Search Property For Sale

Concern for bonded landlords

Google+ Pinterest LinkedIn Tumblr +

The economic contraction will drastically lower disposable income for buyers and tenants, which places pressure on bonded landlords, says HouseMe chief executive Ben Shaw.

“Theoretically, we would see capital flow out of leveraged assets into more liquid instruments and, in order to mitigate this to some degree, the repo rate reductions are a proactive measure to assist landlords in meeting their loan obligations, the majority of who are bonded.”

“For those who are no longer able to afford their bonds, or for those for who liquidity is more important than their property investment, we expect to see an increase in properties available for sale.”

While well-capitalised buyers will find great opportunities to acquire assets at discounts, Shaw says they will probably be wary of even these pricing levels as the bottom of the economic curve has not yet been reached.

“Sellers may drop prices further to entice transactions, which will result in lower property valuations, which in turn has a knock-on effect on rental prices.”

*Subscribe to our Property360 weekly newsletter


About Author