The Real Estate Institute of Australia (REIA) President, Mr David Airey says there is increasing evidence that investors are starting to return to the property market, due to attractive yields, low interest rates and the ability to earn a positive return.
“First home buyers have dominated the property market for the past 9 months as a result of decreasing interest rates and the First Home Owners Grant Boost (FHOG Boost), however, we are now beginning to see signs of investors
returning to the market”, said Mr Airey.
In April, the seasonally adjusted value of finance commitments for investment housing increased for the second consecutive month.
“This is the first time investment in housing has increased for two consecutive months since mid 2007”, continued Mr Airey.
The rise in April was due to increases in finance commitments for the purchase of existing dwellings while for the investment of newly constructed dwellings, there was a decline.
“Investors are returning to the market because of strong rental returns creating positive gearing and excellent capital growth prospects”, continued Mr Airey.
The REIA’s recent Mortgage Choice Real Estate Market Facts publication indicated that average loan repayments were cheaper than median rent payments in Hobart, Darwin and Canberra.
Based on median house prices and median rents, investors in six of the eight capital cities can expect a positive return based on a 25 per cent deposit and by using an interest only loan. History shows that fortune favours the brave and astute investors may see this as a great opportunity to invest in quality property with great long term growth prospects”, concluded Mr Airey.
