Feb 18, 2013

Investor activity is causing property markets to stagnate

The lack of feasible and affordable new properties and the consequential stagnation is producing a ripple effect of unfortunate consequences, writes property expert Catherine Cashmore.

Investor activity has dominated the Australian property market over the last 12 months, which is no surprise: banks are “bidding” for buyers in a highly competitive market, reducing interest rates principally on fixed-term loans outside of the Reserve Bank’s cash rate cycle, and if the right property is sourced current rental yields are also offering attractive returns.

But first-home buyers have seen their savings eroded, and as the latest ABS finance data outlines, intermittent first-home buyer “cash injections” — or the oft-quoted myth that rising yields are pushing greater numbers into the market — are having scant effect. Saving a deposit and sourcing a suitably affordable property is no easy task.

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4 thoughts on “Investor activity is causing property markets to stagnate

  1. Shaniq'ua Shardonn'ay

    Very true. I can’t see either party with the guts to play with negative gearing. It’s interesting that the more investors you have in the market the poorer the quality of the housing. The Dog Boxes going up around the inner city being a case in point.

  2. Hamis Hill

    Should this be an election issue?
    “..will consequently bear an effect on the future of both our real-eatate market and economy as a whole” argues that it does.
    The nation as a whole has an interest that this problem be solved but?

  3. Coaltopia

    Thanks for this… here’s a link I’d like to share regarding ageing populations:

  4. Hamis Hill

    What! Only threeposts?
    Has Catherine hit some sort of Blind Spot in the consumer psyche?
    Affecting “The economy as a whole” and very few are “interested”?
    Or is being overly endebtedted into a collapsing asset class a sore spot engendering aversion among those so afflicted?
    Well the problem wil not go away, so bear up people and bear the consequenses of past error, and at least avoid the whole corrupt edifice crashing down upon you while you are still “in residence”.

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