Property investors are waiting until a flood of listings hit the market in Spring in order to leverage their bargaining power and pick up some bargains, industry experts say.
The predictions come after a number of analysts, led by SQM Research founder Louis Christopher, believe the market will be flooded with listings with relatively few buyers, allowing investors and upgraders to leverage even lower prices.
Australian Property Monitors general manager Anthony Ishac says investors are definitely coming back into the market as prices plateau, while other buyers back away due to interest rate pressures.
“I think it’s clear investors are going to pick up the slack, and I think that’s reflected in the finance figures over the past six months. Over the next few months I think we’re still going to see investors return to the market.”
Ishac points to the latest ABS data, which revealed that in the month of June, the value of investment housing loans dropped for the first time in four months by a seasonally adjusted 3.6% to $7.3 billion.
Ishac also points out investment spending is well above the $6.5 billion recorded in June 2009. He believes it is clear that investors are waiting until they can take advantage of the higher amount of listings expected in Spring for lower prices.
“During the past year when prices were booming, it was common for investors to keep saying that prices would fall. Generally what happens is that a lot of people waited, and now the outlook is set to stabilise, they’ll come back in.”
“I think it’s a really good time for investors right now. Rental yields, I believe, will start to improve, and I expect investors to continue looking for good deals.”
Mortgage Choice spokesperson Kristy Shepherd also believes investors are waiting until they are able to choose between as many listings as possible.
“It’s certainly tracking along. That ABS figure come from quite a high platform, and now I think it’s moving quite smoothly. But I think this is fantastic news for anyone looking to enter the property market, given prices have plateaued.”
“There are lots of investors rubbing their hands in glee, stepping into a market with listings higher than their average number. And with fewer buyers, it’s a great environment for investors.”
Shepherd points to the APM rental report for the June quarter, which revealed rental prices for houses grew by 0.7% for the year, and units grew by 3.5%. She believes investors are preparing for long-term gains, and will wait to get the lowest price possible.
“I would say, for anyone who does a decent amount of research and understands their area, there are plenty of sellers out there who will move on deals. Many are keen to move, and will get out there and try to get rid of their properties.”
However, Shepherd points out there first home buyers’ market is still performing well, “particularly for those first home buyers who have been saving for a large amount of time”.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
