Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR
Stewart O’Brien from First National North Haven, expects the North Haven property market to strengthen for the remainder of 2011, on the back of a steadying market over the first half of the year. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Mr O’Brien said in the network’s Property Outlook 2011 Mid Year Update released this week. “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. “Buyer demand for, and lack of, affordable housing in the sub-$450,000 price range will see house prices trend upwards, with increases of between 1 and 5 per cent. “Limited buyer numbers for apartment/strata properties will see prices flatten out for this segment of the market, while increasing costs of building has put pressure on land prices, which are expected to trend downwards, decreasing by between 1 and 5 per cent, further adding to the affordability issue.” Mr O’Brien said he believed the rental market would see weekly rents trend upwards, increasing by between 1 and 5 per cent as a result of demand outstripping supply. “The lack of rental properties, combined with increased demand will see vacancy rates at an all time low, trending downwards by between 1 and 5 per cent,” Mr O’Brien said. According to Mr O’Brien, investor activity is expected to increase by between 1 and 5 per cent, driven by relative affordability with strong rental 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,” he cautioned. Upgraders are expected to represent the strongest growth in activity for the North Haven region.
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 O’Brien 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 O’Brien 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 O’Brien 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.” Mr O’Brien believes lower immigration levels would certainly impact on the property market, but they could be both positive and negative. “Immigration has been a benefit to keeping housing strong during and post GFC, and the housing shortage continues to underpin market prices. However, existing infrastructure is sagging under the pressure of the current population,” Mr O’Brien said. 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 O’Brien 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 Oâ€™Brien, Principal from First National North Have, on 02 6559 7007