With clear evidence that first home buyers are presently sitting on the sidelines, as many take themselves out of the property game due to interest rate uncertainty and talk of a housing bubble, investors have virtually been handed the pick of the market on a platter!
Not only have these players left the field and hence removed much of the competition in the sub-$500,000 price range, housing values continue to remain stagnant and bidding wars at auctions are a thing of the past.
These conditions are creating the “perfect purchasing storm” so to speak, giving cashed up investors who are ready to either break into the market or make their next move, plenty of buying power and the ability to pick up property below intrinsic value.
In my opinion, and in the informed opinion of many experts and analysts, there are no real signs that there is an impending bubble about to burst when it comes to capital city property prices. In fact quite the opposite is on the cards and things could turn around as early as the end of this year.
If we continue to see strong, consistent employment growth and a thriving Australian economy due to the resources boom, there’s no reason consumer confidence won’t begin to lift and people will once again start spending, particularly those who have put off their first home purchase.
There is anecdotal evidence that more tenants are saving for a home deposit, particularly as reports surface in the media regarding a rental boom in the not too distant future as our population continues to grow and the housing undersupply worsens. It is expected that rents will increase significantly over the year as vacancy rates remain tight across all major cities.
In other words, this current buyer’s market will not last indefinitely and those who are prepared to take advantage of it will undoubtedly have an edge.
Some investors are obviously seeing the potential in today’s housing sector, with bank lending for investment properties up by 3% for December last year.
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