Their white paper, entitled Investors on the Rise: a Broker Roadmap for Growth, offers brokers advice into the underlying trends in the market, with NAB providing the lender-side advice to accompany the data and insights work provided by CoreLogic.
The industry data giant forecasted the investor market as one of the strongest segments in 2022, with affordability biting into the first home buyer segment and rents set to rise.
“Overall, capital growth expectations for 2022 are a lot softer,” said Eliza Owen, head of Australian research at CoreLogic. “That’s off the back of some of the driving forces for the housing market losing their potency.”
“With the higher numbers of advertising stock come on the market, we’re seeing the potential for interest rate rises over the next number of years and affordability constraints are creating a loss of momentum in growth, particularly in the detached house segment.
“What that means is that there might still be opportunities to seek markets that will outperform in 2022 – for example, we’re expecting a bit of a pivot to the unit segment in some markets – but overall, the capital growth expectations are a lot lower.
“We’re also seeing a fairly swift uplift in rents over the year, but because of the outperformance in capital growth, rental yields are generally compressed. The continual low interest rate environment has meant that the spread between yields and interest rates is still fairly wide.
“Investor opportunities are quite strong across markets like Western Australia, which has led rental growth over the year. Apartments, again, we think could see greater levels of demand due to affordability constraints in the detached house segment.
“There are certainly pockets of opportunity, but given that we are coming into a softer growth environment with less urgency and more listings, that will give investors a bit of opportunity to take their time a bit more.
“There will be that greater chance for potential buyers in 2022 due to higher listings volumes and less urgency.”
