First National Real Estate State Chair, David Hamilton, anticipates Queensland’s strong Gold Coast Market will ensure house and unit prices rise in the coming six months by no more than 5 per cent after experiencing increases of between 5-10 per cent in the last six months, due mainly to increased first home buyer activity and a shortage of housing stock.

He anticipates vacancy rates in the region will stabilise in the first six months of 2010 and rents rise by no more than 5 per cent, due mainly to a rental property shortage.
 
Currently, Mr Hamilton attributes around 10-20 per cent of Queensland’s sales activity to investors and expects this to increase by more than 20 per cent in the first half of 2010.

“Investors will continue to be attracted back into the market, as opportunities grow for income and capital gains, and return on shares move below  5 per cent,” Mr Hamilton said.

“Investors will now begin to replace first home buyers in sales activity and the removal of the First Home Owners Grant Boost, through which many renters bought their own place, will mean the volume of available rental properties has shrunk.

“If investors do not come into the market there will be some softening at the bottom, particularly in cheap three storey walk-ups.”

Interest rates are predicted to increase in the first six months of 2010, and in the light of increased investor activity and reducing numbers of first homebuyers, it is predicted affordability may become more difficult.

“The increases have been telegraphed by the Reserve Bank and factored in,” Mr Hamilton said.

“High inflation, because of the amount of stimulus money going into the economy and government competition for funds could lead to a more than 1.5 per cent increase and throw the whole thing out.”

The major buyers in the property market are Generation X – those aged between 32 and 45 years and it is predicted sales with this segment will increase over the next 12 months given the attractiveness of the Queensland market, particularly the Gold Coast and Tweed region.

The proposed introduction of the government’s emissions trading scheme is expected to delay any real movement on more energy efficient housing, according to Mr Hamilton.