Experts are forecasting slight improvements in demand in 2009.

As affordability remains an issue and buyers remain cautious, even with rate cuts many agents are complaining of a lack of properties for sale. A number of agents in our Starr Partners Group have told us that they have had many more buyers than properties in the last few months” John McCormack, Starr Partners CEO noted.

Supply has remained low as expected and is forecast to remain low into 2009. The impact has been continued low vacancy, although some markets have unexpectedly shown increases. Rental increases in some markets have also been ahead of forecast. Vacancy is expected to remain low and rental growth is expected into 2009, but at a slower rate.

Price growth has slowed as forecast by many financial institutions, with some markets falling. However, affordability remains a hindrance to the extent to which values can rise. With rising rents and steady or falling prices, yields have increased. In some markets this is ahead of expectations and has stimulated alert and cashed up investors. Further increases in yields are expected over 2009. With falling interest rates, investors are expected to return in even greater numbers to the market in 2009.