Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Corey Michelmore from First National Michelmore Ollwitz expects the Willunga/McLaren Vale property market to moderate over the remainder of 2011, on the back of falling market throughout the first half of the year amid economic uncertainty and reducing consumer confidence. “This creates prime conditions, especially for investors to capitalise on lower house prices, increasing rents and improved yields,” Mr Michelmore said in the First National Property Market Mid Year Update 2011 released this week. “Rising stock levels, together with reasonable buyer demand will help to steady the market in the coming six months,” Mr Michelmore said. According to the Update, in the main, property prices across all segments (house, apartment/strata and land) are expected to remain relatively flat, with any movements kept to between 1 and 5 per cent. “There is potential for some slight increases for apartment/strata properties as retirees and struggling individuals look to downsize, and creating increased demand which will put upward pressure on prices,” Mr Michelmore said. “Limited available land stocks will see prices hold, or potentially produce some slight increases of between 1 and 5 per cent.” Mr Michelmore believes the rental market is expected to stabilise, as a tough economy forces more shared tenancies. “Movements in vacancy rates are expected to be less than 1 per cent, while weekly rentals will trend downwards, decreasing by around 1 per cent, although this could push out to 5 per cent, as a result of lessening demand,” Mr Michelmore said. Growth for the Willunga/McLaren Vale region is expected to come from investor activity, which is expected to increase by between 5 and 10 per cent, driven by good buying opportunities opening up. “This year is a great year to be moving home, with excellent bargains for investors,” Mr Michelmore said. “Any investor growth will result from increased
second buyer activity, better rental yields/returns and easing of bank lending criteria. “But, it is retirees who are expected to represent the strongest growth in activity for the Willunga and McLaren Vale region.” 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 as energy becomes more expensive, and energy efficiency takes on more significance in the buying decision,” Mr Michelmore said. “A carbon tax will also potentially decrease demand for homes that are not currently adapted for energy efficiency.” Mr Michelmore considered that Stamp Duty should be abolished altogether, as it only serves to stifle the property market and is an unfair and unequitable tax. “Australians need incentives to save for their retirement, including property investment, without which they may well end up relying more heavily on Government welfare,” Mr Michelmore said. “In turn, this would provide some much needed housing for the rental market, which is growing in demand each year.” Mr Michelmore considered Stamp Duty should only be abolished, however, 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. And he felt any talk of abolishing negative gearing should cease immediately. The exclusion of any of these proposed policy changes from the recently announced state budget may be an indication that the Government does not intend to take such matters any further. Mr Michelmore said a key change for the property market, which will impact quite significantly, is the number of local government authorities throughout the state and territory who are amending their planning regulations to allow for higher density developments which should see activity increase. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy the 2011 Property Outlook, Corey Michelmore from First National Real Estate Michelmore Ollwitz on 08 8323 8099