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By: Staff Reporter
Despite the RBA’s decision to raise rates again yesterday, more than 70 per cent of ‘next time’ buyers believe now is a good time to purchase an investment property.
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According to the latest Bankwest/MFAA Home Finance Index, the number of prospective ‘next time’ buyers has moved up sharply from the 14.5 per cent recorded during the height of the credit crisis, to sit at 74.8 per cent.
In contrast, prospective first time buyers are more cautious about the market, with only 43.7 per cent believing now is a good time to buy compared to 49.7 per cent in the last survey.
Bankwest retail chief executive Vittoria Shortt said next time buyers are returning to the property market because of confidence in the economy and the jobs market.
“Historically, the market has proved a good barometer of home owners’ confidence in the economy,” Ms Shortt said.
“During the early stages of the GFC house prices slipped, then the market recovered as first time buyers flooded the market. Now the baton has been passed to upgraders who see it as a good time to buy because of a strong economy and confidence in their job prospects.”
“We are also witnessing the return of investors to the market as a tight rental market sees the potential for good rental yields.”
Ms Shortt said savvy next time buyers were aware of impending interest rate rises, and were factoring these into their decision making process.
RP Data’s senior research analyst Cameron Kusher said higher interest rates favoured investors as they would not have to compete with the first home buyers market.
“The higher interest rate environment is an attractive prospect for investors looking for some good buys at a time when it is generally becoming more difficult to service debt and the prospects of a lower level of property value growth is becoming a much greater possibility,” Mr Kusher told The Adviser.
