Investor demand in Victoria is expected to slow over the next few months due to COVID-19 shocks to rental properties. However, current conditions in a real estate segment are likely to remain favorable to potential investors, according to RPM Real Estate Group quarterly review.
Land is going to be a good investment vehicle for investors who plan to have a share of the state's real estate market, said Lynn Nie, division manager at RPM.
"Lending rates are at historically low levels and investors in this space won't need a tenant for about 12 months as the land is colonized and built," he said. she says.
Investing in land, as Nie says, is a long-term investment strategy, especially given the current situation in the rental market.
"By the time the investment property is ready to be let, international travel should return to normal, or at least to the 'new normal'," she said.
The onset of the COVID-19 outbreak in March has already reduced investors' share of overall lot sales. In fact, lot sales to investors were only 23% of the overall stake in the March quarter and 15% in the June quarter.
While the time is always right for investors to buy land, they will likely face competition from homeowners who intend to take advantage of the HomeBuilder program.
"Nonetheless, for investors who will buy in the next few months, this will likely be a great investment in the medium term given the current low lending rates which are expected to stay for years and the large number of lots available on the market. "Nie said.
In contrast, the outlook remains bleak for the rental market, which has been hit harder than the buyer's market in the midst of the pandemic.
Nie said tenants in the state were generally younger and more exposed to areas affected by foreclosure restrictions. Converting short-term housing to long-term rentals has also helped ease the market.
"Rentals in the Inner Ring will be the hardest hit for the remainder of 2020, affected by the shift from short-term accommodations to the permanent rental pool and by significantly lower migration and number of rentals. 39; international students, ”she said.
Nie believes this period of uncertainty will influence how investor demand affects prices and construction activity over the next several years.
"However, for investors looking to gain a foothold in the market, it is worth looking at macroeconomic factors and considering a long-term view of high migration. abroad, "she said.
Top suburbs:
revesby hts
,
artarmon
,
spearwood
,
coolbellup
,
miller
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in real estate, it is important to ensure that you not only have the lowest available rate possible, but also have the right loan features for your needs. needs.
You only need to fill in a few details below and we will then arrange for a local mortgage broker to contact you and determine what features or types of loans are suitable for your needs. We'll even help you with the paperwork. In addition, an appointment is free.
We value your privacy and take all your information seriously – you can check
our privacy policy here
