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Investor confidence stalls in the property market

  • Tags: property investment, property trends
Since late 2008 the number of loans to first-time buyers is substantially outweighed by those to existing occupiers and investors as first home buyers rush to take advantage of the increased government grant. There is no doubt that the incentive has driven a large number of First Home buyers into the market.

Normally an increase in lending to first-time buyers would also show similar increased lending to investors and existing homebuyers. Part of the reason is that investors are not getting the first time grant and when you have to pony up your own money instead of the government’s you tend to think more carefully before deciding to take the plunge.

Michael Matusik, director to Matusik Property Insights, recently ran a website poll of just over 500 residential investors and found that unemployment concerns and fears about how the economy will evolve this year are key reasons why investors are not entering the market as much as one would expect. One in five were still waiting for prices to fall. Half of those surveyed believe that next year will be a better time to invest.

Consumer sentiment figures released earlier in April by the Westpac – Melbourne Institute Survey tend to confirm the sentiments expressed in the Matusik poll. The survey of 1200 people found pessimists still outnumbered optimists and with the prospect of more unemployment, that is unlikely to change soon. Matusik however, says too many investors wait for the comfort of the masses before they buy. He says fixed rates are starting to increase, as are property prices at the bottom of the market.

The big headline of the past few weeks was the ABS statistics that showed over the year to March 2009 the price index for established houses for the weighted average of the six capital cities decreased by 6.7%. These numbers come as no surprise to people working in the property market or selling during 2008. The settled sales for the June quarter of 2008 included some impact of increased interest rates but the cumulative affect on prices from the interest rate hikes that started during the last election and continued through the first half of 2008 really showed up in the statistics later in the year.

On the other hand during the first quarter of 2009 median prices of houses sold in Palm Beach and Elanora actually increased by $13,500 and $15,000 respectively. If our experience over the past three months as we sold 73 properties for a total of $26,330,000 is any indication when our sales and those made by other agents settle and find their way into the statistics this upward trend will be more obvious.

Only time will tell whether the one in five investors to Matusik’s survey are correct and property buying will be better next year.
    Investor confidence stalls in the property market
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