Home loan market sees increase in property investor commitments

By the resi financial blog team, 29 October 2013

Investors own the most property

Investors have become the majority share of the home loan market, according to a recent research by Rate City.

Financial commitments by property investors represented 45 per cent of all new home loan settlements in July, which has beaten out property upgraders (44 per cent) and first home buyers (11 per cent).

Alex Parsons, chief executive officer for Rate City, said the investor share of the market has been increasing, with the changes to self-managed superannuation funds contributing to the growth.

"Investors have been ramping up their presence in the market for some time, and now account for the biggest proportion of all new home loan dollars settled, making it harder for first home buyers to get a foot on the property ladder," said Mr Parsons in a September 20 statement.

First home buyer representation in the market has dropped below the 20 year average of 15 per cent, which is currently at its lowest level since 2004.

"At one point in 2009, when government incentives for first home buyers were high, first home buyers and investors were shoulder to shoulder, each accounting for about a third of the home loan dollars financed," said Mr Parsons.

The historically low cash rate and the follow on effects onto interest rates have been highlighted as playing a part in the change, as well as increased demand for property across the nation.

First home buyers have been advised to organise their deposits as soon as possible and be ready to secure any property they fall in love with as soon as possible.

However, regardless of your property intentions and goals, organising your home loan options in advance and securing a fantastic interest rate for your mortgage is always the best way to aid your real estate search.

Categories: Home Loans, Personal Finance, Property Investment