Property investors rush back to market

[Property Dude]

PROPERTY investors are storming back into the market, lured by historically low interest rates and a distrust of the stock market after its worst 12-month performance in a generation.

Mortgage brokers say investors have overtaken first-home buyers as the most active sector as applications for the First Home Owner Grant wind down.

"People who were serious about getting the grant made sure they bought well ahead of June 30, when it was originally scheduled to expire," Lisa Montgomery, of Resi Home Loans, says.

"Now it's investors dominating business. Many of them are disillusioned with the stock market and trust only property to provide stable returns."

But although property is, and always has been, a solid long-term investment, potential landlords are being warned not to rush in expecting to make a quick buck.

Property prices in many areas have fallen from their 2006 peak.

"This is no time to be buying property with a short-term outlook," says Mark Bouris, head of financial planning firm Yellow Brick Road.

"You should buy property only if you can afford to take a minimum five-year view.

"You should be thinking in terms of 10 to 15 years if possible, so you can ride out any market fluctuations."

Here we run through some of the key considerations for anyone thinking about investing in property.

More: http://www.news.com.au/business/money/story/0,28323,25800195-5013951,00.html

Looks like the only dark cloud on the horizon for property at the moment is the prospect of rising interest rates. However, personally, I can't see that happening any time soon.

I don't think we're going to see a lot of huge increases in price across the board but hopefully demand will continue to outstrip supply and prices will remain firm.

[chrisrich]

I have seen a slight resurgence in the Canadian housing market over the last few weeks. Hopefully this is a sign that things are looking up in the global market.

[kennas]

I was expecting later in the year to be a capitulation of sorts once the enemployment rate reasched a critical point and that flowed through to the rest of the economy. It's probably not completely off the table, but the follow on from unemployment could be the next serious correction in both the stock market and the housing market. That is of course, if unemployment keeps rising....

[kincella]

here is another angle to consider.....
I bet some of you can relate to this.....people so frightened that if they sell the old home to upgrade, they will not find their next home, so they are holding the old home (due to good returns from the low rates) and just buying the next home...so at least they are guaranteed to have a home....so in fact are increasing their property holdings....thats my strategy as well.....interesting

extract................
In Melbourne, buyer advocate JPP says in its newsletter that as interest rates remain on a par with rental returns many people are simply buying their next home and not selling their existing one. We are about to see a fundamental change in property ownership during the next generation, it says, with people who have property increasing their holdings and those who have never had the opportunity to get into the market.

The supply of housing has been a long-term issue in Australia, but Stevens's comments highlight just how crucial it will be in a new, more frugal economy.

http://www.theaustralian.news.com.au/business/story/0,28124,25862876-25658,00.html

[jayguy]

There seems to be new rush in UK commercial property, several property funds have been set up specifically to target genuine below market value stuff. In The Telegraph news paper it ran an article on some wealthy global investors have their sights on some of the big players, because of how much property prices have fallen and the weak pound.

I think good news at this stage should be taken with a pinch of salt.