Property Outlook - Kosciusko

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Property Outlook 2010 New South Wales - Kosciusko

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  • The 2010 Property Outlook


























  • 2 First National Real Estate 2010 Property Outlook

    2010Property Outlook

  • 3First National Real Estate 2010 Property Outlook


    Much of the detailed property commentary provided in the Australian market is conducted and presented by analysts a long way from the high street where most property transactions take place. First National Real Estate has more than 400 members on the ground in cities, suburbs and country towns across Australia.

    So, we undertook a survey of our member agents to compile a picture of the property market for Australia overall, on a state-by-state basis and importantly, at the local level.

    Consensus amongst our members is that property prices will stabilise and slowly increase through 2010.

    Supply and demand are still the major issues for the property market. Not enough dwellings are being built to cater for demand from record levels of population growth. This will continue to put pressure on rental markets and drive price growth into the near future.

    Two other key factors affecting the property market in Australia over the coming 12 months will be higher interest rates and uncertainty around employment.

    Potential exists for employment levels to remain steady, if not grow due to increased demand for Australias resources in the mining and agricultural sectors. However, there is an ongoing impact on many businesses from the Global Financial Crisis, from which Australias recovery is still uneven.

    Opportunities exist for investors and second time buyers to upgrade while, despite forecast increases, Australia will continue to enjoy relatively low interest rates.

    Tightening lending policies by banks may also impact on the market.

    disclaimer: There are many uncertainties in forecasting movements in the market such as government policy changes, interest rate changes and global economies. Therefore, the forecasts in this report should be taken to be indicative of market directions. First National takes no responsibility for actions taken on the basis of this report and we encourage all vendors and buyers to conduct their own research.

  • 4 First National Real Estate 2010 Property Outlook

    Taking Stock 2009 In Review

    While much of the world is still crawling its way out of the Global Financial Crisis, Australia seems to have weathered this storm better than most countries, thanks in chief to initiatives and incentives put in place by federal, state and local governments but also at a local level by businesses like those estate agencies in the First National network.

    House, Unit and Land Prices

    While many commentators and experts forecast doom and gloom for the property market in 2009, First National stated in its January 2009 Property Outlook that the network believed where prices fell initially, this was with properties that more accurately reflected their true value compared to the over-inflated prices they had enjoyed. The expectation was that prices would stabilise throughout the year and perhaps experience some small growth towards the latter half of the year.

    As First National anticipated, Australia turned the property corner as early as January 2009. Evidence of how correct we were is found in the responses our State Chairs provided in the recent survey we undertook, for property prices in each state. Across the board, the networks State Chairs responding to our survey indicated that house prices in their respective states had risen in the last six months of 2009 by an average of around 5 to 10 per cent.

    Victoria experienced an increase of between 10-15 per cent while South Australia, Western Australia and Queensland all reported house price increases of between 5-10 per cent and New South Wales and Tasmania reported less than a 5 per cent increase.

    The median house price in Australia climbed almost $20,000 during the September 2009 quarter, the highest level median prices have reached since the december quarter in 2007.

    A similar picture arose for apartment property prices, where State Chairs reported rises of between 5-15 per cent as well. As with house prices, apartment property prices in NSW rose by less than 5 per cent, while South Australia, Western Australia and Queensland all reported house price increases of between 5-10 per cent and Victoria again enjoyed increases of between 10-15 per cent.

  • 5First National Real Estate 2010 Property Outlook

    Land prices were reported as having risen by between 5-10 per cent in all states where data was available. The key reason for this increase in land prices is scarcity of land available for residential developments.

    First Nationals belief is that the key reasons for prices rising in the last six months were the First Home Owners Grant Boost, low interest rates and shortage of housing stocks. These factors combined to help put a floor under prices, stimulating activity and demand.

    Rentals and Vacancy Rates

    Over the last six months of 2009, vacancy rates and rents have either stabilised or risen by less than 5 per cent in all reported cases. Whilst demand still exceeds supply, which would normally result in landlords being able to increase their rents, this was balanced by the increasing number of tenants claiming they are unable to meet the high prices currently being asked.

    Many first home buyers did their sums and realised they were better off taking advantage of the government stimulus initiatives and low interest rates to buy their first home, where mortgage repayments would be less than current rents.

    These factors have helped stabilise the rental market and kept most rent increases to a minimum.

  • 6 First National Real Estate 2010 Property Outlook

  • 7First National Real Estate 2010 Property Outlook

    Michael Henley from First National Real Estate Kosciusko has seen the property market in the Snowy Mountains stabilise in the last six months, a trend which he expects will continue for the first six months of 2010.

    Sales should increase as Generation Xers continue to be lured to the Snowy Mountains due to the attractiveness of the area.

    Planned land releases will provide home builders an opportunity to build more affordable family homes, which will reinvigorate the market to some extent.

    The big movement in the last half of 2009 came from investors, where activity increased by more than 20 per cent. For the coming six months, it is expected this will continue to grow, but slow right down to an increase of up to 5 per cent.

    Interest rates are expected to continue to increase for the first half of 2010, possibly reducing buyer confidence in the Snowy Mountains market, depending on the size of the rate change which will drive the market down.

    The environment is increasingly becoming a factor affecting the Snowy Mountains property market, where more than 30 per cent of house hunters in the region are looking for energy efficient features. The most popular are water tanks, approved garden watering systems, native drought tolerant gardens and solar hot water and power.

    The proposed introduction of energy efficiency regulation of new dwellings would introduce a six star-rating system aimed at reducing Greenhouse gas emissions. Overall, Michael believes this is a good thing and a chance for the property industry to have an even more positive effect on the environment. However, the government should only regulate new homes as older homes would be unfairly discriminated against and their values decreased.

    Michael also believes the governments emissions trading scheme has the potential to delay any real movement on more energy efficient housing.

    KosciuskoRegion and Surrounds

  • 8 First National Real Estate 2010 Property Outlook

    2010Property Outlook

  • 9First National Real Estate 2010 Property Outlook


    There seems to be general consensus amongst the First National Real Estate networks State Chairs with their outlook for the coming six to twelve months. All, with the exception of Tasmania, predict that there will be ongoing price increases for house, land and units and a rental market that will benefit from ongoing stability, but with the potential for small rent increases.

    House prices

    First National expects that with the exception of Tasmania, house, land and unit prices will continue to increase in the next six months, due to lack of housing stock and a growing economy, particularly in the resources sector. Tasmania is expecting to see prices stabilise over the next 6 months.

    The end of the First Home Owners Grant Boost initiative by the Federal Government will further entice investors back into the market. While conditions are ripe for investors and second time buyers to pick up some real bargains, the removal of increased first home buyer activity will make competition more realistic and purchases more affordable.

    Population growth will continue to be an issue for Australia for some time to come. It is expected to be the home of more than 35 million people within the next 40 years. Sydney, Melbourne, Brisbane and Perth combined will have almost as many people as the entire Australian population today.

    Current high immigration levels and tight land supply means there w