New South Wales Outlook First National Real Estate State Chair, Mark Millington, anticipates New South Wales’ house prices will rise in the coming six months by between 0-5 per cent after experiencing increases of between 0-5 per cent in the last six months, due mainly to increased investor activity, as a result of low interest rates and high rental yields. He also anticipates unit and land prices in the region will rise by up to 5 per cent as lower levels of established homes are available for sale, forcing buyers to building new homes. He anticipates vacancy rates will also fall by no more than 5 per cent due given that the state’s vacancy rates are already low and he has no expectation that situation will change in the near future. Mr Millington does expect, however, that rents will rise by up to 5 per cent given the shortage of available homes for rent. Mr Millington attributes around 1-5 per cent of New South Wales’ sales activity in 2009 to investors and expects this to increase by 5-10 per cent in the first half of 2010. “Investors will continue to be lured back into the market, as the high rental yields, low interest and vacancy rates will prove too attractive to ignore. When compared directly by investors, an unstable stock market makes bricks and mortar seem a more secure option for their investment dollars,” Mr Millington said. Interest rates are predicted to increase in the first six months of 2010, and coupled with the removal of the First Home Owners Grant Boost it is expected there will be little or low impact as most of the first home buyers have already purchased and now investors are coming back into the marketplace, according to Mr Millington. “I expect there to be some negative impact on housing affordability, although most buyers currently in the marketplace seem to be aware that interest rates could not stay at the current levels for a long period of time,” Mr Millington said. The major buyers in the property market are Generation X – those aged between 32 and 45 years and it is predicted sales with this segment will increase over the next 12 months given planned new jobs and businesses in New South Wales. The proposed introduction of the Government’s emissions trading scheme was viewed by Mr Millington with some caution. He believes it will be the homeowners who ultimately will make the difference. “Emissions trading is a good place to start, but the real difference will be made by individuals, not by
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