Lured by rising rents and strong price growth, property investors are back in the market in a big way, taking over the running from first home buyers, who have been forced to the sidelines.

Figures show that investors now account for almost one in three housing market deals. They are also steadily increasing their borrowings, despite rising interest rates, while first-time buyers have retreated.

According to a recent report “Housing investors take up the slack”*, the investor segment is expected to keep growing as rents and house prices rise in the face of a housing shortage.

“Investors are much less sensitive to interest rate rises, partly because they are more likely to fix their interest payments to provide more certainty for their budgeting, but also because they can offset some of their costs through negative gearing,” according to national research director at RP Data, Tim Lawless.

“With rental rates likely to increase over the coming year, it is likely we will start to see yield improvements across the broader market, which will provide a further yield-based incentive to property investors.”

Have you thought about joining the investors who see such opportunity in the investment property market?

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Source: *Housing investors take up slack”, The Sydney Morning Herald, Wednesday April 21, 2010