Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Brian Claridge from First National Real Estate Deloraine the local property market is expected to weaken over the remainder of 2011, on the back of a moderating market during the first half of the year, driven mainly by the lack of first home buyers in the market as a result of worsening affordability issues. “This creates prime conditions, especially for investors to capitalise on lower house prices, increasing rents and improved yields,” Mr Claridge said in the First National Property Market Mid Year Update 2011 released this week. According to the Update, in the main, property prices across all segments (house, apartment/strata and land) are expected to drop or flatten out. “House prices are expected to trend downwards, decreasing by between 5 and 10 per cent, as a result of the degree of difficultness in obtaining finance,” Mr Claridge said. “Apartment/strata property and land prices are expected to remain relatively flat, with the potential of movements of between 1 and 5 per cent.” Mr Claridge believes the rental market is expected to remain steady, with vacancy rates trending downwards, by between 1 and 5 per cent, due to first home buyers being forced out of the home buying market and into rental accommodation. “The strong rental demand is tightening vacancy rates and putting upwards pressure on weekly rents, with movements expected of between 1 and 5 per cent,” Mr Claridge said. “Ongoing high demand, which is underpinning the rental market tight, is a result of affordability issues purchasing properties and the value and quality of property people can rent is a lot cheaper than if they were to purchase the property themselves.” Investor activity is expected to increase by between 5 and 10 per cent, representing the strongest growth in activity as a result of strong rental demand and increased investor confidence due to increased second buyer activity and better rental yields and returns.
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 Claridge said. “Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property.” Mr Claridge considers that Stamp Duty should be abolished altogether, as it is an unfair and inefficient tax and should have been eliminated when the GST was introduced, as promised. “Government should also not consider replacing the stamp duty with another form of tax, like an across-the-board land tax or death duties,” Mr Claridge said. “The introduction of a new tax coupled with the rising costs of electricity, water/sewerage charges and the possibility of further interest rate rises will put a strain on households. “And any talk of abolishing negative gearing should cease immediately as it would act as another disincentive for investors.” The exclusion of any of these proposed policy changes from the recently announced budget may be an indication that the Government does not intend to take such matters any further. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Brian Claridge from First National Real Estate Deloraine on 03 6362 3570