No signs of panic

Thursday 19 October 2017

The housing market might be cooling rapidly but ANZ economists say investors appear to be taking the adjustment in their stride.

ANZ’s latest Property Focus report is out and it finds that while the mood of the market has changed, it has been a very orderly adjustment.

The bank’s chief economist, Cameron Bagrie, said there were certainly no signs of panic amongst the surveyed property investors within this year’s ANZ-Property Investor Federation survey.

It reveals that almost 70% of investors plan to buy again at some point, which is the same proportion as last year - although the urgency has declined and fewer are planning to buy in the next six months.

Bagrie said the continued enthusiasm for property as an investment is not surprising as investors have done well out of housing and it is clear they are not going to abandon it lightly.

Most investors are planning to hold their properties for the long term, he said.

“Even if they have pretty modest expectations of price growth in the near term, many of them will have assessed residential property investment to be a solid prospect over time.”

Evolving investor expectations reflect a growing awareness that the world is changing, according to Bagrie.

It is late in the economic cycle, and while a second wind can never be ruled out, the boom in residential property prices appears to be ending, he said.

“Most survey respondents are in a strong position as they consider their strategies in this environment.

“They are sitting on solid capital gains, and most are in a pretty good equity position to ride out any short-term challenges.”

But we are now entering an era where cash flow is king, Bagrie added.

“A focus on consolidation and cash flow might help to ensure that unexpected developments do not result in a need to sell during a significant downturn in the market.”

Read more:

Investors remain confident in property 

Don’t assume prices will keep rising – ANZ 

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