Coomera Property Market Recovery Set to Strengthen in 2012
Glenn Batten from First National Real Estate Upper Coomera says the local property market is showing lots of potential for 2012, with signs already that a slow recovery is underway.
“In the last six months, the market has been falling, but this is expected to steady as 2012 begins as a result of increased stamp duty, lower consumer confidence in both the job front, national economic management and the continuing impact of global economies,” Mr Batten said in the First National 2012 Property Market Outlook released this week.
“The key challenge facing the region’s property market in 2012 will be maintaining a sense of optimism that values will hold and gradually return to a positive growth within the next 12 months.
“Interest rate drops will also prove a significant factor affecting the Upper Coomera property market, along with the commencement of Commonwealth Games infrastructure projects, announcement of the Coomera City Centre project and the possibility of another rate cut.
According to the Outlook, residential property prices in Upper Coomera are expected to flatten in 2012 across all sectors of houses, apartment/strata and land with movements kept to below 1 per cent.
“A bottoming market and low consumer confidence may stifle activity, keeping prices stagnant in the short term,” Mr Batten said.
The rental market should see vacancy rates trend downwards in 2012, tightening by between 1 and 5 per cent due to inactive investors failing to add extra supply to the rental market and hesitant potential home buyers failing to free up rental supplies.
Weekly rent prices are expected to trend upwards, with increases of between of 1 and 5 per cent due to lower supply versus higher demand increasing competition for rentals.
Mr Batten expects investor activity in the Upper Coomera region to increase by between 1 and 5 per cent due to low property prices and rising rents equating to stronger returns and yields on investment.
“But it is Upgraders I expect to represent the strongest growth in activity in the region with high end values suffering greater falls in value than the middle to low end properties, making it the most affordable time in years to upgrade,” Mr Batten said.
The Queensland government decision to double stamp duty through eliminating the Principal place of residence concession was a further suppressing blow to an already depressed property market.
“In that regard, should there be a change of government at the upcoming state election, their promise to re-instate the concession will be a substantial boost to affordability which in turn should stimulate buyer activity,” Mr Batten said.
“The announcement of the Commonwealth Games has also given Gold Coasters a renewed sense of optimism for the coming years. Associated infrastructure and the much needed boost to tourism is an essential shot in the arm for the region.”
Interest rates are expected to decrease by around 0.5 per cent, combined with lower property values and increased affordability, should serve to stimulate buyer activity.
There has been some increases in default mortgages for the Upper Coomera region and this trend may continue for the first half of 2012 as a result of the recessed local economy creating a fragile employment market and high unemployment levels. This will mostly affect buyers that purchased at the peak of the boom some three years ago.
The introduction of the carbon tax is also expected to impact on the property market, further reducing consumer confidence.