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Jessica Darnbrough
Flatter property prices are likely to suit investors moving forward.
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According to recent research by RP Data, property prices grew by 4.7 per cent over 2010, significantly lower than the 20 per cent achieved in 2009.
But while the flatter prices will make for uninspiring capital gains, RESI’s chief executive officer Lisa Montgomery told Market Focus that investors will continue to benefit from a tighter rental market.
Nationally, gross yields for apartments and houses are 4.7 per cent and 4.0 per cent respectively.
First home buyers have well and truly pulled back from the market and are looking to rent, pushing vacancy rates lower.
“Investors are actually sitting in the wings right now. They are waiting to see what is happening with property prices and with interest rates,” she said.
“This year we will see an increase in rates, but those savvy property investors that have prepared themselves to get into the market, will take advantage of the flatter property prices.”
