Investor activity ramps up as first homebuyers retreat
Article Category: Loans & Lenders
By http://www.yourmortgage.com.au, 12 February 2010
Property investors took advantage of the dwindling number of first homebuyers in the market by lifting their stakes.
During December, investor loans rose by 1.1% (up $68 million) compared to the previous month alone. This follows an increase of 1.2% in November according to the Australian Bureau of Statistics.
"The pickup in investment loans is encouraging," said Craig James, chief economist with CommSec. "Overall investment loans have posted modest gains for the past three months and are now up 17% on a year ago.
The boost in the stock of investment property should gain traction in coming months as credit conditions continue to improve and investors look at property as a more attractive investment vehicle - particularly given the sharp improvement in job security."
"The interest rate hikes are taking out some of the heat from the property market," said James. "Overall the housing sector is likely to cool over the next few months. It is understandable that a period of consolidation is to be expected after what has been a phenomenal run over the last year.
Importantly the sharp surge in construction loans over the past six months will continue have multiplier effects through the economy."
The average home loan across Australia jumped 9.8% to $283,000 compared to a year ago, reflecting the staggering growth recorded over the past 12 months.