Investors Securing Finance at Strong Rates

Wouldbe-first-home-buyer-finance-commitments-dropped--proportionately-between-January-and-February_157_66463_0_14093314_300First home buyers as a sector of the buying industry dropped slightly between January and February, according to the Australian Bureau of Statistics (ABS) in an April 9 release.

In January, first home buyer commitments represented 13.2 per cent of overall owner-occupied housing finance commitments.

This figured dropped to 12.5 per cent, in real terms, month-on-month to February.

Other buyers edging in

Such a figure could represent the increasing pressures on first home buyers in the property industry, particularly in hot areas such as Sydney.

Despite an exceptionally low cash rate leading to affordable mortgage products, existing property owners appear to have an advantage when it comes to buying, while first home buyers may struggle to come up with a deposit.

The ability to use existing equity and pick areas tipped for growth has led many investors to do well for themselves in the Sydney market.

Commitments for the the construction of dwellings rose by 1.8 per cent month-on-month in trend terms, which could represent an interest in new homes on behalf of homeowners looking to upgrade as well as investors who are snapping up off the plan properties.

Investment housing commitments for fixed loans were strong, gunning above the trend and seasonally adjusted monthly increases for owner-occupied housing, perhaps reflecting the growing relationship Australians have with investing in property.

Industry comment

Housing Industry Association Economist Diwa Hopkins noted that the data overall points to “further strength in residential construction” in an April 9 statement.

“The owner occupier segment of new home lending is showing encouraging signs,” Ms Hopkins explained.

The strong figures for investor lending was also highlighted, with a clear trend for these kind of buyers to secure finance in order to construct new properties for rent or resale, according to Ms Hopkins.

While further growth is needed, it’s clear that investors in Sydney and beyond are in a comfortable position.

Leave a Reply

Your email address will not be published. Required fields are marked *