydney throughout 2012,” Mr Smith said. “Decreasing interest rates will help bring long term investors back into the market, especially as the stock market continues to underperform.” Mr Smith believes the carbon tax is seen as a good place to start to bring commercial properties in line with green credentials, but the real difference will be made by the individuals, not the companies. “More than 30 per cent of our clients seek energy efficient features when looking to lease or purchase a commercial property in the North Sydney region, with motion sensor lights proving the most popular and making commercial properties more rentable,” Mr Smith said. Sales of commercial properties are expected to decrease in 2012, as businesses leave the region due to general economic conditions. “The commercial property market has been tough in 2011, and will continue to be so in 2012. Retail is certainly being affected which leaves a visible sign for all commuters using the region’s arterial roads to see increasing vacancies,” Mr Smith said. “This must be off-putting to investors in the commercial and retail sectors and is contingent upon business, industry and government to work together to address.” - copy ends Issued by: First National Real Estate For further information or to receive a copy of the 2012 Property Outlook, Mark Smith, Principal from First National Real Estate North Sydney, on 02 9929 8944