An article by Nick Gardner in the Sunday Telegraph says that property investors are being advised to hold off from putting money into Australian homes, given low yields and limited prospects for capital gain. He quotes Shane Oliver of AMP Capital as saying commercial property is a better bet than residential.
If home owners and investors lose faith in the housing market, then there could be a surge in properties being offered for sale. Indeed arguably this is already under way. Ray White Beecroft, tracking statistics in the Beecroft and Cheltenham areas, notes there are more properties listed for sale in the area than at any time in the last two years. The last dramatic rise in listings was in October 2008, at the peak of the Global Financial Crisis, when many people had to offload investments to pay margin calls and other debts.
But rents are going up dramatically, and as Ray White Development Marketing Group explained in the recent RWB Investment Seminar, an investment property becomes more attractive to the individual investor in these conditions, getting tax relief on interest and negative gearing on the income. Finance the property on an Interest Only mortgage, and use income to pay off your household debts.
The article finishes on an optimistic note. "The situation is less of a problem for buyers looking for a home, with experts saying that as long as buyers choose a property that they will be happy to live in for a few years, they will have time to ride out any fluctuations in house prices, and should not be put off buying."
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment