Page 1

Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR Stewart Adlington from First National Mudgee expects the Mudgee property market to strengthen for the remainder of 2011, on the back of a steadying market over the first half of the year. “This is mainly as a result of improved local economic conditions and increased buyer interest,” Mr Adlington said in the network’s Property Outlook 2011 Mid Year Update released this week. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields. “However, housing affordability, the threat of interest rates increasing, reducing consumer confidence and tight lending criteria from major banks will serve to moderate the market to some extent in the coming six months.” Mr Adlington expects property prices across all segments (house, apartment/strata and land) to trend upwards, increasing by between 1 and 5 per cent. Although house price increases could be as much as between 5 and 10 per cent. “Expanding mining interest in the local area and the continued interest from people seeking a lifestyle change are underpinning price increases,” Mr Adlington said. “Supply is just a little short, in face of prospective population growth due to improved job prospects, which is putting upward pressure on house prices. Although, the potential for further interest rate rises will be the single dampening factor. “While Torrens Title properties have proved popular in the past, as listings for these become tighter, strata properties will become more attractive, which should result in price increases. “Land prices will increase as a result of larger scale primary production land starting to see some renewed interest on the back of strong commodity prices, however, it is still “cautious interest” which is why moderate increases are expected,” Mr Adlington said. Mr Adlington believes the rental market will strengthen, with vacancy rates tightening, decreasing by between 10 and 20 per cent and weekly rents trending upwards, increasing by between 5 and 10 per cent. “Population growth and tight supply will underpin any rent increases for the second half of 2011,” Mr Adlington said.


Investor activity is expected to increase by between 5 and 10 per cent, driven by improved rental values and increased second buyer activity. “Recent positive press about the local region and mining development will also contribute,” Mr Adlington said. “Investors are expected to represent the strongest growth in activity for the region as they take advantage of the improved rental yields and weekly returns. “However, investors will monitor closely and be wary of changes to negative gearing and other tax reforms, which may impact on their levels of interest.” 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 Adlington said. “Homeowners will also be more likely to take action to begin correcting the least energy efficient aspects of their property. “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 Adlington considers Stamp Duty should be abolished altogether, as it would stimulate the market and promote more efficient use of existing housing stocks. “This should only happen as long as the mooted plans for replacing it with other taxes such as a broad-based land tax, including the family home, or death duties are not carried through,” Mr Adlington said. “And any talk of abolishing negative gearing should cease immediately, as any changes to negative gearing may prove detrimental to the real estate industry.” 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 Adlington 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, Stewart Adlington, Principal from First National Mudgee, on 02 6372 3000


Mudgee NSW  

Mudgee NSW - Media Release

Read more
Read more
Similar to
Popular now
Just for you