Attraction Returning for Investors

The housing market is becoming more attractive to investors, after property prices fell and rents rose. With lenders eager to back investors, financial experts are urging buyers to take a traditional long-term approach and to shop around to ensure the strongest net return. “For instance, the difference between standard and variable investment loan interest rates range by up to 178 basis points, which could mean an extra $350 each month, or $126,000 over 30 years,” said Michelle Hutchison from RateCity.
“Australia’s property investment market has certainly improved compared to last year, with property values falling.” Ms Hutchison said the investment home loan market has been relatively flat since 2004, with the total of investment loan commitments sitting at about $7 billion per month. “This is compared with an increase of about $4 billion per month for residential home loan commitments,” Ms Hutchison said. Yields are also improving with increased rents.