Russell Burton, Principal, First National Real Estate Burton Groves and Northern Territory Chair expects the Northern Territory property market to strengthen in 2011.
“House prices are expected to increase by up to 5 per cent as a result of strong demand and a continued undersupply of vacant residential land,” Mr Burton said in the 2011 First National Property Market Outlook released this week.
“Apartment/strata property prices are also expected to trend upwards with increases of between 5 and 10 per cent as a result of strong demand, the Home North scheme, and a general shortage of dwellings and units.
“Land prices are expected to increase by as much as 10 to 20 per cent as a result of very limited supply.”
According to Mr Burton, vacancy rates are expected to trend downwards in 2011, with marginal decreases of up to 1 per cent in the first half of the year, given that they cannot really go much lower than current levels.
Weekly rentals are expected to trend upwards with increase of up to 5 per cent due to the rising demand.
Mr Burton believes banks should be doing more to help keep the property market healthy and robust in 2011 and should consider abolishing mortgage exit fees which would result in higher stock turnovers.
“The banks should also look at keeping their moves on interest rates in line with the RBA rather than move independently and adjust their borrowing percentages in the commercial sector,” Mr Burton said.
Mr Burton anticipates three additional interest rate increases slowing the market even further than it has during 2010.
Widely anticipated electricity price hikes are expected to impact the types of energy efficient features being sought by homebuyers.
“Solar water heating, although already popular, will become more so as will PV cells for power generation,” Mr Burton said.
“The key barrier to energy efficiency features becoming more of a ‘selling’ feature of a home is their prohibitive costs.”
Mr Burton said the government needs to do more to alleviate the lack of supply such as releasing more land, allowing more medium density developments, improving planning and approvals processes and controls, and introducing a national planning authority.
“Population growth is currently being stunted for the Northern Territory as a result of the chronic shortage of housing. There could be a population increase if the state were able to house more people.
“The inability of successive governments to plan for land release has meant that we release too little too late and that substantial proposed releases remain in the too distant future. There are businesses in Darwin that would like to employ more people but the inability to house them and the cost of housing has made it almost impossible.”
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