As the flurry of first-home buyers entering the market steadies, property commentators are predicting the return of the investor to the fray.
Dan Molloy, managing director of the Real Estate Institute of Queensland, said that while early 2009 was dominated by the activity of first-home buyers, the past couple of months had seen a resurgence in investor involvement. "We are seeing investors looking at the marketplace again," Mr Molloy told The Australian yesterday.
"The view is that interest rates are at the bottom of the cycle and rental yields have held up very well in the current market."
Mr Molloy said the changes to superannuation law, which meant people over 50 could contribute less to super from July 1, meant baby boomers were turning back to property as an investment, following the worst of the economic downturn.
He said while first-home buyers' activity was still strong, it was not as robust as at the start of the year, a fact agreed with by the head of the Commonwealth Bank, Ralph Norris.
Mr Norris yesterday said a spike in first-home buyer applications at the start of 2009 had since declined to more normal levels. "At the beginning of the year we probably saw lending at double the rate we would normally expect in that particular category," Mr Norris told the ABC's Inside Business.
"Over the the last two to three months, we've seen that trending back to a normal level of approval."
Mr Norris said there were two factors driving the return to normal borrowing levels. "One is increasing interest rates that make these loans difficult to service for these people," he said.
"The other is the issue around employment, that many of these people, if there is a spike in unemployment, might be impacted. We've been very mindful of those issues ... and I think we've taken a pretty prudent path in approaching it."
In this year's federal budget, the government extended the first-home owners boost, which topped up the existing first-home owners grant.
Under the boost scheme, first-home buyers are entitled to $14,000 from the government if they enter into a contract for an existing home before September 30. If building a new house, they are eligible for $21,000.
Between the end of September and the end of the year, buyers of established homes will receive $10,500 and those who build a new house will receive $14,000. The boost will not be available after the end of this year.
Neil Fisher, chief executive of the Real Estate Institute of Australia, said that investors re-entering the market should be aware that interest rates were likely to rise.
"Anecdotally, evidence suggests investors are starting to come back," Mr Fisher said.
"That's generally a result of low interest rates.
"A cautionary note though, we've seen the Reserve Bank governor say interest rates are at all-time lows and say there will be increases in interest rates, probably at the start of next year. The astute investor will take that into account."
