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Oz Property Investors Put Off By Large Number Of Grant-aided First Time Buyers

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Oz property investors put off by large number of grant-aided first time buyers

The Australian government's grant scheme for first time buyers has been so successful that property investors are delaying purchases until they leave the market, it is claimed.

Three out of four real estate investors who are planning to buy in the next two years told a survey that they are waiting until the first home owners scheme expires in December.

Some 76% of respondents to the 2009 Property Investors Survey from broker Mortgage Choice believed that competition from first time buyers has been so intense that they are putting their own plans on hold.

But they are putting their finances in place ready to buy when the market becomes less crowded. But experts warn that when they do start buying they will find the buy to let market has changed considerably.

'Competition from first home buyers has been so intense since late last year that most investors seem to have stepped back. A large number are getting their finances in order all in preparation for hitting the ground running to purchase in 2010 and 2011,' explained corporate affairs manager, Kristy Sheppard.

Large numbers of first home buyers have bought homes since the Government introduced the grants last year, creating what many fear is a price bubble. Before the grant was extended past its original June 30 deadline, only 23% of investors said they were delaying their purchase until the end of the grant.

Most investors want to buy a house (68%) while 29% will be looking for a unit. In a vote of confidence for the industry, 75% of respondents said it was better to invest in property than shares.

Most respondents said they wanted to buy an investment property for financial security, while 70% were attracted by the tax advantages of investing in property

Michael Matusik, a property investment commentator said they during the past five years landlords have had to do little to generate strong rental growth. But now renters are leaving to buy their first home and in some areas vacancy rates have almost doubled this year.

Others point out that prospective investors, whatever their age or experience, must realise that the days of double-digit rental growth are over. While vacancy rates are still tight, they are easing in many areas across the country.

However they believe that supply is still tight enough that rents won't fall in nominal or even real terms. But tenants will have greater choice and be more price sensitive.

Isn't this just like what happened here with the right to buy fiasco?

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I'm not an investor but I am a FTB in Australia and I'm delaying my purchase until all this madness calms down. I'm currently competing with people with no savings. Makes much better sense to wait them out the market until Jan / 10.

Hopefully increasing interest rates and unemployment will add to the juicy mix of an almost level playing field.

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