Investors creating challenging market for other buyers: Bob Guth

Investors creating challenging market for other buyers: Bob Guth
Andrea DixonOctober 13, 2014

Investors are making it increasingly difficult for other buyers to enter the market, according to Bob Guth’s weekly Realestatement.

This is particularly challenging among the apartment market in Sydney, Melbourne and Brisbane.

He notes that more than a third of all occupied housing in Australia are rentals, with almost half of all new housing loans in 2014 defined as investment loans.

“It’s unsurprising that competition from investors has resulted in many would-be homebuyers forgoing the idea of owner-occupation. Instead, they are joining the investor ranks to gain a foothold in the marketplace,” says the director and chief auctioneer of Sydney agency BradfieldCleary.

Recent first-home owner figures show that home loan applications are at record lows while many first-time buyers decide to gain a foothold by turning to investment.

The Australian Bureau of Statistics records that 64% of the population in NSW is in Sydney and that is projected to grow to 74% by 2061.

This will drive housing demand, further push up prices and have a spill on effective on values of established property similar to Europe and Asia.

Bob Guth points out that declining interest rates has helped owner-occupiers and investors to buy residential property and this has underpinned housing performance for the last two years.

“The major banks cut fixed-term interest rates in July 2014 and this is fuelling greater interest in this class of asset,” he says.

Records are not likely to be set this spring. Bob Guth believes the market will experience more property volume from now.

 

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