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Fears about short-term borrowers becoming more prominent in the property market have been dismissed by industry figures.
In a recent interview with The Adviser, RP Data’s senior economist Cameron Kusher said one concern for the industry is that investors are solely thinking short term and could pull out of property if other investment asset classes improve.
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He also believed investors approaching retirement may sell properties for other higher performing returns resulting in an oversupply.
“I think that’s a very real risk at the moment,” he said.
“Housing has always been a long-term asset class and at the moment investors are simply shopping around to park their money somewhere they can get a return – but are these investors in there for the short term or the long term?”
“If it’s just for the short term, then yes, you could very well see a huge amount of investor stock coming onto the market as the market’s slowing.”
Century 21 chairman Charles Tarbey said more properties coming onto the market would be a good thing and would allay concerns about a shortage of stock.
“The biggest concern that government bodies have at the moment is that investors are taking away the opportunity for first home buyers to get into the market,” he said.
“If there is stock that comes onto the market, it will help significantly given the fact that the RBA are talking about potentially introducing macroprudential tools to slow down investment.”
Mr Tarbey also dismissed the notion that a flood of properties coming onto the market could result in a ‘bubble’. Again, he cited the issue of demand outstripping supply, particularly in the Sydney and Melbourne markets.
“If investors put their property back on the market, that’s going to relieve the pressure,” he said.
“If more stock’s coming onto the market, less talk should be occurring about a property ‘bubble’.”
However, John Cunningham, managing director of Cunninghams property on Sydney’s Northern Beaches, is not noticing this trend and thinks buyers are looking for a stable, long-term strategy when it comes to property investment.
“I’m not getting any indication from the sales we’re dealing with that they [investors] have a short-term strategy,” he said.
“It might happen with off-the-plan sales with speculative investors, but they’ve always been around.”
Recently crowned Broker of the Year at the 2014 Australian Broking Awards, Mark Davis from the Australian Lending and investment Centre, said that to think property is a short-term play is a “very dangerous line to take”.
“I believe there are some very strong markets nationally and there is a lot of upside due to demand, infrastructure and flat markets in the past in certain states," he said.
“The investor market from a broker perspective is lacking and needs to mature a lot over the next decade.”
[Related: More homes is good news for brokers]
