What's going to impact the investment property market in 2015?
January 1, 2015 / Written by Rich Harvey
By Rich Harvey, CEO, propertybuyer.com.au
When Louis Christopher of SQM Research released the Boom and Bust report for 2014/2015 earlier this year, he predicted value growth of 6 to 10 per cent in the Australian property market. While this is a great omen for those seeking to buy investment property in Sydney, there are other factors to take into account before you buy as well. Between infrastructure projects, shifts between particular suburbs and even how a particular seller decides to negotiate, there's much to cover.
Taking on a buyers agent can get you a long way towards a great property for your needs, but for now, let's look at some factors that are likely to impact the investment market in 2015.
APRA measures
The Australian Prudential Regulation Authority (APRA) wrote to banks and lenders in December, effectively warning them to undertake safe lending practices. This follows a lot of different events, but notably investment lending now accounting for 37.4 per cent of all financing for residential property.
Cameron Kusher of RP Data analysed factors affecting property in 2014, and noted that APRA would be increasing its supervision of lenders due to higher risk that comes with a boosted proportion of investor financing. Mr Kusher thinks this will have the effect of steadying the investment market, which has seen a rapid increase recently.
He also thinks that tighter restrictions on lending will make it harder for first home buyers to find their way. This is why it may become all the more important to engage a buyers agent, to give yourself a great chance of securing a suitable piece of real estate.
Consumer confidence
Mr Kusher also noted that consumer sentiment is closely linked to housing growth. If buyers aren't feeling confident, then he thinks they will be less likely to take on risky moves like a home loan. And according to the most recent Westpac and Melbourne Institute Consumer Sentiment Index, people are currently not particularly buoyed. The index fell 5.7 per cent in December to the lowest point since 2011.
But while this confidence index may be low, it is never too late for a turnaround. By getting the right property advice and having a buyers agent by your side with an intimate knowledge of the market, investment in 2015 can still be a great, gainful move for any budding buyer.
Speak to us at Property Buyer about how our expertise can help you, or perhaps check out our free, detailed reports on the market.
