Property investors have largely been absent from Australia’s property rebound, which so far has been driven by owner-occupiers (including first home buyers):
However, The AFR believes that property investor interest will reignite in 2021; although it will look far different to previous cycles:
Many investors have had a tough year. Apartment rents in inner Sydney and Melbourne have certainly fallen, vacancies are at historic highs and values have weakened.
With no foreign students and no migration, the vacancy rates in inner Sydney and Melbourne are extraordinarily high…
However, away from the inner suburbs of Sydney and Melbourne, the picture is quite different…
REA Group chief economist Nerida Conisbee says the next investment market will be different to the last. “It will be about regional activity, like south-east Queensland and regional NSW,” she says.
I couldn’t agree more.
As we know, mortgage rates have collapsed to record lows:
At the same time, rents continue to grow outside of Sydney and Melbourne, according to CoreLogic:
Rental yields across most other markets are also juicy, especially when considered against investor mortgage rates below 3%:
Thus, neutrally or positively geared properties are available outside of Sydney and Melbourne which should inevitably entice investors into these markets.
