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A good year ahead for property investors

2011 should be a strong year for the property market new research has found.

First National Real Estate polled its 450 agents and found that the vast majority expect 2011 to be a turn-around year for property, particularly as investor and first home buying activity return to more normal levels.

I think the they might be a little off with the first home buyer comment as they have failed to take into consideration the tough lending rules imposed to home loan borrowers. While first home buyers might be keen to purchase property the reality is most of them will not have enough deposit to make it happen.

According to the results, some markets may still be flat but growth will occur over the next 12 months, although at more moderate rates than in 2009 and early 2010.

In general, I would expect the market to gather more strength in metropolitan markets in the first half of the year, with improved confidence spilling over into regional markets in the second half.

While growth rates will not be as spectacular as they have been in previous years, property is still offering substantial returns and will lure investors back in larger numbers.

Throughout 2011, the property market will continue to be supported by strong economic fundamentals such as strong population growth, low levels of unemployment and buoyant consumer and business confidence.

Investors could be snapping up some bargins due to forced sales and will be dependent on how large interest rate increases are.  If rate increases are kept to a minimum, or even remain stable, this will allow people the breathing space they need to adjust and so may avoid forced sales.