Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Tim Holgate from Holgate First National expects the Lower North Shore property market to further steady for the remainder of 2011, on the back of a moderating market over the first half of the year due to the short supply of available stocks. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Mr Holgate said in the network’s Property Outlook 2011 Mid Year Update released this week. “Housing affordability, the threat of interest rates increasing, reducing consumer confidence and tight lending criteria from major banks will continue to impact the market in the coming six months.” In the main, house and apartment/strata property prices are expected to remain relatively flat, with any movements kept to a maximum of between 1 and 5 per cent. Land prices are expected to trend upwards, increasing by between 5 and 10 per cent. Mr Holgate believes the rental market is expected to remain strong, with vacancy rates tightening and trending downwards, decreasing by between 1 and 5 per cent, while weekly rents will trend upwards with similar increases. “A shortage of available rental accommodation and ongoing demand will underpin any rent increases,” Mr Holgate said. According to Mr Holgate, investor activity is expected to increase by between 1 and 5 per cent, driven by low interest rates, and increasing weekly returns. “However, it is the Upgraders that are expected to represent the strongest growth in activity for the region,” Mr Holgate said. 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. “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 Holgate said.
Mr Holgate considers Stamp Duty should be abolished altogether, as it would promote more efficient use of existing housing stocks. “The mooted plans for replacing it with other taxes such as a broad-based land tax, including the family home, or death duties should not be carried through and any talk of abolishing negative gearing should cease immediately,” Mr Holgate said. Lower 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 Holgate. “Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices,” Mr Holgate said. “However, existing infrastructure is sagging under the pressure of the current population.” The exclusion of any of these proposed policy changes from the recently announced NSW state budget may be an indication that the Government does not intend to take such 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 with reduced red tape,” Mr Holgate said. “There is, however, a 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, Tim Holgate, Holgate First National on 02 9427 4355