It is likely that Australia is entering a ‘new property cycle’, according to national accounting firm Chan & Naylor.
Increasing interest in property investing is signaling a new wave of confidence, director of the firm, Ken Raiss, said.
“Anecdotally we are seeing more interest from property investors both new and old,” said Ken Raiss, a director with Chan & Naylor. “Whilst this increase is modest, it indicates new confidence and the likelihood of a new property cycle.”
With a 50 basis point rate cut yesterday, Residex CEO, John Edwards, said that this would also help increase investment activity.
It will provide a much need confidence boost for consumers, Mr Edwards explained.
“Without some form of stimulus, we would have been likely to continue seeing housing values decrease across much of Australia,” he said.
While these decreases had been seen in New South Wales in recent months, Mr Raiss said that there had been a gradual growth of investors looking to alternative modes of investing.
Self Managed Super Funds is one area in which he said there was significant growth, showing a shift of thinking away from higher-risk investments.
“For property investors looking for less financial risk and greater surety of equitable return, treating property investment as an exercise in financial diligence rather than of the heart is an important development in this market,” said Mr. Raiss.
However, the health of the market lies heavily on the banks, who are yet to announce their own rate movements, he said.
“The banks reducing their own rates in line with the RBA will act as a confidence booster which in turn will increase expenditure on consumables and investment.”