During the final quarter of 2017, we saw buyer enquiry and open house numbers for typical investment inventory in the price bracket up to $1.5 million in Sydney’s eastern suburbs soften. The main contributors were the tighter restrictions on interest-only lending introduced by APRA in March last year and more stringent borrowing criteria, particularly for multiple property investors.  

While there has been no upward adjustment by the RBA to the 1.5 per cent cash rate for more than 12 months, this calendar year we have seen the tide starting to turn, with CBA leading the charge by reducing rates on interest-only loans, followed by Westpac and other smaller lenders.

Many of our agents have seen this play out in the field. McGrath Coogee is representing an apartment in Dudley Street, Randwick with a guide of $950,000, which attracted over 30 groups at its open for inspection on Saturday – with approximately 50 per cent of those investors.

In my opinion there is no better time to sell typical investment stock, given the perfect storm of:

• Increased competition among the major banks to capture investor lending. 
• Gross rental yields in Sydney lifting from record lows. According to CoreLogic, gross rental yields in Sydney are now at their highest level since October 2016.
• High net worth individuals being advised by their accountants to purchase investment property due to the compelling negative gearing benefits.
• The growing popularity of purchasing investment property in self-managed super funds as a vehicle of purchase.
•  A fundamental housing shortage in Sydney metropolitan areas, providing a constant flow of tenant demand, particularly for properties close to train lines, schools and universities, hospitals and beaches. 

Sellers should also be encouraged by the re-introduction by the NSW State Government of first home buyer incentives, which has bolstered activity in this demographic. According to the Australian Bureau of Statistics, first home buyers accounted for 18 per cent of home mortgage loans in January, its highest level in five years. Less competition by their main rivals - investors - over the past several months has also supported the increase in first home buyer purchases. And despite the price threshold eligibility missing most of Sydney’s eastern suburbs, a general sentiment of confidence amongst initial home buyers can be felt at open for inspections, with strong sales results being reported across the wider Sydney property market. 

We are also seeing a renewed confidence in the auction method of sale. I believe there has been a shift in how people view auctions, they consider it a process to sell rather than an event on the day. Many view auctions as a hybrid of private treaty and auction, as now more than ever, a sale is often transacted before, during or after. Overall there seems to be a general realisation that now is a good time to transact, whether you are an owner occupier or an investor.

Read more about property investment:

First-home buyers at highest share of market in five years

Investors make way for first-home buyers

Interest-only loans at record lows