As distressed sellers start offloading assets the nation’s private property buyers who cashed up during boom times are jumping back into the property market to snap up bargain buys.
Savvy private property buyers accounted for 30% of all commercial property acquistions in the 12 months prior to the end of the third quarter 2008 and more than half of Australia’s retail property sales in 2008, as asset values softened by up to 20 per cent.
The depreciation of the Australian dollar, softer capital values and declining interest rates will see an increasing return of the private property buyers and offshore property buyers in 2009.
Simon Hemphill from Johns Lang LaSalle noted, ‘although it’s different for each market in each state, what we have found is that private property buyers and developers who have been frozen out of the market for years by the big corporates are now well placed to move in and snap up some bargains. The bigger boys are struggling with equity whereas private investors have equity burning in their pockets.’
Residential property developer Harry Triguboff thinks the market has already bottomed and noted, ‘I believe prices are already going up’. Most other players foresee that the fallout from the global financial crisis looks set to keep the property market flat well into beginning of 2009.
Prosper Group is a leading buyers agent in Australia.
