Low vacancy rates, share market volatility and reduced first home buyer demand is causing investors to flood back into the property market.
According to data from the Australian Bureau of Statistics, investors accounted for $7.99 billion worth of all home loans issued in April 2010 – a 1.5 per cent increase on the previous month.
“It is clear investors are taking the lead now, after the first home buyer generated boom of 2008 and 2009,” Raine & Horne chief executive officer Angus Raine said.
“It’s also fair to expect that jittery investors are shying away from the volatility of the share market, which has experienced plunging returns in April and May. They are looking for a less volatile asset class for their money, while a quality, well-located investment property can also deliver long term returns.”
Liverpool Raine & Horne principal Vince Labbozzetta said more homes are currently being sold to investors enticed by the affordability of the local market.
“You can purchase an older style two bedroom unit from $220,000 - $250,000 and expect a rental income of $270 to $280 per week”, Mr Labbozzetta said.
“If you’re looking for something a bit more modern, that will set you back around $300,000 with a rental return from $350 - $370 per week.
“Affordability and the prospects of a great return are driving investors back into the south-west.”
Similarly, the Hunter/Newcastle region has also experienced a rise in the number of properties sold to investors.
Tony Wansey, principal of Raine & Horne Charlestown, said investors could purchase a near new, two to three bedroom apartment for around $385,000 with a rental return of $380 - $450.
“Our vacancy rate is 0.5 per cent, while investor interest in our properties is up 20 per cent on last year.”