Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Greg McDonald from First National McDonald & Co expects the Geelong property market to weaken over the remainder of 2011, on the back of a falling market during the first half of the year. “This will create ideal conditions for investors to capitalise on lower house prices, increasing rents and improved yields,” Mr McDonald said in the First National Property Market Mid Year Update 2011 released this week. “The current two-tiered economy, with the retail sector doing poorly, but house prices at an all time high, is creating consumer nervousness so buyers are holding back.” According to Mr McDonald, financial uncertainty combined with rising living and utility costs are slowing the market down, although conditions are still good for homebuyers, particularly investors. “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 McDonald said. Property prices across the board (house, apartment/strata and land) are expected to trend downward, and flattening out in some sectors such as land where there is a shortage of supply as well as builders. House and apartment/strata property prices are expected to decrease by between 5 and 10 per cent, while land price movements should in the main be less than 1 per cent. Mr McDonald believes the rental market is expected to strengthen with vacancy rates remaining flat, potentially decreasing by between 1 and 5 per cent as a result of ongoing strong demand. “As a result, weekly rents are expected to trend upwards, increasing by between 1 and 5 per cent,” Mr McDonald said.
Mr McDonald expects Upgraders to generate the strongest growth in activity for the remainder of 2011, although first home buyers should gain momentum 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 may 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 McDonald said. “Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property.” - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Greg McDonald from First National McDonald & Co on 03 5228 3333
Geelong, McDonald & Co VIC - Media Release