Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Craig Riddel from First National Real Estate Tweed City expects the Tweed City property market to steady for the remainder of 2011, on the back of a falling 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 Riddel 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.” 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. “Current conditions make the Tweed City property market a buyers’ market which means the pressure is off prices, resulting in improved affordability, especially for upgraders,” Mr Riddel said. Mr Riddel believes the rental market is expected to remain strong, with vacancy rates tightening and trending downwards, decreasing marginally by up to 1 per cent, while weekly rents are expected to remain flat, with the potential for slight movements of up to 1 per cent. According to Mr Riddel investor activity is expected to increase by between 1 and 5 per cent, driven by increased second buyer activity. “But, it is the upgrader segment of the market where the strongest growth in activity is expected, due to this increased second buyer activity,” Mr Riddel said. Mr Riddel expects interest rates to increase before the end of 2011, by 1 or 2 percentage points, but more as a move to combat inflation than anything else. “However, the Tweed City property market is sensitive to any cost of living pressures such as when cost of petrol rises or interest rates rise, buyer enquiry decreases,” Mr Riddel said.
“With the main demographic profile for the region comprising retirees and service related employees on minimum award wages, there is very little disposable income, making them very susceptible to economic changes.” 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 Riddel 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 Riddel considers Stamp Duty should be abolished altogether, as it would stimulate real estate 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,” Mr Riddel 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 Riddel 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, Craig Riddel, First National Real Estate Tweed City on 07 5523 3900