The Burnie property market will be bolstered by renewed interest in 2012, as home buyers stop marking time, after waiting through 2011 for prime buying conditions to arrive.
In the last six months, the market has been falling due to a lack of confidence in the economy and with state government policies, but this is expected to steady in 2012.
With current economic uncertainty, state budget cuts and rising unemployment dampening confidence, house sales and new housing construction will remain slow, with prices generally remaining flat.
It is expected that extended selling periods will be seen and that values will remain under pressure until the region’s economic prospects improve.
The key challenges facing the region’s property market in 2012 will be ongoing low consumer confidence due to State Government budget cuts to health, education and police. Stamp duty concessions for first homebuyers ceased in the middle of 2011 and this will continue to impact on first homebuyers entering the market, as they will need to save a larger deposit.
The government also announced in the budget, that spikes in property land taxes will be smoothed out with a reduction in the valuation cycle from 6 years to 3 years. Cost of living increases, such as rising water/sewerage charges and electricity prices, will continue to negate any gains made from high affordability levels.
Buyer confidence will improve in 2012 on the back of decreasing sentiment in the last half of 2011. Confidence has been at the mercy of local market conditions and into 2012, interest rates will be more of a key influencing factor.
Property prices in Burnie are expected to remain relatively flat across all sectors although there is potential for some upward movement of below 1 per cent, depending on what happens with interest rates.
A large choice of available properties for purchase in the local Burnie area will continue to ease pressure on prices.
Land prices may be sensitive to any decline in building approvals and an oversupply of land in some areas.
2012 could see an easing in rental vacancies, of up to 1 per cent, and moderating rental growth.
Rental markets in areas where job losses are being experienced may experience further easing of rental prices and some price drops in weekly rents will be due to people leaving areas in search of employment. This could lead to an oversupply of rental properties.
So, weekly rental prices will remain relatively flat in those regions, with the potential of some decreases of up to 1 per cent.
Any increases in investor activity are expected to be up to 5 per cent in the main, as economic uncertainty continues to play a role in investment behaviour and purchase decisions. Any potential increases will only be if investors are able to purchase positively geared properties.
The upgrader segment is expected to produce the strongest growth in 2012, as buyers seize the opportunity to capitalise on greater affordability and the possibility of lower interest rates, which are expected to further decrease by between 0.5 and 0.75 per cent.
While interest rate cuts may increase activity slightly in Burnie, the real benefit will be any relief it provides to home owners who are facing large increases in their day-to-day living expenses.
Changing Market Conditions
The introduction of the carbon tax is expected to further reduce confidence in the state economy and the government that runs it.
Commercial Property Market
Tasmania is currently outperforming all other major office markets and it will continue to set the pace until at least the first half of 2012.