Investor activity set to rise

LJ Hooker’s national research manager, Matthew Tiller, said the recent share market turmoil will increase the appeal of residential property as a viable investment.

“The current share market instability will have a lot of investors looking for a safer and less volatile investment, and real estate markets will benefit from this,” he said.

“Over the last quarter, data has shown that investors have been moving away from real estate due to higher interest rates, thanks to additional lending regulations from APRA.

“However, investors will begin to reconsider property, as they will see real estate as the lower-risk and higher-return option.”

Mr Tiller said the return of investors would provide a boost to slowing property markets.

“While this won’t lead to the strong levels of capital growth seen in 2015, it will see prices reach the upper end of forecasts,” he said.

The latest AFG Mortgage Index revealed that investor demand for home loans fell from 40 per cent of total loans processed early in the 2015 calendar year to 31 per cent in the December 2015 quarter.

[Related: More bad news for property investors]