For many investors, the volatility of the share market—with lingering global worries over sinking oil prices and an economic slowdown in China—means returning to property investment is a safe option. Real estate network LJ Hooker predicts Australia will see the return of housing investor activity in 2016, the consquence of the very weak opening the Australian share market has experienced this month. 

According to LJ Hooker National Research Manager Mathew Tiller, the recent share market turmoil will provide an upside for residential real estate demand.

"The current share market instability will have a lot of investor’s looking for a safer and less volatile investment and real estate markets will benefit from this," said Tiller. He believes the downward movement in the share market will cause investors to re-enter the property market.

"Over the last quarter data has shown that investors have been moving away from real estate, due to higher interest rates thanks to additional lending regulations from APRA," said Tiller. "However investors will begin to reconsider property, as they will see real estate as the lower risk and higher return option."

The return of investors will spur slowing property markets on. "While this won’t lead to the strong levels of capital growth seen in 2015, it will see prices reach the upper end of forecasts," said Tiller.