Australia's speculative investors are beginning to flee the secondary investment market following last week's blimp in interest rates.
According to agents, a rash of inner city apartments have been listed for sale during the past week as fears of further interest rates are the horizon.
“Some investors just want out, and they want out now at any price,” one prominent Sydney city agent told propertyreview.com.au yesterday.
“Many of these investors bought on the speculative notion that they would make big money on inner city apartments. Now they are facing loses of tens of thousands of dollars,” he said.
“Some have not even been able to find tenants for their investment properties so they have been carrying the mortgage out of their own pockets, they are the ones who are really hurting and panicked by last week’s rise in interest rates, they know more is to come and they a scared of going bust,” he said.
Across Australia agents have confirmed to propertyreview.com.au secondary inner city investments are hitting the market in record levels.
“When you can’t find a tenant, have a scenario of rising interest rates, and are facing a growing mortgage, speculative investors have only one option and that is to sell at a loss.”
Many agents are predicting price cuts of up to 30% on original prices of some apartments.
Melbourne agents confirm the scenario for “spec” investors is worse than in Sydney due to the amount of secondary product on the market.
Meanwhile, developers of upmarket apartments in prized locations are reporting an increase in owner occupier interest in the past week.
“Most owner occupiers are cashed up and aren’t impact by interest rates,” Australand’s Rob Pradolin said this week.
