Weekend Gold Coast Bulletin - Property
Buyers look to invest
The prospect of better returns is leading Investors to return to the market on the Gold Coast
RECORD low interest rates are driving investors back into the property market, which experts predict will drive up prices.
Property analyst Michael Matusik said investors were not getting a decent return on their money in the bank, the share market was still volatile and with money cheap to borrow, bricks and mortar was more appealing than ever.
“It is an exciting time if you are a property investor because accessing money is going to be cheaper and there is some assurity from the Reserve Bank of Australia that that is not going to change in the near future,” Mr Matusik said.
The central bank cut the cash rate by 0.15 basis points down to 0.1 percent on Melbourne Cup Day, when RBA governor Philip Lowe said: “Given the outlook, the Board is not expecting to increase the cash rate for at least three years.”
That statement triggered an instant increase in inquiry from investors, according to Surfers Paradise First National Real Estate principal Rob Rollington, after a significant drop in the months since the COVID-19 crisis hit.
“Investors aren’t liking the returns they’re getting from the banks so they’re coming back to real estate for better returns and potential for growth,” he said.
Surfers Paradise is now the suburb most inquired about by investors, according to a recent report by realestate.com.au, and interest has risen from last year.
“Investors are slowly returning, but they are sticking to smaller markets that are far more COVID-proof than others,” said REA chief economist Nerida Conisbee.
“At a suburb level, strong performance on the Gold Coast and Sunshine Coast has become more apparent.”
Units in Southport and Broadbeach ave also had increases in demand, making them more popular with investors since COVID-19.
John Fitzgerald, CEO of property investment company Custodian, believes the drop in interest rates will kickstart the property investment cycle again.
“Many investors have sat on their hands during the COVID-19 pandemic,” he said.
“I think this will be the incentive to bring them back in. People who put their money in the bank are getting nothing for it.
“There is going to be a flight to fixed assets and that will drive up prices. I’m predicting, as a result, the Australian median house price will hit $1m in the next three to five years.”