SLOW AND STEADY TO WIN 2010 NSW PROPERTY RACE

Mark Millington from First National Lakeshores and First National Real Estate State Chair, expects the New South Wales property market to further strengthen over the first six months of 2010, with the potential for small increases in property prices and rentals on the back of moderate price growth over the last six months of 2009.

“House, unit and land prices in the state rose by up to 5 per cent in the last six months, due mainly to increased investor activity as a result of low interest rates and high rental yields,” Mr Millington said in First National Real Estate’s 2010 Property Outlook released this week.

“Unit and land prices rose as a result of lower levels of established homes being available for sale, forcing buyers into building new ones.

“This shortage of available homes will also drive rent increases of up to 5 per cent in the coming six months. 

“I expect prices to rise marginally over the next six months as the First Home Owners Grant Boost comes to an end and interest rates increase, and investors continuing to be drawn back to the market as the first home buyer market returns to more normal levels of activity.”

Around 1-5 per cent of the state’s sales activity in 2009 is attributable to investors and this is expected to increase by 5-10 per cent in the first half of 2010.

Mr Millington believes this ongoing trend is due to investors finding high rental yields and lower interest and vacancy rates too attractive to ignore.

“When compared directly by investors, an unstable stock market makes bricks and mortar seem a more secure option for their investment dollars,” Mr Millington said.

Sales are expected to rise as Generation X’ers continue to be lured to the state with planned new jobs and businesses.

Hot spots are considered to be the city and coastal areas where Mr Millington expects there will be consistent price growth because of lower supply of property for sale and increasing buyer demand.

Mr Millington considers the environment another major factor that could impact on the property market. 

“Up to 5 per cent of house hunters in New South Wales are looking for energy efficient features when looking to buy a new home,” Mr Millington said.

“The most popular energy efficiency features in the state are water tanks and solar hot water.”

Click here to view Property Outlook 2010.