Where is the market heading? MPA asks brokers for their opinions.
The results are in. It will be another strong year for Australia’s investment property market, several brokers tell MPA.
The market is already starting to increase and is showing no signs of slowing down, says Phil Couch of Loan Market in South Australia.
“Current lending conditions and growing property prices will again open the flood gates for the mum and dad investors and small syndicates, to the larger developers,” he says.
“2014 is already set to be a booming year in real estate and finance in my opinion.”
Risks for buyers
Ben Kingsley of Empower Wealth in North Melbourne agrees that investors who are sensible will have a good year in terms of capital values – but there’s one thing they should be mindful of.
“So long as they don’t get caught up in any ‘emotional’ or competitive impulse buying as can be the case in a quick moving market,” he says.
“If the market does run too hard in the next six months, expect the RBA to do something about it in terms of rates.”
Low rates, high yields
The main reasons for the market being strong and looking to remain so, are the current low interest rates and high rental yields, says Rob Lees of Mortgage Choice in NSW.
“That combination makes it very affordable, so the holding cost of an asset of the property is very little,” he says.
“I think we are getting more investor enquiries because of these conditions.”
The market is also starting to see long overdue capital growth, adds Lees.
“After the market has been going sideways for a while, we are starting to see some capital growth,” he says.
“As we start to value properties for clients, we are seeing more equity available. This means there’s more available to be able to invest.”
Supply and demand
It’s important to educate clients on auction clearance rates to give them the best possible information on the right time to invest, argues Grant Matthews of Smartline in Victoria.
“My clients follow the auction clearance rates so they know when the cycle has got momentum,” he says.
“And so last year when the auction clearance rates were high, a lot of my clients got in early and I had a really busy year. It may be the same again this year.”
For more insights from brokers on investor clients, check out issue 14.3 of MPA magazine, hitting desks in late February.
Where do you think the investor market is heading this year? Share your thoughts below.
The market is already starting to increase and is showing no signs of slowing down, says Phil Couch of Loan Market in South Australia.
“Current lending conditions and growing property prices will again open the flood gates for the mum and dad investors and small syndicates, to the larger developers,” he says.
“2014 is already set to be a booming year in real estate and finance in my opinion.”
Risks for buyers
Ben Kingsley of Empower Wealth in North Melbourne agrees that investors who are sensible will have a good year in terms of capital values – but there’s one thing they should be mindful of.
“So long as they don’t get caught up in any ‘emotional’ or competitive impulse buying as can be the case in a quick moving market,” he says.
“If the market does run too hard in the next six months, expect the RBA to do something about it in terms of rates.”
Low rates, high yields
The main reasons for the market being strong and looking to remain so, are the current low interest rates and high rental yields, says Rob Lees of Mortgage Choice in NSW.
“That combination makes it very affordable, so the holding cost of an asset of the property is very little,” he says.
“I think we are getting more investor enquiries because of these conditions.”
The market is also starting to see long overdue capital growth, adds Lees.
“After the market has been going sideways for a while, we are starting to see some capital growth,” he says.
“As we start to value properties for clients, we are seeing more equity available. This means there’s more available to be able to invest.”
Supply and demand
It’s important to educate clients on auction clearance rates to give them the best possible information on the right time to invest, argues Grant Matthews of Smartline in Victoria.
“My clients follow the auction clearance rates so they know when the cycle has got momentum,” he says.
“And so last year when the auction clearance rates were high, a lot of my clients got in early and I had a really busy year. It may be the same again this year.”
For more insights from brokers on investor clients, check out issue 14.3 of MPA magazine, hitting desks in late February.
Where do you think the investor market is heading this year? Share your thoughts below.
