Changing lanes
Marty Maher
The spring-summer outlook for the coastal property market looks very positive for several reasons. The obvious reason is continued low interest rates and the fact that they will be stable for some time. The strong metropolitan property market is providing both positive sentiment and equity to assist those property owners in buying a lifestyle or investment property.
decision to make. There are two less obvious factors that are occurring in this cycle, that were not as prevalent in previous cycles. They are self managed super funds (SMSF) being increasingly active in the property market and share investors changing investment lanes to the stability of real estate because of recent past experience.
Investment property loan growth, over the past four years, has far outstripped growth in loans for owner occupiers. There are several factors that have contributed to this. The most obvious is affordable finance as I have already mentioned. When the difference between your rental return and your loan costs are low and property values are rising, it is an easy investment
As the resurgent stock market continues to increase in value, investors, especially small to medium investors (and SMSF), get nervous. In October 2007 the All Ordinaries Index peaked at just over 6800, by March 2009 with the GFC in full swing, it was a little over 3100. At writing, the Index is around 5600 points. With the GFC still firmly implanted in the back of
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people’s minds, many stock market investors will be considering their options. At low interest rates, term deposits are not attractive. The stability and current buoyant nature of real estate is and we are seeing this at the coal face. Never underestimate the power of the “touch it� syndrome. Australians have always had a love affair with property and the comfort of being able to walk up to their investment and touch it, makes many small investors sleep well at night. This adds another layer of participants to an already active property market and spring (and summer for the coast) is when it is most active. If we can ever be of assistance in any real estate matter please do not hesitate to call.
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