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Geoff Dowling from First National Metro expects the South Brisbane property market to weaken over the remainder of 2011, on the back of a falling market over the first half of the year due to ongoing economic uncertainty. “This will create ideal conditions for investors to capitalise on lower house prices, increasing rents and improved yields,” Mr Dowling 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.” In the main, house and apartment/strata prices are expected to trend downwards, with decreases of between 5 and 10 per cent and there is the potential for land prices to flatten out. Mr Dowling believes the rental market is expected to flatten out, with little movement, up to 1 per cent, in vacancy rates or weekly rents. Upgraders are expected to represent the strongest growth in activity in the South Brisbane region, although investors will benefit from improved rental yields and weekly returns. 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 Dowling said. “A carbon tax may decrease demand for homes that are not currently adapted for energy efficiency.” Mr Dowling considers 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.

“But, replacing stamp duty with another form of tax, such as a broad-based land tax or death duties is also not supported,” Mr Dowling 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.” 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 Dowling feels 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 Dowling 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. - copy ends – Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Geoff Dowling, from First National Metro, on 07 3840 5920

South Brisbane QLD  

South Brisbane QLD - Media Release