 Property investors start their return
Savvy investors are now pouncing on Australia's property market, as the wave of interest from first home buyers calms.
During most of 2009 it has been first home buyers dominating the market, taking advantage of government hand-outs and record low interest rates. Many consumers wishing to purchase investment property sat and waited, as house prices were pushed up.
But, now the boost to the First Home Owner Grant is being wound back and interest rates are rising which is resulting in many first home buyers rethinking their home ownership plans.
Now, investors are waiting for prices to stabilise or even fall before they consider a purchase.
Ray White chairman Brian White believes that gradual, small rises to the interest rates will not hurt the housing market recovery or have much impact on housing values.
“I think we can afford a couple of interest rate rises and the confidence in the economy and the real estate market will over-ride any concerns about where rates are headed.
“There's no reason why this highly active market shouldn't continue and the cash rate is still only 3.25%.”
Last week's interest rate rise amounts to an extra $45 per month on a $300,000 mortgage.
The ANZ bank is forecasting the cash rate to reach 4.25% by next March.
The Australian Bureau of Statistics has revealed that there is a slowing of first home buyers, leaving developers hoping that investors as well as second and third home buyers will now boost the housing market.
First home buyers are now retreating from the market, as the boost to the first home owner grant is reduced. Many rushed to secure property earlier this year when interest rates were slashed to record low levels and the grant was increased as part of the Rudd government's first stimulus package, in response to the global financial crisis.
Now, it is hoped that investors will return to fill the gap.
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