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Media Release – [date] 2011 PROPERTY MARKET UPDATE – THE YEAR OF THE INVESTOR

Scott Bailey, Principal from First National Real Estate Max Bailey expects the Singleton/Hunter Valley property market to strengthen for the remainder of 2011, on the back of a steadying market over the first half of the year, as a result of mining expansions in the region. “This will create an ideal market for investors, who could capitalise on lower house prices, increasing rents and improved yields,” Mr Bailey 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. “House prices are expected to be consistent for the remainder of 2011, with the potential for movements of between 1 and 5 per cent. “Land prices are expected to trend upwards, increasing by between 1 and 5 per cent due to a severe shortage of both residential and rural land.” Mr Bailey said he believed the rental market would tighten further, with vacancy rates trending downwards and decreasing by up to 1 per cent. “Weekly rents are expected to trend upwards, increasing by between 1 and 5 per cent as a result of a shortage of available properties,” Mr Bailey said. According to Mr Bailey, investor activity is expected to increase by between 1 and 5 per cent, driven by the shortage of supply and an influx of mining communities resulting in better rental yields and returns. Increased second buyer activity is also driving investor growth. “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,” Mr Bailey cautioned. Upgraders are expected by Mr Bailey to represent the strongest growth in activity for the Singleton 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 Bailey 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 Bailey 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 Bailey said. “And any talk of abolishing negative gearing should cease immediately.” 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 Bailey sad. 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, Scott Bailey, Principal from First National Real Estate Max Bailey, on 02 6572 2705


Singleton, Max Bailey, NSW