Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Brian Speechley from Speechley First National expects the South Windsor property market to steady for the remainder of 2011, on the back of a rising 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 Speechley said in the network’s Property Outlook 2011 Mid Year Update released this week. “Reducing consumer confidence and decreased demand amid increased listings will continue to serve to flatten 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, although there is the potential for some land increases of between 10 and 20 per cent given the lack of vacant land available. Mr Speechley believes the rental market is expected to remain strong, with vacancy rates flattening, while weekly rents will trend upwards by between 10 and 20 per cent. “Demand is currently equal to availability and until it exceeds supply, rents will continue to increase,” Mr Speechley said. According to Mr Speechley, investor activity is expected to increase by between 1 and 5 per cent, driven by high rental returns. “But it will be first home buyers who will represent the strongest growth in activity in the second half of 2011, as market conditions turn more favourable for this segment,” Mr Speechley 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 Speechley 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 Speechley considers Stamp Duty should be abolished altogether, as it would 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,” Mr Speechley said. “And 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 Speechley said. “The biggest challenge for the South Windsor property market is the lack of future development. “A ‘green’ council has its focus on sustainable agriculture, where it should also be considering the close proximity of the area to the Sydney market, which could open the way for well-planned developments. “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 Speechley, Speechley First National on 02 4577 4699