Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Paul Angell from First National Real Estate Mooloolaba expects the Mooloolaba property market to moderate over the remainder of 2011, on the back of a falling market over the first half of the year. “This will create ideal conditions for investors to capitalise on lower house prices, increasing rents and improved yields,” Mr Angell said in the First National Property Market Mid Year Update 2011 released this week. “Restrictive bank lending criteria is holding back the property market as banks adjust their risk profiles for further falls in prices. Even though now is an ideal time to purchase, people are holding onto their money and waiting to see what will happen to the market, property values, the economy and the world.” Mr Angell said property prices across the board for houses, apartment/strata and land, are expected to flatten out, with movements kept to below 1 per cent. He believes the rental market will flatten out, with marginal movements of up to 1 per cent, in vacancy rates or weekly rents. According to Mr Angell, growth is expected to come from Upgraders, representing the strongest growth in activity in the Mooloolaba region. “Investors are noticeably absent from the market, as a result of rising interest rates making property an unaffordable investment option, and they are demonstrating nervousness around their willingness to commit, despite prime market conditions,” Mr Angell 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. “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,” Mr Angell said. “A carbon tax may decrease demand for homes that are not currently adapted for energy efficiency.
“Government charges, water and power are up more than 50 per cent in south east Queensland already and predicted to go higher before applying a carbon tax based increase.” Mr Angell believes Stamp Duty should be abolished altogether, delivering on the promise to remove all indirect taxes such as Stamp Duty, when the GST was introduced as well as stimulating market activity particularly with investors. “But, replacing stamp duty with another form of tax, such as a broad-based land tax or death duties is not supported,” Mr Angell said. “A broad-based land tax including the family home would ultimately become a tax on tenants and it would reduce investor interest in Queensland. “Death duties should also be taken off the negotiating table, and any talk of abolishing negative gearing should cease immediately as it may eventuate in a drop off in rental properties and drive up rents.” The exclusion of any of these proposed policy changes from the recently announced Queensland state budget may be an indication that the Government does not intend to take such matters any further. Mr Angell said the lack of State Government action on new land releases is stifling the market. “The land segment is suffering as a result of high development costs,” Mr Angell said. The Queensland Government has just put a clamp on head works ($28K per block) but developers say they have not touched the water rates and that adds another $25K on top of that, so effectively it costs around $50K to develop a single block of land which is discouraging for investors. Mr Angell hopes major projects earmarked for the Mooloolaba region will go ahead and inject additional capital into the local economy. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Paul Angell, from First National Real Estate Mooloolaba , on 07 5444 0800