Investors desert as the bubble bursts
By ANN-MARIE MAY
IT would seem that the real estate bubble that has powered the local economy for the past two years has burst ? or at least been significantly deflated.
And the culprit is the NSW Premier who is being accused of sending investors north of the border.
The effects of Mr Bob Carr's new taxes on investment properties are now being seen by local Real Estate agents and those in the industry.
Chairperson of the Coffs Harbour division of the Real Estate Institute of NSW, Christine Clarke, said while the home market was sailing along steadily, investors were falling off.
"People from NSW, including those from the Coffs Coast, are going to Queensland to look for investment properties," Ms Clarke said.
"The Land Tax that came into place this month and the so-called 'sellers tax' is having a negative impact on people who are thinking about investing."
Avalon Connor, of Avalon Connor Conveyancing, said most of her business is now coming from home buyers, with very few investors.
"It appears that we have lost the investors out of the market thanks to the new taxes that have come into place," Ms Connor said.
Principal of More Property and Real Estate, Steve Little, believes the change in investors is a significant one.
Mr Little said this time last year around 50 per cent of his sales were to investors compared to today's five per cent.
"I know of investors being advised to purchase outside of NSW."
He said this then had a ripple effect on overall sales.
"The number of sales over the past nine months has been significantly down because previously the majority of sales came from investors," he said.
This has added fuel to the fire on rumours that the real estate market along the Coffs Coast is joining most of NSW on its downward spiral.
Mr Little said that while the market was 'tinkling back' it wasn't a landslide.
"It's about supply and demand. Supply is now double what it was in January, 2003, but the demand is significantly down because there are no investors," Mr Little said.
He said with investors out of the market, there are more choices for vendors which makes for competitive prices.
However, Ms Connor said she didn't believe the market as a whole had dropped off, but had gone back to what it used to be ? fairly steady.
"Overall, the prices have flattened but have not come down hugely. There is the impression that prices have come down more dramatically because there were a lot of inflated pices," she said.
According to Ms Clarke, the latest predictions are that the Coffs Harbour region could see about a two per cent fall in prices this year.
"The good news is that Coffs Harbour is a much stronger city than when the last boom ended in the late '80s, early '90s," she said.