Property investors switch to 'sell' mode

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More data reveals that the reign of property investment may be on the way out, as more and more property investors are switching to ‘sell’ mode.

The latest survey of investor intentions by Investment Trends has found that more respondents planned to sell than buy an investment property in the coming month.

Since the index's inception in September 2011, those who have said they intended to buy have consistently outnumbered those who say they planned to sell, according to Fairfax.

"For the first time there's actually a negative intention," Investment Trends senior analyst Recep Peker told Fairfax.

This comes on the heels of the latest figures by RP Data revealed that capital gains and rental yields are diminishing, after median weekly rental rates for both houses and units across the capital cities remained unchanged in the quarter to September.

Meanwhile, official figures released on Friday suggest the heated property market may be correcting itself as housing finance is on the decline.

According to the Australian Bureau of Statistics, the total value of home loans fell from record highs in August, dropping 1.2% to $2.80 billion. This included decreases in the value of loans to both owner occupiers and investors. The value of loans to owner occupiers fell by 2% in August, while for investors it fell by 0.1%. 

Although housing demand is still at record highs, Craig James, chief economist at CommSec says the high cost of housing and expected boost to housing supply will start to dampen demand. 

“High prices are inducing some caution by those buying homes with the intention of living in them. And investor housing activity is also expected to soften as record approvals to build new homes eventually translate to more homes on the market for either rent or for sale,” he said.


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