New South Wales Outlook Changing Market Conditions Interest rates are expected to increase before the end of 2011, by between 0.25 and 0.5 per cent. Based on the survey, 61.2 per cent of NSW respondents thought they would increase, 8.1 per cent thought they would decrease and 30.6 per cent thought they would remain unchanged. 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. Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property. Essentially, this could be an each-way bet, but until the tax is introduced and the impacts felt, it is difficult to predict the impact on property transactions with certainty. Broadly, New South Wales members believe Stamp Duty should be abolished altogether, as it would promote more efficient use of existing housing stocks. This is, of course, provided proposals to replace it with other taxes such as a broad-based land tax, ensnaring the family home, or death duties, are not implemented. Members were also of the opinion that any talk of abolishing negative gearing should cease immediately. Lowering immigration levels would certainly impact on the NSW property market – but impacts could be both positive and negative. Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices. However, existing infrastructure is sagging under the pressure of the current population.
20 First National Real Estate 2011 Property Market Outlook