Market/Finance News: Investment figures boom

By the resi financial blog team, 22 May 2014

Investment figures boom

If you're wondering whether to invest in property in Australia, you're not alone. Regardless of whether you're seeking a fixed or variable home loan, now is certainly a good time to buy thanks to the low interest rates on offer.

In 2010, just under one million individuals had an investment property loan, but this number increased to 1.31 million by March 2014, according to a May 19 release from Roy Morgan Research. 

The research firm has recently completed its Consumer Single Source survey, consulting with around 50,000 people. Its findings show that property investment remains a favourite activity of Australians.

Growth in particular age groups

The number of loans for investment properties has increased by 37 per cent over the past four years, according to Roy Morgan Research. 

The company noted the 35 to 64 age group was the single largest driver of this growth. This group accounted for an impressive 78 per cent of the increase.

However, that's not to say that people shouldn't invest at other times in their life. For instance, investing in property earlier allows for a longer period to see potential capital gains. Meanwhile, if you invest when you're older, you may have more time available to keep up with the necessary maintenance.

Of those aged 35 to 49, 11.3 per cent have an investment loan. For 50- to 64-year-olds, the figure rises slightly to 11.9 per cent.

"Going forward, government policy and the economic climate will play a major role in whether people choose to invest in the property market or take out a home loan," noted Norman Morris, industry communications director for Roy Morgan Research.

"Older Australians will face the prospect of cuts to pensions, and with the proposal for the pension age being increased to 70, this could impact the investment property market."

Earlier this month, Reserve Bank of Australia Governor Glenn Stevens stated that a "period of stability in interest rates" is anticipated, which is great news for those wanting to borrow in order to invest.

Categories: Property Investment