While 2009 has been a tumultuous year, the global financial downturn has helped some property investors purchase their dream home.
Laing+Simmons general manager Leanne Pilkington said the downturn had opened up new opportunities to enter or upgrade in the residential market, laying the foundations for a wider recovery in 2010.
A combination of softening house prices, low interest rates and high rents created the impetus for people to enter and upgrade in 2009.
First homebuyer activity dominated many market sectors throughout 2009 as federal and state government grants and boosts combined with record low interest rates. The low and mid tier markets in particular demonstrated strong sales and continuing strong demand as first homebuyers sought to take advantage of the grants.
“The conclusion of the first homebuyers boost on December 31 is likely to quell some first homebuyer activity, but already there are signs that investors are returning to the market in numbers and filling any gap left by the exodus of first homebuyers. Activity from investors and upgraders is likely to strengthen heading into 2010” Ms Pilkington said.
The optimistic mood means Sydney auction clearance rates are currently at a high 70.8 per cent, according to the RP Data figures from November 2009, while stock levels remain low.
House prices remained flat in September, however the rising market confidence – and resulting high demand – is expected to lead to price rises as market confidence grows.
“While interest rate rises could lead some buyers who rushed into the market to feel the pinch, rates remain at historic lows and it is unlikely there will be any noticeable fall in demand as those who were not in a position to buy this time last year are now keen to take advantage of overall favourable conditions,” she said.
“Rents and house prices are tipped to increase in 2010. Along with the possibility of further interest rate rises, those who can afford to enter the market should consider doing so now to avoid missing out.”
But despite the threat of increasing rents, Ms Pilkington said renters will receive some form of respite as a new study by the real estate agency suggests first homebuyers plan to use their purchase as an investment property further down the track.
The return of investors to the market is likely to further increase supply of rental stock; however there could be an increase in demand from young renters who missed out on the first homebuyers boost.