Investors are replacing some of the demand lost by 1st Home Buyers as a result of recent interest rate rises, according to the June BIS Shrapnel Residential Property Prospects report.
The report, which looks at the property market over the next three years, warns that a shortage of dwellings will keep upward pressure on rents and erode the affordability for those wanting to get into the property market.
“The strong price growth in the second half of 2009 was a rapid adjustment to housing variable interest rates that were at 40 year lows,” BIS senior project manager Angie Zigomanis said.
Mr. Zigomanis went on further to say that, “even though overseas migration inflows are steadily easing, a deficiency of stock is still in place with dwelling construction below underlying demand.”
“This is expected to put pressure on vacancy rates and result in stronger rental growth later in 2010. The deficiency of dwellings, and improved rental picture, will continue to maintain investor demand and asset prices.”