Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Karen Singleton from First National LJ Whorlow expects the Sunbury property market to moderate over the remainder of 2011, on the back of a weakening market during the first half of the year. “As the market corrects itself following a period of over-inflated prices due to a sustained growth period, prime conditions will be created for investors to capitalise on lower house prices, increasing rents and improved yields,” Ms Singleton said in the First National Property Market Mid Year Update 2011 released this week. Financial uncertainty combined with rising living and utility costs are slowing the market down, although conditions are still good for homebuyers, particularly investors. The State Budget decision to lower stamp duty prices for first home buyers should help stimulate this segment of the market. “Consumer confidence, as a result of uncertainty about economic, global and market conditions is causing people to feel more vulnerable, so they are saving more and spending less, all of which is impacting on the property market, Ms Singleton said. Property prices across the board (house, apartment/strata and land) are expected to remain relatively flat with the potential for movements of between 1 and 5 per cent as a result of the required price correction. “Falls should not be as great as other areas as our prices did not have the percentage increases that other areas experienced,” Ms Singleton said. “Land prices should remain level due to availability shortages, but they could also increase slightly for larger allotments.” Ms Singleton believes the rental market is expected to strengthen with vacancy rates trending downwards, decrease by between 1 and 5 per cent as a result of a shortage of rental properties in the Sunbury area. Weekly rents are expected to trend upwards, increasing by between 5 and 10 per cent due the ongoing supply versus demand issue. According to Ms Singleton, investor activity in the region is expected to increase by between 1 and 5 per cent.
“Growth is expected to result from ongoing uncertainty in the share market and increased second buyer activity,” Ms Singleton said. “First home buyers are expected to generate the strongest growth in activity for the remainder of 2011, although they should gain further momentum from early 2012 as the lower stamp duty begins to take effect.” 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 may 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 Singleton said. “Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property.” Ms Singleton consides Stamp Duty should be abolished altogether, as promised when the GST was introduced, but not if it is replaced by some other form of tax such as a broad-based land tax or death duties. “And any talk of abolishing negative gearing should cease immediately as it only creates market nervousness unnecessarily,” Ms Singleton said. Lowering immigration levels would certainly impact on the property market – however, there could be both positive and negative outcomes according to Ms Singleton. “For real estate prices, it was considered that immigration should be increased, but for liveability, they should be decreased as the current infrastructure is probably unable to support more people in the state,” Ms Singleton said. The exclusion of any of these policy changes from the recently announced Victorian state budget may be an indication that the Government is not intending to take the matters any further. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Karen Singleton from First National LJ Whorlow on 03 9740 2606