Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Andrew Short from First National Real Estate Geraldton expects the local property market to moderate for the remainder of 2011, on the back of a falling market over the first half of the year due to consumer nervousness waiting for the impacts of the recently announced state budget. “This creates prime conditions, especially for investors to capitalise on lower house prices, increasing rents and improved yields,” Mr Short said in the First National Property Market Mid Year Update 2011 released this week. In the main, property prices across the board (house, apartment/strata and land) are expected to flatten, with any movements kept to below 1 per cent. “There is still an over-supply of houses and apartment/strata properties which will take a while to erode,” Mr Short said. “There is an abundance of land available in the Midwest, and building has slowed which has diminished demand for new homes.” Mr Short says the rental market is expected to strengthen, with vacancy rates tightening, trending downwards and decreasing by between 1 and 5 per cent. “Current vacancy rates are quite high, at more than 4 per cent and projected growth figures will increase rates,” Mr Short said. “The shortage of supply of rental accommodation will put upwards pressure on weekly rentals which will increase by between 1 and 5 per cent.” According to the Outlook, investors are expected to represent the strongest growth in activity, increasing by between 1 and 5 per cent driven by the proposed Port at Oakagee looking more positive, resulting in the creation of job opportunities and growth and increasing second buyer activity in the Geraldton region. “When construction starts on the new Port, there will be an increase in labour demand and skills, plus technical infrastructure which will all have a positive impact on the property market,” Mr Short said.
“In addition, the proposal for an increase in the number of fly-in/fly-out workers for the Pilbara to be based in Geraldton, with direct flights north, will prove extremely beneficial for the region. “The resources sector in the Midwest is facing the problem of delays in providing infrastructure. There are new iron ore mines waiting to commence production, but the current port in Geraldton lacks the facilities to cater for the quantity they are hoping to export. “The new Port at Oakagee has also spurred industrial market activity as major players secure sites for their anticipated involvement in the project. This is proving a real boon for the Midwest property market and will continue to deliver benefits well into the future.” The Government’s move to introduce a carbon tax is not, in the main, supported by First National members. “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 Short said. Mr Short considers Stamp Duty should be abolished altogether, to stimulate market activity, especially with investors. “However, replacing Stamp Duty with another form of tax, such as a broad-based land tax or death duties should be completely quashed,” Mr Short said. “And any talk of abolishing negative gearing should cease immediately.” The exclusion of any of these policy changes from the recently announced WA state 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, Andrew Short from First National Real Estate Geraldton on 08 9956 6444