Posted on Tuesday, June 11 2013 at 4:05 PM
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 per cent 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 homebuyers are still reluctant to buy homes, preferring to rent instead. Fortunately second and subsequent homebuyers are active in buying and building homes together with investors.”
The number of new owner-occupier housing loans rose by 0.8 per cent in April, after a 4.8 per cent lift in March – the strongest gain in four years. The proportion of first homebuyers in the market rose from a near nine-year low of 14.2 per cent in March to 14.3 per cent in April. Fixed rate loans rose from 18.4 per cent of all loans to 20.6 per cent in April – also the highest level in five years. The average home loan across Australia stood at $301,800 in April, up 2.6 per cent 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 homebuyers that are embracing the opportunities; rather they’re relying on investors to get the new houses and apartments built.”