Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Mark Smith from First National Real Estate North Sydney expects the North Sydney property market to steady for the remainder of 2011, on the back of a falling market over the first half of the year. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Mr Smith said in the network’s Property Outlook 2011 Mid Year Update released this week. “Housing affordability, the threat of interest rates increasing, reducing consumer confidence and tight lending criteria from major banks will help to moderate the market in the coming six months.” In the main, property prices across all segments (house, apartment/strata and land) are expected to remain flat, with any movements kept to a maximum of up to 1 per cent. “The potential for interest rates increasing are frightening buyers and the high Australian dollar is slowing overseas interest,” Mr Smith said. Mr Smith believes the rental market to remain strong, with vacancy rates tightening and trending downwards, decreasing by up to 1 per cent, while weekly rents will trend upwards by between 1 and 5 per cent. “A shortage of available rental accommodation and ongoing demand will underpin any rent increases,” Mr Smith said. Mr Smith expects investor activity to increase by between 1 and 5 per cent, driven by increasing nervousness with the stock market and an undersupply of rental properties, which will yield better rental returns. “However, upgraders are expected to represent the strongest growth in activity for the North Sydney property market,” Mr Smith 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 Smith 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 Smith considers Stamp Duty should be abolished altogether, as it would promote more efficient use of existing housing stocks and increase turnover. Any talk of abolishing negative gearing should cease immediately. 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 Smith 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, Mark Smith, First National Real Estate North Sydney on 02 9929 8944