According to main players in Australian real estate, investors are showing a lot of interest in off the plan apartments with expectations of substantial price growth over the coming years.
Ray White is seeing a 6 per cent increase in investor interest in property as shares weaken and with the end last year of the boosted first-home buyer’s grant.
Analyst Michael Matusik predicts that Australian investment properties will flood the market in the near term, leading prices to soften.
An Australian Housing and Urban Research Institute report this month said 80 per cent of investors buy for long-term gain, but at least half sell within five years because of cashflow problems or disappointing capital growth. One in four investors sells within 12 months.
Developers in Sydney are reporting strong demand for new residential developments as a result of stamp duty concession introduced by the NSW government in 2010.
Tim Casey of St Hilliers Group says his company has had 650 people interested in apartments at the Caritas site in inner Sydney’s Forbes Street, for which marketing begins this week.
And Harry Triguboff’s Meriton Apartments reports strong interest for proposed apartments at the former Seven Network site at Epping, with more than 300 applications.
As there is still a shortage of housing in Australia, the property market crash predicted by some experts is unlikely to occur. However a slowdown in price growth is quite possible.
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