Is now the time to buy before the rest of the pack jump in? Property investors have been tipped to return to the market in larger numbers as the slowing rate of house price declines hits home.
According to PRDnationwide, while quick recovery of the property market to a pre-GFC boom is “unthinkable”, the rate of decline in values has slowed – and may even be stagnant.
The real estate agency said that this is primarily due to what global markets face in the near future.
"Investors could now be tempted back into the property market as the rate of decline in values erodes away," said PRDnationwide research director Aaron Maskrey. He added that 33.9% of the property market is now investor financed, and is expected to increase as rental yields across the nation continue to become more attractive.
Looking at the figures from February, for example, investor financial commitment increased by $400m to hit $6.9bn.
This performance of the equity market, which Maskrey said "remains not only turbulent, but has provided returns inferior to fixed bonds over the past five years", will also improve property’s standing as a solid investment. But that’s not to say that the property market won’t face some significant challenges in the coming months and years.
"The property market continues to contract, as shown by housing finance approval's data, while bank rate increases and a tight fiscal federal budget will likely prevent any substantial green shoots in the market from gaining significant traction," the report said.
"So far unemployment has been fairly contained, but any significant change will hurt the property market."
For the time being, however, home loan affordability has increased – giving home hunters a reprieve.
"On average, Australian households now need approximately 32.9% of the family income to service their home loan,'' said Maskrey.
Have you been encouraged by recent growth figures? Have your say below, or join the debate in our property investment forum.
Queensland property market shows capital growth
City vs country: where are the best property investment prospects?
Is the property market bouncing back?
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker
Top Suburbs :
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.
We value your privacy and treat all your information seriously - you can check out