Smart Investors Now Searching for Capital Gains

Clued in investors are now demanding more than just strong rental returns from their purchases.

The seemingly unbeatable sub $400,000 market is now the target amongst smart investors, who are now preferring to invest in the $500,000-$900,000 middle market. This signals a real shift indicating market recovery.

Ray White Maroochydore Principal Dan Sowden commented, “Over the last 30 days, 47% of the sales our office completed were for properties priced over $400,000.”

This is a noticeable change from the prior 2-3 year long trend, where 80-90% of sales were sub-$400,000. This figure is now evening closer to 50%, as the middle and higher end markets gain momentum.

Mr Sowden continued, “We believe the long term view amongst investors buying into the undervalued middle market is the future prospect of Capital Gain; believed to be more substantial than what will be seen in the sub $400,000 market.”

“Homes are now selling in record time in most beach and riverside precincts as buyers return to ‘old favourite’ stable suburbs that have stood the test of time” said Mr Sowden.

As interest rates are expected to fall, this shift in investor mentality, away from cash flow based investments to capital gain based, is inline with the general economy as investors appetite for risk and potential capital gain builds.