Login
ISCOVER
Record low interest rates are pricing first home buyers out of the market, according to John Edwards, founder of Residex.
In a monthly property market update, Mr Edwards said that while low interest rates are benefiting investors, they are driving housing prices beyond the reach of many first home buyers.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
“We are in a period where interest rates are low. This will be helping investors, but for the first home buyer, the cost of housing is still relatively unaffordable,” he said.
Mr Edwards added that the recent changes to the laws governing self-managed super funds have resulted in increased investment in the property market.
“The ability of self-managed super funds to now structure and use contributions for negatively geared property means a new class of investor is active in the market,” he said.
A third driver of increased investment in the property market, according to Mr Edwards, is decreased confidence in the stock market.
“Private investors are seeing high risks in the stock market due to the likely winding back of the United States’ quantitative easing monetary policy.
“As a result, they are looking for low risk, higher yield assets such as housing,” he said.
“In short, the growth period that is underway is being driven mainly by investors in a market where most cities have a shortage of stock.”
