Investor demand grows while first home buyers drop out
By Andrea Lavigne | 12 Jan 2010 Reduced competition from first home buyers, high rental yields and capital growth opportunities have resulted in increased demand from property investors.
Housing finance figures from the ABS for November reveal an increase in demand for investment housing fixed loans.
The value of dwelling commitments for investor loans rose 2.1%, while owner occupied commitments fell 2.9%.
Overall, the total value of dwelling commitments decreased by 1.6% from October to November 2009.
Mortgage Choice CEO Michael Russell said it was good to see growth in the investor market despite interest rate rises.
"It is of course disappointing that the value of housing finance for owner occupiers fell. That is something we need to watch very closely in the coming months given the housing market is a major contributor to the health of the economy and to consumer confidence."
He stressed, however, that although the value of commitments for owner occupiers dropped in November 2009, it is still 24.6% up on November 2008 and 5.4% up on two years ago.
"Australia is in a transition period between historically high demand for housing finance from first homebuyers and investors re-entering the market, while upgraders are taking their time and waiting to see where buyer competition, housing prices and interest rates are headed.
"The confidence of this group still needs work but our franchisees have been indicating for a few months now that they are seeing a noticeable increase in interest from upgraders."
