Investment lending hit new high
As interest rates remain steady, investor lending grew over the September quarter to a huge $11.9 billion nationwide. The latest RP Data Weekly Property Pulse offered some insight into this. RP Data research analyst Cameron Kusher stated that investors accounted for 41.4 per cent of the total housing finance figures over this period - and a huge 50.3 per cent when refinancing figures were removed from the pool.
He went on to say the low interest rate market was pushing investors into residential investment, due to the reduced amount of money needed to buy into the landscape.
"Investors in housing essentially have two options for generating a return from their investment; capital growth or rental return. While combined capital city home values increased by 8.9 per cent over the 12 months to October, total returns have been recorded at a higher 13.3 per cent," said Mr Kusher in a November 13 statement.
Even though growth rates are diminishing, this shouldn't be seen as a bad sign. On the contrary, as these developments begin to mellow out and become more stable, the long term growth of the market will begin to set in - which could offer investors the opportunity to take out a home loan and expand their portfolio in the coming months.
"With such a low interest rate setting, investors are finding little value in keeping their money in the bank. With total returns from residential property of 17.6 per cent and 12.7 per cent in Sydney and Melbourne respectively it is no shock that so many investors have shifted from cash into residential property," said Mr Kusher.
This could present a great financial avenue for buyers to consider in the future, especially with the population continuing to grow in capital cities across the nation. Now could be a good time to get in touch with a finance provider to begin discussing the most suitable mortgage for your needs.
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