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Investors Make A Come Back

Rising rental yields, low interest rates and an improvement in home values are expected to encourage property investment. As the gap between mortgage repayments and rents continues to shrink, the amount investors will have to dip into their own pockets to cover borrowing costs is diminishing.

According to the latest QBE LMI Half Yearly Property Update, compiled by BIS Shrapnel, the differential between rental yields and interest rates is only 2 per cent. Residential rents are continuing to rise strongly, spurred by the low vacancy rate of less than 2 per cent in most capital cities.

The report shows that conditions for investors are at their best since the late 1990s. Stagnant property prices combined with low interest rates has made it significantly more affordable to purchase a property, with overall rents predicted to rise by another 10 per cent this year, according to BIS Shrapnel property analyst, Jason Anderson.

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