Powered by MOMENTUM MEDIA
realestatebusiness logo
Subscribe to our newsletter SIGN UP

Property activity heads towards ‘normal’ levels

18 December 2009 Reporter

The number of investors dealing in the Australian property market is expected to return to the long term average in 2010.

According to data from the Australian Bureau of Statistics, investors accounted for approximately one third of all transactions prior to the global financial crisis.

The highest proportional split of investors to owner occupiers occurred back in October 2003 when investors represented 40 per cent of the overall market.

As of October 2009 however, investors accounted for just 26 per cent of all property transactions.

Advertisement
Advertisement

“Investors as an overall proportion of the market are likely to increase in 2010, however we need to keep the impact investors may have in perspective,” RP Data’s national research director Tim Lawless told Real Estate Business.

“The ‘normal’ rate of investment in the property market is where investors account for about one third of all transactions and in all likelihood we will see investment in the Australian property market move back to this long-term average and more than likely surpass it,” he said.

According to Mr Lawless, investors are much less influenced by interest rate hikes due to the tax benefits associated with negative gearing.

“Additionally, investors will be motivated by improvements in rental rates which are likely to provide stronger rental yields over the coming years.  There will be fewer first home buyers in the market place, a factor that investors will welcome as it means less competition with this segment going forward,” he said.

Property activity heads towards ‘normal’ levels
default
lawyersweekly logo
FROM THE WEB
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
Do you have an industry update?
REAL ESTATE BUSINESS NEWSLETTER
Ensure you never miss an issue of the Real Estate Business Bulletin. Enter your email to receive the latest real estate advice and tools to help you sell.