Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR Brian Anderson from First National Real Estate Anderson expects the Parkes property market to strengthen for the remainder of 2011, on the back of a steadying 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 Anderson 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 continue to impact the market in the coming six months. “In the main, property prices across all segments of houses, apartment/strata and land, are expected to remain relatively flat, with any movements kept to between 1 and 5 per cent. “New industries are attracting people to move into town to take advantage of increased employment opportunities which is serving to moderate the market.” Mr Anderson believes the rental market will remain strong, with vacancy rates tightening and trending downwards, decreasing by up to 1 per cent, while weekly rents will trend upwards with increases of between 5 and 10 per cent. “A shortage of available rental accommodation and ongoing demand will underpin any rent increases,” Mr Anderson said. According to Mr Anderson, Investors, along with upgraders, are expected to represent the strongest growth in activity for the Parkes region. “Investor activity is expected to increase by between 5 and 10 per cent, as a result of increased second buyer activity, better rental yields and returns and easing of bank lending criteria,” Mr Anderson said. “Although some of their activity is being stymied by the lack of landlord support and tenants having more rights.” 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 Anderson 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 Anderson 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 Anderson said. Lower immigration levels could have both positive and negative impacts on the property market according to Mr Anderson. “Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices,” Mr Anderson said. “However, existing infrastructure is sagging under the pressure of the current population.” 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 Anderson 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, Brian Anderson, Principal from First National Real Estate Anderson, on 02 6862 6400