Media release – Date KALGOORLIE PROPERTY MARKET STEADIES FOR 2012 Gavin Gilmore from First National Real Estate Kalgoorlie expects the region’s property market to moderate, following a rising market in the latter half of 2011, as a result of a strong performing resources sector. “The price of Gold has been rising and this is expected to continue into 2012, and underpinning the property market,” Mr Gilmore said in the First National 2012 Property Market Outlook released this week. A key challenge facing the Kalgoorlie property market in 2012 is seen by Mr Gilmore as managing the growing demand for properties against the lack of development, which may place pressure on property prices both in terms of home values and rental accommodation. “The economic events in Europe and America will also continue to impact the local Kalgoorlie property market as it responds to every nuance of media commentary,” Mr Gilmore said. According to the Outlook, property prices for houses and apartment/strata in the Kalgoorlie region are expected to trend upwards, increasing by between 1 and 5 per cent due to growing demand and diminishing stock supplies placing upward pressure on prices. “Land prices for Kalgoorlie are expected to remain flat with low developer demand and the cost of new housing exceeding established property prices,” Mr Gilmore said. The rental market faces ongoing pressure as a result of population growth. “Kalgoorlie Boulder has had strong employment growth over the last six months of 2011 and has attracted many new families to the region, placing pressure on the local rental market,” Mr Gilmore said. “This will continue into 2012, which may generate fly in/out employment growth rather than encourage workers to seek accommodation in the region.” Vacancy rates in the region are expected remain flat in 2012, with current levels currently very low at 1 per cent or less, meaning there is little room for them to move any lower. “This tight, competitive rental market will place upward pressure on weekly rents which are expected to increase by between 5 and 10 per cent,” Mr Gilmore said. Mr Gilmore expects investors to become more active in the market, and their activity is expected to increase by between 1 and 5 per cent as they strive to capitalise on current market conditions of improved rental returns. “But it is first home buyers who I expect to represent the strongest growth in activity, driven by the good supply of land in nearby Byford and Harrisdale stimulating some activity among this sector,” Mr Gilmore said.
“There are many young families moving into the Kalgoorlie region because of the strong job prospects and this will drive them to purchase as rents rise.” Interest rates are expected to decrease by around 0.25 per cent which should strengthen the Kalgoorlie property market. The Kalgoorlie commercial property market will continue to perform well in 2012, according to Mr Gilmore. “There has been a significant increase in the demand for workshop/industrial properties over the last six months of 2011, due to the increase in mining activity in the region,” Mr Gilmore said. “There is very little quality workshop/industrial space available for least, which is producing strong competition in this segment of the market. “There has been a significant increase in the availability of retail space in the area, due to the impact of global economies on the broader retail sector. Of note is the reluctance of major retailers to open new establishments in the region. “There has been a stable availability of office space in the region and this trend is expected to continue into 2012, with prices rising in line with the consumer pricing index (CPI).” Decreasing interest rates are expected to improve confidence in the commercial property market in 2012, but wary bank lending criteria may negate any gains. The carbon tax for commercial ventures is seen as a good place to start, but the real difference will be made by the individuals and not by companies. Water recycling is believed to be the most popular energy efficiency feature in commercial properties, making them more rentable. Sales are expected to increase in 2012 for commercial property, due mainly to the new jobs and business growth in the region. Heavy industry is the commercial property sector which will show growth over the next 12 months. -
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Issued by: First National Real Estate For further information or to receive a copy of the 2011 Property Outlook, Gavin Gilmore, Principal from First National Real Estate Kalgoorlie, on 08 9021 2488.