Victoria Outlook The Victorian property market is expected to strengthen in 2011, with house, land and apartment/strata property price increases of up to 5 per cent as a result of strong population figures and growth potential coupled with lack of available stock to meet growing demand. Land prices will also trend upwards as the cost of development will naturally keep pressure on them. Vacancy rates are expected to trend downwards in 2011, although may increase marginally by up to 1 per cent in the first half of the year. Weekly rentals are expected to trend upwards as natural increases in salaries will improve property values and in turn affect rental values. As a result, movements in weekly rentals will be by up to 5 per cent in the main. Forced sales due to mortgage defaults are expected to increase as a result of a lack of compassion by banks for those home owners suffering as a result of natural disasters, particularly in regional areas. Investor activity is expected to increase in regional areas by between 2 and 3 per cent, as the metropolitan investor market begins looking at regional areas as a cheaper and more stable return for their money. Property hot spots are seen as Shire of Wyndham, Shire of Casey and growth corridors out to the western side of Melbourne: Melton, Sunbury and to the north, Craigieburn and Wallan. First National members surveyed consider that banks should be doing more to help keep the property market healthy and robust in 2011 and should consider: • Abolishing mortgage exit fees however, this may lessen the number of properties coming onto the market and people may remain in the same property for a longer period. • Keeping their moves on interest rates in line with the RBA rather than move independently. Two additional interest rate increases are anticipated that, if delivered, have the potential to have a significant impact on the property market if wages do not increase in accord, and particularly if job security is threatened. Recent interest rate increases initially created indecision and concern for first homebuyers, however, with the right advice good turnover was still obtained. Widely anticipated electricity price hikes are expected to impact homebuyers and owners who are already looking at alternative types of energy providers.
16 First National Real Estate 2011 Property Market Outlook