Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Belinda Fischer from First National Port Macquarie expects the Port Macquarie property market to soften further for the remainder of 2011, on the back of a falling market over the first half of the year as a result of reducing consumer confidence with the federal government. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Ms Fischer said in the network’s Property Outlook 2011 Mid Year Update released this week. “Housing affordability, the threat of interest rates increasing and tight lending criteria from major banks will help to moderate the market in the coming six months. “The general economy is expected to see property prices across all segments of houses, apartment/strata and land, remain flat, with the potential for drops of between 1 and 5 per cent for houses and apartment/strata.” These price drops make for ideal buying conditions, especially for investors who could snap up real bargains at a time when rents are increasing and vacancy rates remain tight. However, according to Ms Fischer, the threat of changes to tax strategies for investors from the federal government are making investors anxious and this may impact on already stunted activity levels for the remainder of 2011. “This may then result in decreased buyer activity and potentially put additional upward pressure on rents,” Ms Fischer said. Retirees are expected to represent the strongest growth in activity for the Port Macquarie region, lured by the obvious lifestyle benefits to be had from coastal living. 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,” Ms Fischer 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.” Ms Fischer considers Stamp Duty should be abolished altogether, as it would stimulate market activity and promote more efficient use of existing housing stocks. “This should only happen as long as the mooted plans for replacing it with other taxes such as a broad-based land tax, including the family home, or death duties are not carried through,” Ms Fischer said. “And any talk of abolishing negative gearing should cease immediately.” Lower immigration levels would certainly impact on the property market – but impacts could be both positive and negative says Ms Fisher. “Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices,” Ms Fischer 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,” Ms Fischer 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, Belinda Fischer, Principal from First National Port Macquarie, on 02 6583 6000