Investors re-join the Australian Property-Real Estate market to secure deals

Investors re-join the Australian Property-Real Estate market to secure deals as low interest rates and attractive yields are likely to spur pent-up demand for commercial and residential property-real estate from private investors this year.

Many buyers who have been watching the property-real estate market are now attracted by better returns following the fall and stabilisation of interest rates.

A spate of recent holiday-period sales were evidence of that in December, the Reserve Bank of Australia cut the cash rate by 25 basis points to 3 per cent, the lowest level since it started setting rates in 1990 and in February put rates on hold.

'With cash rates coming down to all-time lows, people are not prepared to sit on cash for too much longer with the yield compression sharpening by 0.7 to 1 percentage point.

Private investors and small boutique syndicates were proving the most active with the metropolitan office market well placed for a strong year, particularly in the $10 million-plus price range.

Last year, about $400 million worth of metropolitan office property sold in 21 transactions and in 2011 there were just 17 metro office sales above $5 million, totalling $140 million.

The majority of buyers were private investors, with some activity from syndicates and owner-occupiers, and noticeable emerging interest from superannuation funds.  There is definitely more private investors and superannuation funds keen to take advantage of low interest rates and the attractive yields.