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Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR Mark Millington from First National Lakeshores, expects the Lake Macquarie and Central Coast property market to steady for the remainder of 2011, on the back of a falling market over the first half of the year. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Mr Millington said in the network’s Property Outlook 2011 Mid Year Update released this week. “Housing affordability, the threat of interest rates increasing and tight lending criteria from major banks will help to steady the market in the coming six months. “In the main, property prices across all segments (house, apartment/strata and land) are expected to remain flat, with any movements kept to a minimum of between 1 per cent and 5 per cent. “The lack of available land stocks, the absence of any planned land releases and the fact that it is more affordable to buy established homes than build, will keep land prices flat.” Mr Millington said he believed the rental market would remain strong, with vacancy rates tightening and trending downwards, decreasing by between 5 per cent and 10 per cent, while weekly rents will trend upwards by similar percentages. “A shortage of available rental accommodation and ongoing demand should see rent increases of mainly between 5 per cent and 10 per cent,” Mr Millington said. According to Mr Millington, investor activity is expected to increase by between 1 per cent and 5 per cent, driven by low interest rates, and increasing weekly returns. “Investors are expected to represent the strongest growth in activity due to increased second buyer activity, better rental yields and easing of banking lending criteria,” Mr Millington said. However, Mr Millington cautions that investors will monitor closely and be wary of changes to negative gearing and other tax reforms – which may impact on their intention to become active once again. “The government’s move to introduce a carbon tax is not a good one,” Mr Millington said.

“More customers will now be seeking energy efficient features when looking to buy a new home, due to the rising household cost and maintaining a healthy home budget. “A carbon tax will also potentially decrease demand for homes that are not currently adapted for energy efficiency. Although, this could be an each-way bet, but until the tax is introduced and the impacts felt, it is difficult to predict the outcome on property transactions.” Mr Millington believes stamp duty should be abolished altogether, as it would encourage higher turnover. “As long as the muted plans for replacing it with other taxes such as a broad-based land tax, including the family home, or death duties is not carried through,” Mr Millington said. “And any talk of abolishing negative gearing should be stopped immediately.” Lowering immigration levels would certainly impact on the local Lake Macquarie and Central Coast property market – but impacts could be both positive and negative according to Mr Millington. “Immigration has been a benefit to holding housing strong during and post GFC, and the housing shortage continues to underpin the marketplace,” Mr Millington said. The exclusion of any of these policy changes from the recently announced state budget may be an indication that the government has seen the error of its ways and are not intending to take matters any further. “It is hoped that the change in NSW government will see some changes in planning policy to enable developers to release more land at a more affordable development cost and reduce red tape,” Mr Millington said. “There is, however, budget loss to be recovered and this may impact on the ability of the new government to effectively move forward with their plans.” - copy ends Issued by: First National Real Estate For further information or to receive a copy of the 2011 Property Outlook, Mark Millington, Principal from First National Lakeshores, on 02 4359 1555

Lake Macquarie and Central Coast Release, NSW  

Lake Macquarie and Central Coast Release, NSW Media Release

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