The latest John McGrath Market Review has identified that while low interest rates may mean more sales, prices are generally unlikely to rise, however specific regional markets have been pointed out as investor hot spots in NSW and Qld.
“Buyer enquiry is up,” said McGrath Estate Agents CEO, John McGrath, in his Market Review - Winter 2012.
“In March, the country’s largest mortgage broker, AFG, had its second biggest month ever in NSW since their index commenced in 2004 with $842 million in new lodgements. While this clearly indicates more buyers are out there, they remain very price sensitive.”
Mr McGrath said while affordability was improving, buyers were holding off on making decisions due to concerns about overseas economic factors, soft business confidence at home and federal political instability.
“Once we see some positive and sustained economic change overseas, I believe our property market will begin a long and slowish recovery over a three to five year timeframe,” Mr McGrath said.
“Markets have a herd mentality and following the crowd gives people a much needed sense of security especially in this time of economic volatility,” he continued.
“Buyers need to be brave – this is exactly the type of market they will look back on and say ‘I wish I’d bought in 2012.’”
“A significant new trend is city investors looking to regional areas for value and strong yields,” he said.
“Yields of 6-8 per cent (much higher in mining towns) are now common in Australia’s regional areas and better transport links are enabling city investors to explore more affordable markets relatively close to home.”
Sales activity remained sluggish for properties valued above $1 million, he added.
For regional markets, Mr McGrath likes Bowral, Charlestown (Newcastle), (Newcastle), Kambah (ACT) and Katoomba for houses, while Lighthouse Beach (Port Macquarie), Palm Beach (Gold Coast), Southport (Gold Coast), Terrigal (Central Coast) and Towradgi (Wollongong) were his preferred locations for apartments.