The recent interest rate drop has created a unique environment for Residential Property Investors.

The average investor paying interest only will save $48 per week in interest payments. This coupled with the fact that residential rents are increasing at alarming rates, results in a a property investor is outlaying considerably less to invest in property.

According to Roy Sanderson, Accountant and Property Advisor, the “benefits of property investment have just increased substantially”. Over recent years residential rents have increased due to increased interest rates and now that rates are dropping, it is unlikely that rents will drop.

Population growth in Victoria is surpassing the supply of new residential property. Based on simple supply and demand economic principals, we don’t have enough housing to cope with the population growth. The result must be that rents and property prices will continue to rise.

In the 3 months to June 2008, property prices in Melbourne increased by 4.9% compared to the next best Capital in Australia which was Darwin at 0.9%.

Melbourne continues to be the “hot spot” for property investors in Australia. Predictions by Roy Sanderson indicate that property in Melbourne will continue to increase in value by more than 15% over the next 12 months based on interest rate reductions, rentals continuing to rise, population growth at record levels, rental vacancy rates at the lowest levels in recorded history and new housing commencements reducing.

There is also an expectation that the volatility of the stock market will result in investment money flowing to the property investment market which is considered to be a more stable long term investment.

Investors will look back on 2008/2009 and history will show that the Property investor has made some extraordinary gains.

For more information about R J Sanderson & Associates visit www.rjsanderson.com.au.