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Ron Pearson from First National Real Estate Gateway expects the Drysdale property market to steady further over the remainder of 2011, on the back of a moderating market during the first half of the year. “This creates prime conditions for investors to capitalise on lower house prices, increasing rents and improved yields,” Mr Pearson said in the First National Property Market Mid Year Update 2011 released this week. “Financial uncertainty combined with rising living and utility costs are slowing the market down, although conditions are still good for homebuyers, particularly investors.” The State Budget decision to lower stamp duty prices for first home buyers should help stimulate this segment of the market. “Consumer confidence, as a result of uncertainty about economic, global and market conditions is causing people to feel more vulnerable, so they are saving more and spending less,- all of which is impacting on the property market,” Mr Pearson said. In the main, Mr Pearson expects property prices for house and apartment/strata segments are expected to flatten out, with any movements kept to a maximum of 1 per cent, following a period of quite good growth. Land prices have the potential to trend upwards by between 1 and 5 per cent as land that can be built on immediately is in very short supply. “The opening up of a large land development in the area is expected to help generated awareness and increase desirability for Drysdale, which is currently a relatively unknown region,” Mr Pearson said. Mr Pearson believes the rental market is expected to strengthen, with vacancy rates levelling out, and weekly rents trending upwards. “Movements in vacancy rates are anticipated to be no more than 1 per cent, with constant rental enquiry,” Mr Pearson said.

“Weekly rents would trend upwards, increasing by up to 1 per cent, due to strong demand.” Investor activity in the region was expected to increase by up to 1 per cent, with Drysdale representing great value for money and generating good rental demand. “Growth is expected to result from increased second buyer activity and easing of bank lending criteria,” Mr Pearson said. First home buyers are expected to generate the strongest growth in activity for the remainder of 2011, which will only strengthen from early 2012 as the lower stamp duty begins to take effect. 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 Pearson said. “Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property.” Mr Pearson considers Stamp Duty should be abolished altogether, but not if it is replaced by some other form of tax such as a broad-based land tax or death duties and any talk of abolishing negative gearing should cease immediately as it unnecessarily creates market nervousness. Lowering immigration levels would certainly impact on the property market – however, there could be both positive and negative outcomes, according to Mr Pearson. “For real estate prices, it was considered that immigration should be increased, but for liveability, they should be decreased as the current infrastructure is probably unable to support more people in the state.” The exclusion of any of these policy changes from the recently announced Victorian state budget may be an indication that the Government is not intending to take the matters any further. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Ron Pearson from First National Real Estate Gateway on 03 5251 2222

Drysdale, Gateway VIC  

Drysdale, Gateway VIC - Media Release