Figures recently released by Australia’s largest mortgage broking group AFG (Australian Financial Group); show that 34 per cent of all home purchases are accounted for by investors. This is the largest share of housing loans since at least 1994.
There are broadly speaking two types of investors according to AFG’s state manager of Victoria and Tasmania Carl Taylor. Those buying a second or third home once they have their mortgage under control and those still living with their parents, who buy so they can get a foot into the market.
The second type of investor has determined that it’s better to get into the market, all be it with the help of their parents now, as they might otherwise be priced out with the prices continually rising and ensure that property ownership will not slip out of their reach.
Mark Hewitt, AFG’s general manager sales and operations says, “Investors are now the driving force of the market, encouraged by rising property prices in recent months, and the long term view that a housing shortfall will continue to underpin future price growth as well as rental yields.”
Robert Larocca, REIV research manager says the strong active investor numbers in the market is pleasing.
“After all, the sizable majority of the city’s rental homes are supplied by private investors,” he says.
Mr. Larocca goes on further to say that stimulating greater investment and construction of homes for the purpose of renting and meeting the demand from investors in the affordable segments of the market is a central challenge.