Investor Home Loans Making A Comeback

Posted on June 26th, 2013 · Posted in News

Investors are coming back to the market place, with loans for housing finance on the rise.

CommSec reports the value of home loans taken out by investors rose by 1.1% in April thanks to rising rents and falling interest rates.  “Tight rental market, state government grants for home builders, a relative lack of new homes being built and low interest rates are attracting investors,” CommSec chief economist Craig James says.  “First home buyers are still reluctant to buy homes, preferring to rent instead. Fortunately second and subsequent home buyers are active in buying and building homes together with investors.”

The number of new owner-occupier housing loans rose by 0.8% in April, after a 4.8% lift in March – the strongest gain in four years. The proportion of first home buyers in the market rose from a near nine-year low of 14.2% in March to 14.3% in April. Fixed rate loans rose from 18.4% of all loans to 20.6% in April – also the highest level in five years. The average home loan across Australia stood at $301,800 in April, up 2.6% on a year ago.

“The housing market is in recovery mode,” James says.  “The good news is that low interest rates and government grants are serving to boost new construction. Interestingly, it’s not the first home buyers that are embracing the opportunities; rather they’re relying on investors to get the new houses and apartments built.”

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