Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR Liz Shelton from First National Real Estate Meers & Shelton expects the Tamworth property market to soften 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,” Ms Shelton 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. “The general economy is expected to see house and apartment/strata property prices remain flat, while land prices are expected to trend upwards. “Any movements are expected to be up to 5 per cent. “Significant land development and an influx of project home style builders, coupled with external pressures, have seen the Tamworth housing market remain steady over the last 12 months. “The course of over-supply of land in the region has run its course and it is expected that due to a lack of suitable residential blocks available, prices should increase in the coming six months.” Ms Shelton believes the rental market is expected to strengthen, with weekly rents trending upwards, increasing by around 1 per cent, while there is no movement expected for vacancy rates. “The shortage of available rental properties and strong demand will underpin the rental market for the rest of the year,” Ms Shelton said. According to Ms Shelton, Upgraders will represent the strongest growth in activity for the region, however investor activity is expected to increase by between 1 and 5 per cent, driven by easing of bank lending criteria conditions. “However, investors will monitor closely and be wary of changes to negative gearing and other tax reforms, which may impact on their intention to become active again,” Ms Shelton 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,” Ms Shelton 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 Shelton considers Stamp Duty should be abolished altogether, as it would deliver on the promise that indirect taxes such as Stamp Duty would be eliminated when the GST was introduced. “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 Shelton 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, according to Ms Shelton. “Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices. However, existing infrastructure is sagging under the pressure of the current population,” Ms Shelton said. 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 Shelton 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, Liz Shelton, Principal from First National Real Estate Meers & Shelton, on 02 6766 1888