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Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR Michael Kettle from First National Real Estate Caloundra expects the Caloundra property market to weaken over the remainder of 2011, on the back of a falling market over the first half of the year due primarily to supply versus demand issues where current stock levels exceed the number of sales. “This will create ideal conditions for investors to capitalise on lower house prices, increasing rents and improved yields,” Mr Kettle said in the First National Property Market Mid Year Update 2011 released this week. “Restrictive bank lending criteria is holding back the property market as banks adjust their risk profiles for further falls in prices. Even though now is an ideal time to purchase, people are holding onto their money and waiting to see what will happen to the market, property values, the economy and the world.” House prices are expected to trend downwards, with decreases of between 1 and 5 per cent and apartment/strata property prices may trend upwards by between 5 and 10 per cent. Land prices are expected to remain flat, with slight movements of up to 1 per cent, as a result, Mr Kettle says, of extra costs charged by local and state authorities on developers slowing and reducing the amount of development being undertaken, either through delays or discouragement. Mr Kettle believes the rental market is expected to flatten out, with marginal movements of up to 1 per cent, in vacancy rates or weekly rents. “There seems to be a more even balance between supply and demand in the rental market which accounts for the stable market,” Mr Kettle said. “This could be as a result of the spate of natural disasters that hit the state early in 2011. As business has slowed people have left the area chasing work and there are more properties available for rent as sellers have been unable to realise prices expectations and have turned to the rental market instead.” Growth is expected to come from Upgraders, representing the strongest growth in activity in the Caloundra region. “Investors are noticeably absent from the Caloundra market, in the light of better rental returns to be found in other areas of Queensland and less lifestyle investors in the market overall, despite the prime market conditions which astute investors will be keen to capitalise on.”

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 Kettle said. “A carbon tax may decrease demand for homes that are not currently adapted for energy efficiency. “Government charges, water and power are up more than 50 per cent in south east Queensland already and predicted to go higher before applying a carbon tax based increase.” Mr Kettle considers Stamp Duty should be abolished altogether, delivering on the promise to remove all indirect taxes such as Stamp Duty, when the GST was introduced as well as stimulating market activity. “But, replacing stamp duty with another form of tax, such as a broad-based land tax or death duties is not supported,” Mr Kettle said. “A broad-based land tax including the family home would ultimately become a tax on tenants and it would reduce investor interest in Queensland. “Death duties should also be taken off the negotiating table, and any talk of abolishing negative gearing should cease immediately as it may eventuate in a drop off in rental properties and drive up rents.” The exclusion of any of these proposed policy changes from the recently announced Queensland state budget may be an indication that the Government does not intend to take such matters any further. Mr Kettle feels the lack of State Government action on new land releases is stifling the market. “The land segment is suffering as a result of high development costs,” Mr Kettle said. The Queensland Government has just put a clamp on head works ($28K per block) but developers say they have not touched the water rates and that adds another $25K on top of that, so effectively it costs around $50K to develop a single block of land which is discouraging for investors. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Michael Kettle , from First National Real Estate Caloundra , on 07 5438 2166

Caloundra, QLD  

Caloundra, QLD - Media Release