LAST week’s sharemarket crisis will spark a rush of local investment in the Australian real estate sector as people seek stability in bricks and mortar, experts say.
Christopher Joye, founder and managing director of research and investment group Rismark International, said property would be the third most popular investment after cash and bank deposits.
“We know that during large equity market corrections, residential property has proved to be a relatively resilient investment class, and that was the case during 1987, during the 1981 recession, during the 2001 tech-wreck and again during the 2007-08 GFC,” Mr Joye said.
“The Australian sharemarket fell 50 per cent in 2007-08, but Australian house prices only fell by 3.8 per cent, so as a store of wealth it has certainly proved to be a safer place to be.
“There is also that visceral attraction to something as tangible as bricks and mortar, that also doesn’t seem to be buffeted by global market ructions in the same way as far less tangible shares are.”
Real Estate Institute of Australia president Pamela Bennett said it was still a buyers’ market, with good stock to choose from.
Moody’s senior economist Matt Robinson was nervous about how last week’s market tumble would affect the auction of his four-bedroom terrace house in Surry Hills, in Sydney’s inner-city, on Saturday.
So he was “extremely happy” when the Bourke Street property, which he bought for $1.7 million in 2009, went under the hammer for $2.01m, making it the most expensive property to be sold at auction in Sydney over the weekend.
“It was difficult circumstances with all the market ructions that occurred in the latter part of last week, so I guess we were lucky we had a good product,” Mr Robinson said.
Across Sydney, auction clearance rates remained firm at 56.2 per cent over the weekend, up from 53 per cent on the previous week’s figures, according to Australian Property Monitors.
Melbourne’s clearance rate also rose slightly, from 57.2 per cent last week to 58.1 per cent over the weekend.
Agent for the Bourke Street property, David Servi from First National Real Estate Spencer and Servi, said inner-city housing was a strong and reliable long-term investment.
“Property in the inner city is in a fairly safe position because people want and need housing close to the city and there is a shortage of it,” Mr Servi said.
Source : Jodie Minus, The Australian Newspaper. 8 August 2011