Investors to Jump in 2010
Property investors are predicted to increase in number in 2010. With the first home buyers grant relinquished, investors are set to become the driving force of growth in the property market.
Mark Hewitt, general manager of the Australian Finance Group, stated that investors now represented about 34 per cent of all mortgages arranged by Australian Finance Group. This figure has increased by 25 percent from the previous year.
"I expect the figure to continue to rise to around 38 per cent, and possibly 40 per cent, which would be a record level," he said.
The Australian Bureau of Statistics released figures that showed that the Australian population had grown by 2.1%. This level of increase is the highest recorded since during the baby boom. This expansion of population is predicted to increase during the upcoming years and with it comes the question of, "how will we accommodate everyone?"
With the value of property steadily increasing and with the supply of available property and land diminishing, the price of property can only go up. Investors are jumping at the opportunity to obtain these sought after properties while they still can. Residential and commercial buyer's agents, Property Pursuit, say that now is the time to buy. Observant investors are seeing the demand, caused by lack of supply and are seeing a situation that can be taken advantage of.
"Property investors, able to take a long-term view of the situation, are hoping to ride a new upward cycle in property values, but right now ordinary families are sitting on their hands rather than upgrading," Mr Hewitt said.
Property Pursuit managing director, Meighan Hetherington, also added that, "We've already seen high prices and fast moving sales in the second half of 2009, so the next downturn in the market may not occur for another two years."
According to BIS Shrapnel's chief economist, Frank Gelber, Australian house prices are likely to boom for the next three years. He continued by saying that, ''This is only the beginning. The market will continue to grow, maybe not at this frenetic pace, but we need to build more to satisfy demand and we're not doing that. By the time this is over in three or four year's time, we will have built momentum into a boom."
Mr Hewitt supported this view by stating that, "Investors are returning to property investment. They have been coming back since the middle of last year to take advantage of a tight rental market."
It appears that 2010 is the ideal year for investors to act. Ms Hetherington commented by saying, "If you wait until the end of 2010, you could face exorbitant costs and limited supply."
