Quality still the name of the game as interest rates bite and investors return, says consumer group.

Another interest rate rise will have savvy property investors reaching for their chequebooks, but it will be the quality stock that will move more easily, says John Moore, President of the Property Investors Association of Australia (PIAA).

“I expect developers will start to offer incentives to clear lingering stock as interest continue to climb,” he says.

“With the expectation that we are at the bottom of the property cycle and with rents increasing, the potential is for capital gain and rental growth. This convergence of factors hasn’t happened for a few years.

Mr Moore says few investors are tapped into the magic combination, but developers need to move now to make the most of the opportunity to sell, cash up and get into the market themselves.

“This is the perfect time for developers to be active in site acquisition. They recognise where we are in the cycle, and they need to cash up to make the most of it.”

“It’s the ideal environment for them to deal by offering incentive on quality stock. The longer it sits on the market, the further the value is eroded. Anything less than quality will not sell readily and they may need to offer further incentives to make it attractive.”

“This offers the perfect platform for investors to return to the market,” he says.

What is the Property Investors Association of Australia (PIAA)?

PIAA is a not-for-profit organisation that provides information and education to property investors to help them make prudent investment decisions. Investors can subscribe to their website (www.piaa.asn.au) to receive regular newsletters and special offers.

PIAA recently introduced the ‘PIAA 5 Star Rating System’. It is a comprehensive due diligence process designed to help investors assess a potential property investment.

Developers with Rated Developments can display their trademarked PIAA 5 Star Rating Logo for investors to immediately appreciate their commitment to transparency, good industry practice and support of wise investment decisions. Developments are rated based on the quality of information provided – not on their future potential. The information is assessed using a proprietary PIAA formula. This formula scores the range of information and weights it according to its significance in providing information to investors about the rated property. Assessment Criteria The Assessment criteria includes: · All formal documentation submitted to Councils and Statutory Authorities · Profiles of the developer, builder and architect. · Marketing materials · Valuations from PIAA approved valuers · Environmentally sustainable design features · Discounts for PIAA subscribers, and, · Length of relationship with PIAA.

The resulting rating is reviewed by PIAA management before being posted on the PIAA website (www.piaa.asn.au) and published in the PIAA newsletter. PIAA expects this system to become widely appreciated and favoured by investors. Consequently they have protected the Five Star Rating Logos with Trade Marks. This provides PIAA with the legal control should it be necessary to move against an unscrupulous developer. PIAA charges a fee to the developer for the assessment process. If the development is found to have a low rating, PIAA will work with the developer to improve their rating. At this stage, no development can achieve 5 stars immediately. One of the criteria is that the developer must be known to PIAA for more than 5 years.