Terrigal apartments are set to boom fuelled by a shortage of new apartments, industry experts say.

Preliminary figures from Australian Property Monitors for the September quarter reveal Terrigal has recorded its first positive increase in apartment values since before the onset of the Global Economic Crisis.

In his summer property market review John McGrath CEO of McGrath Estate Agents singled out the Central Coast suburb as one of the top spots for price growth over the coming months.

“We’re seeing strong anecdotal evidence of the return of investors, which is usually a strong catalyst for healthy price growth,” McGrath says.

“The population in NSW is growing rapidly, in some areas as high as three per cent in the last 12 months and there has been very little building activity to speak of to keep pace with the rapidly growing population.”

“This situation takes time to re-balance as the developer market becomes active again so I anticipate the current housing shortage will be in place for at least a further 24 months.”

“Market confidence is extremely high across almost all price brackets and record population growth will continue to push residential property prices higher especially in sought after beachside locations.”

Local real estate agent Jaimie Woodcock of McGrath Estate Agents says the number of investors buying at Terrigal has doubled in the last three months.

“Investors are back, rents are up, interest rates are low – it’s a really unique time in the market,” he says.

“People now realise that prices have bottomed and are on the way back up, confidence is returning to the market and the sales reflect this.

“There has been a real shift in the apartment market from three years ago when we had a lot of developers finish various projects at the same time and we struggled to sell them – now there’s not enough of them to keep up with the demand.”

According to industry analyst and economic forecaster BIS Shrapnel’s Home Buyer Monitor survey, 30 per cent of all households looking to purchase a dwelling were investors.

BIS Shrapnel Senior economist Jason Anderson says a surge in rents has enticed investors to return to the market.

“With the very low rate of medium and high-density dwelling construction in 2009, it is inevitable that rental markets will tighten considerably in 2010, and remain very tight in 2011,” he says.