Media release – Date MILDURA PROPERTY MARKET SHOWING SIGNS OF RECOVERY Tim Aldridge from First National Real Estate Collie & Tierney expects the 2012 Mildura property market to be quite subdued and says while there are encouraging signs, there is still some distance to go. “The current steady market in Mildura is set to continue moderating in 2012, as a result of planned developments underpinning consumer confidence in the region,” Mr Aldridge said in the First National 2012 Property Market Outlook released this week. The key challenges for the 2012 property market are seen by Mr Aldridge as local employment remaining steady and some real activity on the riverfront to help sustain consumer confidence. Significant factors affecting the local property market in the coming six months are the completion of Big W providing employment as well as act as another drawcard for the region. The completion of the city centre with shading is also critical and will provide a focus point for the region. “These two main projects will help improve confidence in the region and help stimulate activity in the marketplace,” Mr Aldridge said. “On the retail front, while the city heart redevelopment project has pushed many small traders out of business, there are signs this is changing now the works have been completed.” According to the Outlook, residential property prices in Mildura are expected to remain flat with movements kept to below 1 per cent. “Currently, the homes are very affordable but buyers are still nervous about the economy and so are very cautious,” Mr Aldridge said. “Owner occupiers and investors are still very cautious about the state of the national and global economy and this is showing in consumer behaviour. “Investors from outside the region are preferring houses as investments for better yields, so keeping a lid on any apartment/strata property price increases. “A lack of good available parcels of land and the usual planning approval delays, means land will remain scarce in the region for at least another 12 months, which mean land prices will remain stable. “The local Mildura council has stalled approval or the Mildura South building overlay which houses the most popular residential area in the region, producing a 12 to 18 month lag in approvals for residential subdivision in the area.” The rental market in Mildura is expected to perform well in 2012, with local employment levels expected to remain steady and in excess of 100 homes being built in the region under the Government’s National Rental Affordability Scheme (NRAS), rents are expected to moderate
with increases kept to below 1 per cent over the next 6 to 12 months, following a period of rising rents over the last 6 months. “It is expected vacancy rates will increase moderately over the next 2 to 3 months, increasing by up to 5 per cent, until the 100 NRAS homes become available,” Mr Aldridge said. “Good quality and well located properties will continue to attract higher rentals.” Mr Aldridge expects investor activity is expected to be in the vicinity of up to 1 per cent as a result of ongoing nervousness in the economy and yield expectations of more than 6 per cent. “But it is Upgraders who will produce the strongest growth in activity in the Mildura region as they capitalise on the great value on offer and with escalating building costs buyers finding better value from established homes,” Mr Aldridge said. Interest rates are expected to decrease by between 1 to 2 per cent, which is expected to improve consumer confidence and make property even more attractive. The economic events in Europe and America are impacting on buyer confidence. People are already experiencing what happens when they over-commit themselves. The carbon tax is expected to have an impact on the property market, further reducing consumer confidence. “For commercial properties, the carbon tax is just hot air, where something more practical is required at the commercial property owner level,” Mr Aldridge said. Water recycling is considered the most popular energy efficient feature in commercial properties, making them more rentable. Sales of commercial properties are expected to increase in the coming 12 months as a result of new businesses being attracted to the region, especially with the riverfront and city heart projects. Heavy industry is the commercial property market sector expected to show the strongest growth over 2012. -
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Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Tim Aldridge, Principal from First National Real Estate Collie & Tierney, on 03 5021 2200.