A majority of investors would purchase a property under the National Rental Affordability Scheme (NRAS), a recent poll suggests.
According to the latest Smart Property Investment straw poll, of the 107 voters, 62.6 per cent of respondents said they would purchase an NRAS property as an investment.
Flynn De Freitas, principal of Omega Investments, said while NRAS properties had a “bad name” in the past due to massive kickbacks by developers and limitations on how much investors could borrow, most of the issues have now been resolved.
“Having addressed all those negative things, NRAS has now become a very attractive option for investors,” he told Smart Property Investment.
“NRAS properties are located in areas where there is a large rental demand and there is an undersupply of properties. Generally, they are in regional areas, in growth areas.”
As NRAS properties are located in growth areas, Mr De Freitas explained there will be a large supply of houses coming online, so investors are unlikely to experience booming capital growth.
“But you will get some capital growth because as new houses are built, there will be an upward trend in house prices,” he said.
However, wHeregroup’s Todd Hunter told Smart Property Investment that he does not see any value in the NRAS.
“I haven’t heard of anyone who has made money from property, including those on my blog who have commented that their properties haven’t appreciated at all. Not even one case,” Mr Hunter said.
He points to kickbacks and poor location of the NRAS properties as factors undermining its investment potential.
“People definitely have to do their homework in relation to knowing what other properties in the area are selling for in relation to the property they are purchasing to see whether there are kickbacks built in,” he advised.
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