TUMBLING interest rates have opened the doors for investors

Industry advisers say the combination of falling interest rates and rising rents have presented a once-in-a-generation opportunity to invest in the property market. Mortgage rates have fallen from an average of about 9.25 per cent to 6.9 per cent, and some financial experts predict official interest rates will fall to 3.25 per cent by the middle of 2009.

At the same time, the recent fall in property prices in major cities has seen rental yields as high as 4-5 per cent on well-located properties.

While many property investors are tempted to sit back and wait till the market bottoms out next year, some property experts say the time to buy is now.

The Real Estate Institute of Victoria also advises it is a good time to invest.

REIV president Adrian Jones said that for the past two years rental vacancies had been hard to find in Melbourne, a sure sign that investors could achieve a decent return.

It is also a buyer’s market, making it easier to find and afford an investment home.

“The cost of borrowing has fallen substantially but returns on investment, the rental paid by tenants, has not,” Mr Jones said.

Finally, Melbourne has a growing population, which will translate into growing demand for housing.

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Paul Castran